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How Does Corporate Governance Deviance Impact Sustainability in Family Firms? A Stakeholder Perspective

Author

Listed:
  • Irfan Saleem

    (Sohar University Oman
    Wittenborg University of Applied Sciences)

  • Muhammad Naeem

    (Modern College of Business and Science)

  • Muhammad Haseeb

    (Middle East College)

  • Hao Ji

    (Northwest A&F University)

  • Said Fazari

    (Sohar University Oman)

Abstract

The first two decades of this century have witnessed a burst of legislation, court cases, and shareholder reform movements for multinational corporations. However, family firms usually deviate while practicing governance and sustainability-related business practices. This study aimed to shed light on why family firms adopt a deviant corporate governance attitude. By looking at the governance score of the family firms, we implement the Generalized Method of Moment (GMM) approach to find the relationship between the family firms’ corporate governance deviance index score. The findings demonstrate how deviance in corporate governance and deviance in family firms could influence sustainability performance. Our research supports the view that even in the presence of market- or country-based corporate governance laws and rules, the family firm usually develops governance practices that better balance its sustainability and profitability objectives. The study has implications for board members of family firms and theoretical implications for family business literature.

Suggested Citation

  • Irfan Saleem & Muhammad Naeem & Muhammad Haseeb & Hao Ji & Said Fazari, 2025. "How Does Corporate Governance Deviance Impact Sustainability in Family Firms? A Stakeholder Perspective," Circular Economy and Sustainability, Springer, vol. 5(4), pages 2829-2842, August.
    • Handle: RePEc:spr:circec:v:5:y:2025:i:4:d:10.1007_s43615-025-00538-y
    DOI: 10.1007/s43615-025-00538-y
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