Exploring the Impact of Family Governance on Circular Economy Performance: The Moderating Role of Generational Involvement

This study examines the impact of family board involvement on circular economy performance (CEP) and the moderating role of generational involvement. Since the concept of circular economy gains attention as a strategic approach to sustainable development, the role of family businesses (FBs), which dominate the global business landscape, becomes increasingly important. While family governance factors such as long-term orientation and family values encourage sustainable practices, internal conflicts and ownership dynamics can hinder these efforts. Adopting a socio-emotional wealth (SEW) perspective on a sample of listed family firms on Euronext Milan between 2017 and 2020, this study explores the impact of family board involvement on CEP and proposes that such a relationship is contingent upon generational involvement. The results suggest that while family board presence is negatively correlated with CEP, the involvement of multiple generations can mitigate this effect by balancing experience and innovation. This research contributes to the understanding of the complex dynamics within family businesses and their potential to enhance sustainability through effective intergenerational collaboration.