Web-based sustainability reporting by family companies: the role of the richest European families

ABSTRACT

This study compares the sustainability reporting practices of family companies with those of their non-family counterparts and examines whether the former owned by billionaires engage differently with sustainability reporting compared to their counterparts. The empirical analysis is based on 360 companies from 17 European countries. A propensity score matching (PSM) procedure was adopted and we selected 180 family companies and 180 non-family companies. The former group includes 90 owned by European billionaires listed in the Forbes 2019 World Billionaires Ranking and 90 not owned by billionaires. Findings are consistent with the argument that family companies attach greater importance to sustainability reporting. Within the family company arena, findings reveal that greater prominence is attributed to sustainability issues on corporate websites when the family company’s CEO is a family member and the level of family ownership is lower. The results revealed mixed evidence regarding differences between family companies owned by billionaires and their counterparts. The prominence attributed to sustainability issues on corporate websites by family companies owned by European billionaires is greater than that of family companies not owned by billionaires, but only when using a less stringent measure of prominence. These findings emphasise the importance of exploring family companies as a heterogeneous group.

KEYWORDS:

• Sustainability reporting
• family companies
• World Billionaires Ranking

ACCEPTED BY:

• Chris van Staden

Acknowledgements

The authors would like to thank the editors and three anonymous reviewers for their insightful comments and suggestions, which have led to substantial improvements in the paper. The authors would also like to thank João Nascimento and Ana Teresa Marracho for their assistance with data collection. The authors gratefully acknowledge the financial support received form the Fundação para a Ciência e Tecnologia.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 We identified family companies controlled by billionaires in all of the following countries, which were included in the PSM procedure: Belgium, Denmark, Finland, Germany, Greece, Italy, the Netherlands, Norway, Poland, Portugal, Russia, Spain, Sweden, Switzerland, Turkey and the United Kingdom.

2 We identified family companies controlled by billionaires in all industries except Utilities. Therefore, this industry was not included in the analysis.

3 The non-family companies are those for which no individual (or individuals belonging to the same family) possesses at least 25% of the share capital or, owning more than 25%, they are not formally involved in the governance of the company (board member). However, we did not consider companies controlled by the state and those controlled (and consolidated) by other companies.

4 Almost all the companies have their websites available in English. Only 10 of the 360 companies do not provide such a website. For 9 of these 10 companies, the website was available in Spanish, French, or Italian, in which the authors have expertise. For the tenth company, whose website is available in Dutch, we resorted to Google Translate.

5 When the corporate reports were not available, we use information provided by the MarketScreener (www.marketscreener.com).

6 To ensure that the results are not sensitive to outliers, we exclude observations whose absolute value of the standardised residuals is greater than 2 from the sample.

Additional information

Funding

This research received financial support from FCT research projects UID/GES/00315/2019 and UIDB/00315/2020.