Engagement of family members, corporate governance and social responsibility in family-owned enterprises

Abstract

Purpose: With the increasing awareness and recognition of the importance of corporate governance (CG), its practices and mechanisms along with their effect on performance and general organization’s behavior have become of interest for many scholars. The purpose of this paper is to examine the relationship between CG, with a focus on the board of directors (BOD) and the audit committee, and the level of corporate social responsibility (CSR) practices toward health, refugees, community, and environment. Design/methodology/approach: Data were collected through a questionnaire distributed to 203 employees working at family-owned enterprises (FOE) in Lebanon. SmartPLS 3.0, statistical software for structural equation modeling, was used to analyze data. Findings: The results indicate that the audit committee component of CG has a significant positive impact on CSR dimension practices toward health, refugees, and community and environment. Furthermore, family members’ engagement in the board of directors and decision making plays a moderating role on the relationship between the audit committee and CSR practices toward health, community, and environment, as well as the relationship between the BOD and CSR toward community and environment. Originality/value: The role of family members’ engagement in the effectiveness of CG and CSR practices FOE is studied.