FAMILY VALUE AND CORPORATE TRANSPARENCY: SOCIO-EMOTIONAL WEALTH’S ROLE IN ESG REPORTING

Abstract

As the global emphasis on environmental, social, and governance (ESG) transparency intensifies, the interaction between ESG and the socio-emotional wealth (SEW) of family-controlled firms (FCFs), particularly in developing countries, remains somewhat obscure. This study delves into the dynamics between socio-emotional wealth theory and stakeholder theory to examine how Malaysian FCFs align and incorporate family SEW into their ESG disclosure practices. Utilizing weighted least squares regression to analyze data from 2018 to 2022, the research uncovers that Malaysian FCFs enhance ESG transparency in a manner that aligns with their family’s SEW, primarily facilitated by family chairmen rather than family CEOs. Conversely, the presence of family executive directors was found to inversely affect ESG reporting. This investigation significantly advances the field of family business and ESG studies by shedding light on the subtle yet impactful roles FCFs play in advancing ESG transparency and the complexities of family involvement in ESG reporting.