Resumo

The importance of exploring how this context shapes corporate social and environmental practices has increased in recent years, with closer attention to the national configurations of developing countries, which can lead to different expressions of such behaviors. Among the factors that explain the differences in companies’ behavior in developing countries concerning environmental and social practices, high ownership concentration and the relevance of family wealth as a source of capital can play central roles.

Much of the empirical evidence that guides the discussion of the relationship between ownership structure and CSR practices concentrates on developed markets. However, more recent research in emerging markets has yielded conflicting, indicating the importance of the context in which the company operates to establish the relationship among these constructs. Investigating the Brazilian context using different proxies for CSR engagement can lead to new empirical evidence that further clarifies the relationship between ownership structure and CSR practices, thus justifying this research.

Financial markets in developing countries tend to be underdeveloped, and companies depend on the domestic capital market, which is often based on accumulated family wealth. Also, investor protection mechanisms are inefficient, encouraging ownership concentration. Such features are therefore considered essential variables to explain different strategies for creating and distributing value through CSR practices. In this context, Socioemotional Wealth (SEW) explains that the choices made by corporate managers are influenced by the will to preserve the company's legacy.

We assembled a sample of 100 Brazilian companies from 2010 to 2020, summing up to 650 firm-year observations. We used three proxies of environmental CSR engagement practices based on the CSRHub database as dependent variables. As independent variables, we collected data from Reference Form fillings, to compute family presence on Top Management Team, and as controlling shareholders, and also the percentage of common shares held by controlling shareholders. We ran several random effects panel regression models to explore these relationships.

Unlike what was expected, there was a negative and significant influence of the presence of family members on the three forms of environmental engagement practices used in this study. This result can be seen as evidence of what Kellermanns et al. (2012) argue when they state that SEW can negatively influence the company's proactive engagement with other stakeholders. According to the authors, in some cases, SEW can lead to selfish behavior by family members who put their needs above those of others.

SEW in the Brazilian context can lead to selfish behavior by family members who put their needs above those of others. The act of appointing relatives to the board of directors and the executive board reveals behavior that can violate the rules of good governance and deprive non-family stakeholders. Large family firms may seek to limit weak social performance along dimensions relevant to (and visible to) a broader range of stakeholders. This may reflect their concern with community and employees’ dimensions of CSR, diminishing their environmental concerns.

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