Corporate social responsibility and corporate financial performance: The role of executive directors in family firms

•Family control is expected to influence the relationship between CSR and corporate performance.•Family shareholders may expropriate firm value through CSR initiatives.•The presence of shared leadership can be beneficial for family firms.•Findings suggest that executive directors positively moderate...

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Bibliographic Details
Published inFinance research letters Vol. 50; p. 103195
Main Authors Tenuta, Paolo, Cambrea, Domenico Rocco
Format Journal Article
LanguageEnglish
Published Elsevier Inc 01.12.2022
Subjects
CSR
Executive directors
Family firms
Firm performance
Firm performance
CSR
Executive directors
Family firms
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Summary:•Family control is expected to influence the relationship between CSR and corporate performance.•Family shareholders may expropriate firm value through CSR initiatives.•The presence of shared leadership can be beneficial for family firms.•Findings suggest that executive directors positively moderate the impact of CSR practices on the family firms’ performance. The paper investigates the impact of corporate social responsibility activities on corporate financial performance among Italian companies listed on the FTSE MIB at the Milan Exchange for the period 2013–2019, focusing on the moderating role of family control and executive directors. The empirical results show that corporate social responsibility (CSR) is negatively associated with family firms’ performance, suggesting the prevalence of the expropriation effect. However, the relationship between CSR and corporate financial performance is positively moderated by the presence of multiple executive members on the board of directors of family companies, confirming the benefits of shared leadership on family boards.
ISSN:1544-6123
1544-6131
DOI:10.1016/j.frl.2022.103195