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: Drawing on stakeholder theory and SEW perspective, we analyse how family orientation moderates and how firms’ ESG performance mediates the relationship between board characteristics (such as board heterogeneity and CEO duality) and market value. Using data from 428 listed firms in India, our preliminary findings indicate that board heterogeneity positively influences and CEO duality negatively influences firms’ ESG performance. Further, these effects are more pronounced in family-oriented firms. While the market separately evaluates firms’ environmental, social, and governance initiatives, investors place greater significance on environmental initiatives. Though family firms can improve their ESG performance by having a diverse board, this does not necessarily translate into higher firm value, due to their socioemotional wealth priorities. Conversely, nonfamily firms with heterogeneous boards and non-dual CEO positions can enhance their ESG performance, thereby boosting market value.
Puri et al. (Wed,) studied this question.