CEO Gender and Family Business Performance: The Moderating Role of Socio-Emotional Wealth

Abstract

Family businesses are businesses that are managed and/or owned by a family. Like in any other company, the CEO is the manager and is responsible for achieving good performance. But unlike in non-family businesses, women are more represented in leadership positions and are more likely to work their way up. There is considerable disagreement in the literature about whether female CEOs outperform male CEOs. While some studies confirm this, other studies refute it, and other studies find no connection at all. In this study, we therefore investigate whether female CEOs perform better than male CEOs within family businesses. However, given the target group, it is essential not to ignore the influence of socio-emotional wealth (SEW) on this relationship, since family businesses distinguish themselves from other organizational forms with this characteristic. SEW includes the non-financial aspects of a business, such as a desire to maintain family control and family values that are incorporated into the corporate culture. According to SEW theory, family businesses focus more on maintaining SEW than pursuing purely economic prosperity. This can ensure that not all decisions are made with profit maximization in mind. To empirically test our hypotheses, we use a sample of 238 Belgian family businesses. Our results do not show any statistically significant results for the impact of the CEO’s gender on firm performance. What is significant, though, is the positive moderating effect of SEW on the relationship between CEO gender and performance in family businesses. The more SEW retention within a family business, the better the performance will be in the case of a female CEO.