Board diversity and corporate social performance in family firms. The moderating effect of the institutional and business environment

We analyze the effect of structural and demographic board diversity on family firms' corporate social performance (CSP), taking into account certain institutional and business environment aspects. The sample consists of French, German, Italian, Spanish and Portuguese nonfinancial listed firms over the period 2014-2021. We compare family and nonfamily firms before focusing on family businesses. Findings show that CSP benefits from having female directors in family firms whilst independent directors increase CSP in nonfamily businesses. Family directors exert a negative effect on CSP in family firms. The enforcement of law makes the positive influence of board independence significant for family firms and of nondual CEOs for nonfamily companies. Within family firms, the negative effect of family directors is strengthened by the enforcement of law but lowered by the efficiency of the judicial system. Hostile business environment always lowers CSP and reduces female directors' positive influence for family firms.