Governance Structure and the Credibility Gap: Experimental Evidence on Family Businesses’ Sustainability Reporting
Journal
Journal of Business Ethics
ISSN
0167-4544
ISSN-Digital
1573-0697
Type
journal article
Date Issued
2018-12
Author(s)
Abstract
This paper examines the success of corporate communication in voluntary sustainability reporting. Existing studies have focused on the perspective of the communicators but lack an understanding of the perspective of information recipients to clearly evaluate this interactive communication process. This paper looks at the issue of a credibility gap perceived by external stakeholders when they doubt the authenticity of communicated information due to the reporting company’s governance structure. The paper uses family businesses to exemplify the emergence of such a gap when outsiders become concerned about the potential agency problem of the integrated ownership and management controlled by a few members of the same family. Following source credibility theory, these concerns raise a credibility gap associated with a family firm’s trustworthiness and goodwill, even if the family has the expertise to carry out sustainability reporting. The findings of two experimental studies indicate that family businesses suffer a greater credibility gap than non-family businesses. An external and independent assurance service can mitigate such gaps, especially when the service is comprehensive and targets family businesses. The paper provides a complete view evaluating corporate communication by looking at the interaction between the communicating company and the information recipients.
Language
English
HSG Classification
contribution to scientific community
HSG Profile Area
Global Center for Entrepreneurship + Innovation
Refereed
Yes
Publisher
Springer Science + Business Media B.V
Publisher place
Dordrecht [u.a.]
Volume
153
Number
2
Start page
547
End page
568
Subject(s)
Division(s)
Eprints ID
250948
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open.access
Name
art%3A10.1007%2Fs10551-016-3409-y.pdf
Size
1.28 MB
Format
Adobe PDF
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