Religion in Family Firms: A Socioemotional Wealth Perspective on Top-Level Executives with Perceived Religiosity

Ernst, Fabian; Bendig, David; Puechel, Lea Article — Published Version Religion in Family Firms: A Socioemotional Wealth Perspective on Top-Level Executives with Perceived Religiosity Journal of Business Ethics Provided in Cooperation with: Springer Nature Suggested Citation: Ernst, Fabian; Bendig, David; Puechel, Lea (2024) : Religion in Family Firms: A Socioemotional Wealth Perspective on Top-Level Executives with Perceived Religiosity, Journal of Business Ethics, ISSN 1573-0697, Springer Netherlands, Dordrecht, Vol. 194, Iss. 3, pp. 707-730, https://doi.org/10.1007/s10551-023-05606-7 This Version is available at: https://hdl.handle.net/10419/315223 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. 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If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence. http://creativecommons.org/licenses/by/4.0/ Vol.:(0123456789) Journal of Business Ethics (2024) 194:707–730 https://doi.org/10.1007/s10551-023-05606-7 ORIGINAL PAPER Religion inFamily Firms: ASocioemotional Wealth Perspective onTop‑Level Executives withPerceived Religiosity FabianErnst1 · DavidBendig1· LeaPuechel1 Received: 10 June 2022 / Accepted: 18 December 2023 / Published online: 10 February 2024 © The Author(s) 2024 Abstract The extent and mechanisms through which religion intertwines with decision-making processes in family firms remain inadequately understood. Family firm owners, driven by their commitment to ethical business practices and the safeguarding of their socioemotional wealth, actively seek cues to inform their decision-making processes. This research demonstrates that, among these guiding cues, top-level executives’ perceived religiosity emerges as a relevant factor. Building upon the socioemotional wealth perspective and conducting a longitudinal analysis based on listed family firms between 2009 and 2018, our findings reveal a positive association between family voting rights and the presence of board members perceived to be religious. Furthermore, this relationship is less pronounced if family firms operate in industries with high research and development intensity. Our study confirms that boards with high shares of religiously perceived directors are positively associated with the appointment of chief executive officers perceived to be religious during succession events. We thereby present a unique perspective that acknowledges perceived religiosity as a micro-level constituent shaping board membership and successor selection. This investigation captures the intricate interplay between religion and family firms under a socioemotional wealth umbrella, offering important insights to the family business ethics discourse. Our research also offers practical implications for board and leadership diversity management in family firms. Keywords Family firms· Socioemotional wealth· Religious managers· Board of directors· Chief executive officer· Religious diversity Introduction Diversity within family firm boards has recently been associated with substantial digital transformation and growth (PwC, 2023), yet diversity in these boards remains limited (Mubarka & Kammerlander, 2022). This lack of diversity can be attributed to the desire to foster trust within the family coalition and promote a shared ethical understanding among leaders (PwC, 2023; Sorenson & Milbrandt, 2023), which results in usingcognitive filters’ and values’ inexecutive decision-making (Carpenter etal., 2004). Although existing board diversity measures focus on observable variables (e.g., gender), deeper-level variables like religion and spirituality could also play a role in fostering this predominantly homogenous leadership paradigm. After all, religious diversity has generally been acknowledged as one aspect of workplace and leadership diversity (Corrington etal., 2020; Gebert etal., 2014), despite remaining empirically undetected in family firm literature thus far (Anglin etal., 2023; Astrachan etal., 2020; Carpenter etal., 2004; Gebert etal., 2014). If we understand the implicit mechanisms through which religiosity enters family firm businesses, knowledge gained in this domain holds promise for cultivating diverse leadership within family firms, particularly in terms of the intricate facet of religion as a deeper-level variable. We aim to fill this gap by empirically exploring family firms’ leadership perceived religiosity through the lens of socioemotional wealth (SEW), a framework particularly prone to illuminate tacit family firm processes. For well-discussed reasons, religion as a diversity dimension is not widely reported in the US (Alewell & Rastetter, 2020), and yet, it still somehow enters and affects business choices due to its nature as an informal variable (Migheli, 2022). A growing body of research recognizes that religious and spiritual concerns are an important denominator * Fabian Ernst [email protected].de 1 University ofMünster, Münster, Germany 708 F.Ernst et al. of business choices (Alewell & Rastetter, 2020; Alshehri etal., 2021; Gebert etal., 2014; Shen & Su, 2017) as well as ethical work practices (Fathallah etal., 2020). To illustrate, following a period of misconduct, firms are more likely to choose chief executive officers (CEOs) with degrees from religiously affiliated universities (Connelly etal., 2020). Studies have, however, yielded incoherent empirical knowledge regarding the impact of religion on family business operations, thus leaving a significant gap in understanding how religiosity integrates into the fabric of family firms (Astrachan etal., 2020; Reck etal., 2022; Shen & Su, 2017), particularly due to the elusive character of religion (Alsheri etal., 2021). Despite this vagueness, one salient understanding remains: By virtue of their controlling power, family members can more readily and effectively integrate their spirituality or religiosity than other stakeholders (Astrachan etal., 2020; Fang etal., 2013; Pieper etal., 2020; Sorenson & Milbrandt, 2023), especially when members participate in strategic decision-making through voting rights (Smith & Rönnegard, 2016). Family firms maintain strong identities and are valuedriven, with a pronounced desire for ethical behavior (Astrachan etal., 2020). Personal religious beliefs are observable and closely linked to perceived ethical behavior (Connelly etal., 2020; Parboteeah etal., 2008); individual religiosity could thereforepotentially be used by family firm members as a favorable cue during choice processes of board members and succession events. Religion, defined as “any shared set of beliefs, activities, and institutions premised upon faith in supernatural forces” (Iannaccone, 1998, p. 1466), is a source of orientation for values and beliefs upon which family firm identity and business behavior can be based (Abdelgawad & Zahra, 2020). Albeit it is not directly visible (Gebert etal., 2014), family firm members rely on those disclosed elements of an otherwise invisible identity, henceforth called perceived religiosity. This study aims to reveal why perceived religiosity could play such an important role in family business behavior by looking for explanations within SEW, one mechanism through which family members weave out non-economic worth (Chen et al., 2022; Gomez-Mejia et al., 2007, 2010), assuming that family firms do not focus solely on maximizing financial returns, but also aim to protect their affective endowment. For example, succession choices have previously been attributed to differences in family members’ SEW considerations (Minichilli etal., 2014). Drawing from SEW literature (e.g., Chen etal., 2022; Gomez-Mejia etal., 2010) and religiosity in family businesses (e.g., Astrachan etal., 2020), we conceive the relationship between family firms and religion as one way to conserve SEW. We empirically investigate how the family coalition’s relative power as a shareholder in a family firm, as proxied by family voting rights, affects perceived board and CEO religiosity. We also consider industry research and development (R&D) intensity as a contingency factor, given that an environmental push for innovation may influence decisionmaking and appetite for risk(e.g. Jiang etal., 2015). This paper responds to the call for more research on the intersection of family business, SEW, and religion (Cruz, 2013; Lu etal., 2021; Madison & Kellermanns, 2013; Paterson etal., 2013; Shen & Su, 2017) by investigating (1) the relationships between family voting rights and perceived board religiosity as well as perceived board religiosity and CEO religiosity during succession events; (2) other external and contextual determinants of the relationship between family voting rights and perceived board religiosity, namely, industry R&D intensity; and (3) how and why religion weaves itself into family firm business mechanisms. We rely on a cross-industry sample of more than 900 firm-year observations of US listed family firms between 2009 and 2018. Our findings indicate that stronger family voting rights have a positive relationship with board members’ perceived religiosity, and this relationship is attenuated by the industry’s R&D intensity. By extension, board members’ perceived religiosity positively affects the CEO’s perceived religiosity in succession events. Our work advances three research strands: (1) religiosity in connection with SEW in family firms, (2) micro-level components of successor choice in family firms, and (3) boundary conditions of religiosity in family firms. Family firm and SEW literature has proposed that SEW and religiosity are related (Vazquez, 2016). We contribute to this stream by empirically showing manifestations of this relationship through perceived board and CEO religiosity. The SEW literature further seeks greater knowledge about the mechanisms underlying the relationship between family governance and religion (Astrachan etal., 2020; Chen etal., 2022; Shen & Su, 2017). We fill this research gap by showing that perceived religiosity plays a role in family business practices through its impact on successor choice. We complement dynastic succession research (Cai etal., 2019; Connelly etal., 2020; Damaraju & Makhija, 2018) by empiricallyunveiling another antecedent of successor choice: perceived religiosity among board members (Lu etal., 2021). We further show that industry R&D intensity serves as a boundary condition for the relationship between family voting rights and the presence of board members with perceived religiosity, thereby explaining the numeric differences of individuals perceived as religious in family firms. On the practical side, the empirical evidence of how religion weaves itself into succession mechanism contributes to the debate on the integration of religion as a dimension in diversity management (Alewell & Rastetter, 2020; Bendig & Ernst, 2023). Our study suggests that leaders’ increased awareness and sensitivity to the influence of their religiosity on business decisions can foster ethical management 709 Religion inFamily Firms: ASocioemotional Wealth Perspective onTop‑Level Executives with… competencies and promote ethical alignment among employees within family firms (Beugelsdijk & Klasing, 2016; Fathallah etal., 2020). Theory andConceptual Background Family Firms, theSocioemotional Wealth Perspective, andReligion Theoretically deriving the underlying reasons for family firms’ distinct behavior, Gomez-Mejia etal., (2007, 2011) introduced the seminal SEW perspective. SEW prescribes that family firms tend to focus on “non-financial aspects of the firm that meet the family’s affective needs, such as identity, the ability to exercise family influence, and the perpetuation of the family dynasty” (Gomez-Mejia etal., 2007, p. 106). Berrone etal., (2012, p. 259) pointed to “gains or losses in SEW [as] the pivotal frame of reference that family-controlled firms use to make major strategic choices and policy decisions.” Building on Gomez-Mejia etal.’s (2007) initial SEW concept and research from the social sciences, Berrone etal. (2012) proposed that SEW is likely a multidimensional construct. They consequently introduced the FIBER scale, comprising “family control and influence, identification of family members with the firm, binding social ties, emotional attachment of family members, and renewal of family bonds to the firm through dynastic succession” (Berrone etal., 2012, p. 259). These SEW dimensions are helpful because they reflect families’ different values on some affective outcomes compared to others (Debicki etal., 2016), leading to family firm heterogeneity (Li & Daspit, 2016), including board members’ different choices. In fact, family firm behavior depends on the degree of family involvement in governance and the types of SEW objectives (Li & Daspit, 2016). Although one approach to understanding family firm behavior—namely, SEW—has been established (Gomez- Mejia etal., 2007, 2011), the manifestation of SEW in family firms remains only partially understood (Chen etal., 2022;Chrisman & Patel, 2012; Chua etal., 2012; Li etal., 2021; Ng etal., 2019). Meanwhile, religion as a formative influence in family firms in interplay with SEW has attracted growing attention (e.g., Barbera etal., 2020; Shen & Su, 2017). Religious identity has been described as one key source of SEW, which lends support to the idea that religion could also lead to differences in family firms. Yet, the mechanisms underlying the relationship between family governance and religion (Astrachan etal., 2020; Barbera etal., 2020; Shen & Su, 2017) should be clarified. Knowledge about the relationship between religion and family business behavior is just starting to develop, but further research in this area has been in demand for some time (Cruz, 2013; Fathallah etal., 2020; Madison & Kellermanns, 2013; Paterson etal., 2013; Pieper etal., 2020). This research gap is closely related to a second one seeking to understand the antecedents of successor choice, particularly of top-level executives (Smith etal., 2021), through micro-level analysis (Lu etal., 2021). Exploring these two interconnected lacunae, as in the present paper, may offer valuable insights for theorizing about family firms. Table1 summarizes the results of previous work and presents insights into the research questions, methodological approaches, key findings, and remaining research gaps. When deconstructing SEW and understanding its psychological underpinnings, several similarities between SEW-led and religious behavior become apparent: a high (need for) social capital (Granqvist, 2014, for religion; Berrone etal., 2012, Chen etal., 2022, and Sorenson & Milbrandt, 2023, for SEW), a high sense of shared civic responsibility for altruistic or recognition purposes (McGuire etal., 2012, and Monsma, 2007, for religion; Chen etal., 2022, and Li etal., 2015, for SEW), the creation of intergenerational wealth (Keister, 2008, for religion; Habbershon & Pistrui, 2002, for SEW), and resilience and empowerment (Pieper etal., 2020, for both religion and SEW). Just as there are mixed results on family firms and ethical behavior (e.g., Vazquez, 2016), the results on religiosity and ethical behavior are mixed (e.g., Parboteeah etal., 2008). This underscoresthe needfor moreresearch. Successor Selection andPerceived Religiosity Management and ethics literature does not offer a cohesive picture of religious beliefs’ effects on individual behavior (Alshehri etal., 2021). When considering only its positive impact, people perceive religiosity as an indicator of more ethical behavior (Alshehri etal., 2021; Connelly etal., 2020; Hungerman, 2014) and greater spiritual capital, referring to human and social capital, and devotion to a mission (Abdelgawad & Zahra, 2020). Furthermore, religious people tend to be more empathetic (Markstrom etal., 2010), report higher feelings of love and compassion (Smith, 2008), are less impulsive (Francis, 1992), and promote the conservation of social order (Schwartz, 1992).Activating guilt on an emotional basis could explain why religious priming leads to ethical behavior (Sulaiman etal., 2022). Hence, ethical decision-making processes can result from, among other integral factors, an individual’s religiosity in private, in public, and in the workplace (Singhapakdi etal., 2000). Differences in ethical judgment can also occur between religiously perceived leaders. Current knowledge relates these differences to the principle of relativism among managers, which is a person’s belief about whether moral principles should be followed irrespective of circumstances (Oumlil & Balloun, 2009) and different views of God (hope, fear, and balanced) 710 F.Ernst et al. Table 1 Key literature on the intersection among SEW, religion, and succession mechanisms in the family firm context Topic Articles Methodological approach(es) Research question Key findings Identified research gap Key literature on SEW, succession, and religious characteristics Cui etal. (2015) Quantitative empirical Conclusive evidence of advantages of diversity? (inferred) Religion influences a firm’s position on workforce diversity and corporate social responsibility concerning diversity initiative investment Identify (dis-)advantages of diversity impact; establish an empirical relationship between distinct religious affiliations of top management teams and their firms’ diversity engagement Damaraju & Makhija (2018) Quantitative empirical What is the role of caste/ religion in CEO selection in India? (inferred) Caste/religion relates to CEO selection (i.e., as a form of information or positive discrimination) Investigate the effects of caste/ religion on CEO compensation Lu etal. (2021) Quantitative empirical What is the relationship between CEO traditionalism, personality characteristics, and successor choice? (inferred) Family firm founders’ religiosity is conducive to their succession intention Understand micro-foundations (e.g., CEO individual characteristics) in relation to intrafamily succession Key literature on family firms, SEW, and religion Abdelgawad and Zahra (2020) Quantitative empirical What is the role of religious identity in strategic renewal in privately held founder family firms? (inferred) Religious identity determines family firms’ spiritual capital Conditions that make religious identity beneficial for the family; understand the connection among religion, performance, and SEW; research how the family imbues the firm with religiosity; integrate SEW and firm performance into religiosity in family firms Minichilli etal. (2014) Quantitative empirical How do family owners’ concerns about protecting their SEW endowment relate to the relationship between CEO succession and financial performance? (inferred) Outside, non-family CEO choice represents mechanisms through which SEW and financial concerns are balanced Analyze larger and longitudinal datasets; theorize along FIBER dimensions; understand characteristics that lead to successor choice Reck etal. (2022) Qualitative empirical How does employees’ identification with a family firm shape internal ethical decision-making processes? (inferred) Identity processes influence how employees cope with ethical situations Understand aspects of identity in family firms and ethical behavior better Key literature on family firms and religion Barbera etal. (2020) Qualitative empirical “How did a single, multigenerational business family successfully enact their religious values in their business?” (p. 661) Religious values enhance family cohesion, are manifested in leadership style, and are transmitted through intergenerational succession Clarify the processes through which ethical behavior and religious values are associated in family firms; advance with quantitative study 711 Religion inFamily Firms: ASocioemotional Wealth Perspective onTop‑Level Executives with… Table 1 (continued) Topic Articles Methodological approach(es) Research question Key findings Identified research gap Jiang etal. (2015) Quantitative empirical “Do family firms with religious founders have less risk than other family firms?” (p. 260) Firms in China that adhere to Western religions invest less in fixed and intangible assets and have less leverage. Contributions to the literature on religion and risk-aversion Understand the link between religiosity and investment behavior in studies outside the Chinese context; map out the channels through which religiosity comes into effect Pieper etal. (2020) Quantitative empirical “How does religiosity affect family business goals?” (p. 759) Higher religiosity leads to short-term and long-term goal orientation. Greater effect on and greater variance in the long term Explore how to employ accurate measures of religiosity; account for effects on business activities; show how religiosity impacts other organizational stakeholders Shen and Su (2017) Quantitative empirical “Will SEW affect succession in interaction with religion?” (p. 151) “(F)irms with religious founders have higher intentions for ownership succession and management succession, more intangible assets, longer firm age, larger firm size, and higher return on equity, and are more leveraged than firms without religious founders.” (p. 156) Explain the relationship between religion and succession outside of the Chinese context Sorenson and Milbrandt (2023) Qualitative empirical “How do family business owners strengthen family social capital?” (p. 702) Family firm owners use family faith to sustain and establish ethical norms as well as social capital Research the role of family faith in promoting family business ethics with a quantitative approach 712 F.Ernst et al. (Alshehri etal., 2021). Yet religious individualsalso tend to be more risk-averse (Miller & Hoffmann, 1995) and less innovative (Bénabou etal., 2015) than non-religious people. Bendig and Ernst (2023) observe a correlation between the prevalence of religious directors on corporate boards and a decrease in both the filing and citation of digital patents. The manifestation of religion in individuals is multidimensional. However, “most of these dimensions are variants of cognitive (knowing), affective (feelings), and behavioral (doing) components” (Parboteeah etal., 2008, p. 389). Parboteeah etal. (2008) found that affective and behavioral components were linked to individuals’ willingness to justify unethical behavior, while the cognitive component did not reveal differing results; meanwhile, belief in church authorities revealed more ethical behavior while belief in religion did not. Hence, the behavioral aspect of religion, as measured in this research, is particularly important when understanding ethically favorable behavior. It also elaborates on the idea that behavior is perceivable and allows family members to identify micro-characteristics on which board member choice can be based (Connelly etal., 2020). Religiosity as perceived through behavior may more readily identify identical interests, make moral behavior more predictable, and help establish goal alignment (Pieper etal., 2020). “Recognizing that social psychological approaches can provide greater understanding of the human nature behind SEW phenomena” (Jiang etal., 2018, p. 141), the observation that perceived religiosity can be a marker in decision-making processes has been previously explained through several different approaches: attribution theory (Jiang etal., 2018; Weiner, 1985), developed to explain perceptions of responsibility; expectancy theory (Li etal., 2015), asserting the perceived probability that perceived religiosity in successors will lead to a positive outcome; social trust theory (Qiu etal., 2022), suggesting a mechanism in decision-making processes favors moments of trust; and image theory (Connelly etal., 2020), which is the idea that, in decision-making events, schematic knowledge structures help choose the best-fitting option according to value, trajectory, and strategy. Likely, all of these social psychological explanations influence family coalitions’ decision-making and lead to all but the same outcome: a greater number of religiously perceived top personnel in family firms. Interplay ofFamily Coalitions andBoard Members’ Perceived Religiosity One of the most important stakeholder groups in a firm is the board of directors, which “monitor[s] managers on behalf of shareholders” (Hillman & Dalziel, 2003, p. 384). Choosing board members carefully is important for the family’s link to the business, but also for family shareholders, because board features may affect both firm and social performance (Tenuta & Cambrea, 2022) and can set the tone for overall ethical behavior (Di Miceli da Silveira, 2022). Previous research has discussed the link between ethical and faith-based values. This section provides a brief overview of religious individuals’ tendency toward ethical and risk-averse behavior. First, religious managers are expected to behave more ethically than their non-religious counterparts, while family firms want to ensure that they are not “perceived by others as behaving unethically or against the best interests of the community” (Adams etal., 1996, p. 161). The public perceives ethical behavior positively, and founding families are “quite sensitive about the external image they project to their customers, suppliers, and other external stakeholders” (Berrone etal., 2012, p. 262). Therefore, family firms may perceive any public condemnation as particularly harmful (Westhead etal., 2001). Grullon etal. (2010) demonstrated that a religious environment prevents corporate misbehavior among firms. Firms in religious geographies are “less likely to backdate options, practice aggressive earnings management, and be the target of class action securities lawsuits” (Grullon etal., 2010, p. 1). Moreover, Du (2013) indicated that religiosity is positively related to firms’ tendencies to engage in philanthropic giving. Sorenson and Milbrandt (2023) found that family businesses attend to community outreach and care. Religious managers are also generally less likely to engage in risky behavior that could negatively affect the SEW of the owner family. Cai etal. (2019) investigated earnings management risks, Callen and Fang (2015) focused on stock price crash risk, Ma etal. (2020) explored accounting risks, Amin etal. (2021) studied workplace incidents risks, and Connelly etal. (2020) examined risks for corporate misconduct. All these studies found a negative relationship between the level of religiosity, either at the firm or individual level, and the propensity to take undesirable risks. Taken together, a board’s composition and behavior can affect the family’s SEW. Although employing family members on the board of directors is considered a successful strategy to protect a family’s SEW, family coalitions may also endorse nonfamily board members if such directors behave consistently with the expectations of the founding family. Board members and CEOs perceived to be religious could be considered an aspect of SEW flow, meaning that the hiring of religiously perceived CEOs and board members can be adjusted to maintain and create SEW as a stock (Chua etal., 2015; Gómez-Mejía etal., 2007). To fully understand the effect of religiosity, we refer to the five FIBER scale dimensions – namely, “family control 713 Religion inFamily Firms: ASocioemotional Wealth Perspective onTop‑Level Executives with… and influence, identification of family members with the firm, binding social ties, emotional attachment of family members, and renewal of family bonds to the firm through dynastic succession” (Berrone etal., 2012, p. 259). Figure1 offers an overview of the five SEW dimensions based on Berrone etal.’s (2012) work and highlights which of the five dimensions are particularly important as a mechanism of the relationship between family voting rights and board religiosity as well aswhich dimensions are less of a mechanism and more of an assumption. Perceived religiosity here acts as a proxy for the identification of characteristics connected to the three middle dimensions (i.e., identification of family members with the firm, binding social ties, emotional attachment). These three dimensions describe the dominant coalition’s “willingness” to pursue SEW (Swab etal., 2020), thereby referring to active practices through which SEW can be secured. We posit that the mechanisms in these three dimensions particularly connect the occurrence of religious board members with family ownership, as religious board members likely strengthen a family’s identification with the firm, enhance binding social ties, and protect the family’s emotional attachment to the firm. We posit that family coalitions favor board members with perceived religiosity, because “religion is significantly negatively (positively) associated with expense ratio (asset utilization ratio), the positive (reverse) proxy for owner-manager agency costs” (Du, 2013, p. 1). The readiness for social trust, as an informal mechanism in social systems, appears higher due to this association (Lu etal., 2021; Qiu etal., 2022). Concerning the first (family control and influence) and last (renewal of family bonds to the firm through dynastic succession) FIBER scale dimensions, we posit that the presence of religious board members may not serve any protective or destructive purpose but positions the family’s “ability” through which the dominant coalition acts and controls. However, this does not imply that the family is willing to do so (Swab etal., 2020). We follow recent research (Swab etal., 2020) positioning these two dimensions less as a mechanism and more as a core assumption suggesting that these must exist for families to exert control over SEW concerns. Hence, we expect the tendency of families to have religious executives on their boards to be stronger when their equity ownership allows them to substantially impact the board’s composition. Taken together, we conclude that having religious executives on a board can help families protect their SEW. We propose that the family owner’s choice of board members is influenced by the perceived probability that selecting religious individuals will lead to a positive outcome for SEW and that strong family ownership tends to place higher values on such outcomes (Li etal., 2015). Therefore, we posit: Hypothesis 1 Family voting rights are positively associated with a higher presence of board members with perceived religiosity. Socioemotional wealth dimensions Relationship with perceived board religiosity Family control and influence Identification of family members with the firm Binding social ties Emotional attachment Renewal of family bonds F I B E R No or very limited relationship between perceived board religiosity and family control and influence. No or very limited relationship between perceived board religiosity and renewal of family bonds. Expectation, that perceived board religiosity results in ethical and risk-averse behavior, thereby strengthening families’ identification with the firm, building up social ties, and increasing their emotional attachment. Fig. 1 Overview of the five FIBER scale items (Berrone etal., 2012) and role of perceived board religiosity in families’ SEW considerations 714 F.Ernst et al. Moderating Role ofanIndustry’s R&D Intensity ontheRelationship Between Family Voting Rights andPerceived Board Religiosity Previous research underscores the relevance of boundary conditions for strategic decision-making (Carpenter etal., 2004; Cooper etal., 2014; Eroglu & Hofer, 2014; Feng etal., 2017; McNamara etal., 2008; Sharfman, 1991) and that particularly industry conditions affect firm outcomes (Carpenter etal., 2004). We expect that the main relationship put forth in this research, based on changes in micro-level leadership characteristics (Lu etal., 2021), could also be impacted by occurrences within the surrounding industry. Moreover, those industry characteristics—in this case, industry R&D intensity—are expected to play a role in the relationship between family voting rights and board religiosity that are contrary to those characteristics often connected with religious individuals. Interestingly, previous research describes religious individuals as risk-averse (e.g., Jiang et al., 2015). R&D investment goes toward intangible assets and has uncertain payoffs, which is difficult to unite with riskaverse religious individuals (Jiang etal., 2015). Insular and non-pluralistic religious family identities can turn into behavioral rigidity, leading to the rejection of innovative developments (Abdelgawad & Zahra, 2020; Gilbert, 2005). Analogously, when it comes to top personnel’s opportunity-seeking behavior, in countries with prevailing Christian values, international market entry modes tend to be less opportunistic (Li, 2008) and show lower investment rates (Hilary & Hui, 2009). Indeed, Shen and Su (2017) described religious firm founders as potentially riskaverse, preferring succession inside the family or at least successors they can trust. Recent research further indicates that CEOs who attended a religious college tend to take fewer risks; this effect is even stronger in firms with board members pre-exposed to religion (Chen etal., 2023). Studies uniformly show that firms located in religious geographies or employing religious CEOs are generally less prone to risky behaviors related to investments and tend to emphasize business ethics as a corporate priority (Jiang etal., 2015). Uniting the SEW perspective with religion, we propose that industry R&D intensity weakens the relationship (Hypothesis 1) because religiosity is associated with limited innovation focus (Bénabou etal., 2015) and with values such as social capital, traditionalism, and security (Saroglou etal., 2004). On one hand, due to the contingency relationship (Carpenter etal., 2004), an industry with greater R&D intensity should attract a smaller share of individuals with perceived religiosity. On the other hand, family firms operating in an industry characterized by greater R&D intensity might prioritize leaders with risk-positive behavior over those with perceived religiosity. Therefore, we posit: Hypothesis 2 The positive relationship between family voting rights and the share of board members with perceived religiosity is attenuated by greater industry R&D intensity. The Board–CEO Relationship: Influence ofPerceived Religiosity During Succession Events CEO succession in family firms is more than a business decision because of the possible implications on family members’ SEW (Minichilli etal., 2014). Interestingly, CEO succession from outside the firm origin shows a performance advantage when the CEO is sociodemographically and socio-psychologically similar to incumbent executives (Georgakakis & Ruigrok, 2017; Zajac & Westphal, 1996). Board members appoint CEOs similar to themselves in terms of social caste (Damaraju & Makhija, 2018). Especially when the family’s role and their wish to create a family dynasty are strong, a CEO’s “role and behavior can be viewed as reflection of the family’s goals” (Lu etal., 2021, p. 228). Value congruence must therefore be particularly high (Lu etal., 2021). Considering perceived religiosity as a proxy for value congruence, we expect to see a positive relationship between a board of directors with higher perceived religiosity and religious CEOs, as the board of directors is also responsible for initiating and conducting CEO succession if required (Pitcher etal., 2000). Executives’ decisions might be biased in this regard (Carpenter etal., 2004) according to attribution, expectancy, and social trust theory. Another reason for biased choice lies in sociopolitical considerations. Most prominently, board members utilize governance structures to ensure oversight control. For example, boards establish appropriate reporting cycles and remuneration structures. Board members can also prevent potential operational issues by appointing CEOs whom they expect to minimize unlawful and unethical behavior. As previously elucidated, religiosity is generally associated with more ethical and risk-averse behavior. Specifically, Connelly etal. (2020) showed that religious CEOs are less likely to engage in corporate misconduct while Cai etal. (2019) demonstrated that religious CEOs less often participate in earnings management. Considering the social psychological and sociopolitical mechanisms, we anticipate that religious board members are more likely to appoint religious CEOs during succession events. Therefore, we posit: Hypothesis 3 In family firm succession events, board members’ perceived religiosity is positively related to the appointment of CEOs also perceived as religious. 721 Religion inFamily Firms: ASocioemotional Wealth Perspective onTop‑Level Executives with… Table 6 Empirical results for board members’ perceived religiosity Explanatory variables are lagged by one year and winsorized at the 1% level IV independent variable ***p < 0.001, **p < 0.01, *p < 0.05, †p < 0.10; Community religiosity omitted by STATA in fixed effects model when using xtreg, fe command Main analysis Robustness checks Model 1 Controls only Model 2 IV & controls Model 3 2-year lag Model 4 Fixed effects Coeff (St. Err.) P-value (z-value) Coeff (St. Err.) P-value (z-value) Coeff (St. Err.) P-value (z-value) Coeff (St. Err.) P-value (t-value) Board members’ perceived religiosity 3.42*** (1.03) 0.001 (3.34) 2.08* (0.93) 0.025 (2.24) 4.86*** (1.16) 0.000 (4.18) Firm size − 0.03 (0.10) 0.760 (− 0.31) − 0.01 (0.10) 0.890 (− 0.14) − 0.03 (0.11) 0.778 (− 0.28) 0.80* (0.37) 0.033 (2.16) Capital intensity − 0.23† (0.14) 0.100 (− 1.65) − 0.23† (0.13) 0.073 (− 1.79) − 0.29* (0.12) 0.017 (− 2.38) 0.98 (0.73) 0.186 (1.33) Leverage ratio − 0.08 (0.09) 0.368 (− 0.90) − 0.12 (0.09) 0.173 (− 1.36) 0.10† (0.05) 0.072 (1.80) − 0.10* (0.04) 0.013 (− 2.52) Firm performance − 0.04 (0.09) 0.655 (− 0.45) − 0.05 (0.09) 0.570 (− 0.57) 0.02 (0.09) 0.861 (0.18) 0.10* (0.04) 0.020 (2.35) Firm age 0.01 (0.01) 0.569 (0.57) 0.00 (0.01) 0.854 (0.18) 0.01 (0.01) 0.207 (1.26) − 0.03** (0.01) 0.001 (− 3.58) Community religiosity − 2.29 (1.42) 0.106 (− 1.62) − 2.87* (1.44) 0.046 (− 2.00) − 2.53† (1.52) 0.096 (− 1.67) − − Board size − 0.03 (0.08) 0.716 (− 0.36) 0.02 (0.08) 0.771 (0.29) 0.01 (0.07) 0.905 (0.12) 0.00 (0.05) 0.995 (0.01) Board independence − 1.14 (1.79) 0.524 (− 0.64) − 1.44 (1.84) 0.432 (− 0.79) − 0.53 (1.74) 0.762 (− 0.30) 17.63*** (3.60) 0.000 (4.90) Board average age 0.01 (0.04) 0.689 (0.40) 0.01 (0.04) 0.846 (0.19) − 0.03 (0.03) 0.428 (− 0.79) 0.04 (0.04) 0.288 (1.07) Constant 0.55 (2.98) 0.853 (0.19) 0.04 (2.80) 0.988 (0.01) 0.90 (3.16) 0.776 (0.29) − 21.1*** (2.40) 0.000 (− 8.77) Year-fixed effects Yes Yes Yes Yes Pseudo R20.1603 0.2334 0.2265 – R2– – – 0.8925 N 126 126 128 126 722 F.Ernst et al. R-squared compared to a regression without the instrument (0.84 vs. 0.69). The Cragg-Donald Wald F-values of 638.46 exceed the Stock-Yogo critical value of 16.38. Rerunning our regression models with this new instrument provided comparable results, offering confidence that omitted variable bias is likely not an issue. General Discussion Our findings suggest that family firms with strong family coalitions, as measured through family voting rights, are more likely to employ religious boards of directors. Religious boards are subsequently more likely to appoint religious CEOs, cascading the presence of religious top-level executives. The relationship between strong family coalitions and religious boards of directors is less pronounced when industry R&D intensity is higher. We illuminate the role of SEW and the factors leading to religious beliefs in both board members and CEOs. In doing so, we establish a conceptual understanding, backed by empirical data, that explains how the religiosity of boards and CEOs can be interpreted from the perspective of SEW. This allows us to understand the micro-foundations of CEO succession to a greater degree. Perceived religiosity, as a characteristic of board members and CEOs, relates to increased religious successor selection, irrespective of family affiliation. Thus, we identified an additional metric in which family leadership is undiversified. Although academic debates show the complex relationship between individual characteristics and a firm’s context and industry (Cooper etal., 2014; Feng etal., 2017; McNamara etal., 2008), our results generally support the notion Table 7 Empirical results for CEO’s perceived religiosity, mainline Protestants, and Catholics in relation to financial performance Explanatory variables are lagged by 1 year and winsorized at the 1% level ***p < 0.001, **p < 0.01, *p < 0.05, †p < 0.10 Model 1a Return on assets Model 1b Revenue (log) Model 1c Market share Coeff (St. Err.) P-value (t-value) Coeff (St. Err.) P-value (t-value) Coeff (St. Err.) P-value (t-value) CEO perceived religiosity (all) − 0.01 (0.01) 0.555 (− 0.59) − 0.01 (0.05) 0.833 (− 0.21) − 0.00 (0.01) 0.517 (− 0.65) Control variables included Yes Yes Yes Year-fixed effects Yes Yes Yes Number of firms 124 124 124 N 862 862 862 Model 2a Return on assets Model 2b Revenue (log) Model 2c Market share Coeff (St. Err.) P-value (t-value) Coeff (St. Err.) P-value (t-value) Coeff (St. Err.) P-value (t-value) Mainline Protestant CEOs − 0.01 (0.02) 0.790 (− 0.27) 0.03 (0.09) 0.739 (0.33) − 0.00 (0.01) 0.856 (− 0.18) Control variables included Yes Yes Yes Year-fixed effects Yes Yes Yes Number of firms 124 124 124 N 862 862 862 Model 3a Return on assets Model 3b Revenue (log) Model 3c Market share Coeff (St. Err.) P-value (t-value) Coeff (St. Err.) P-value (t-value) Coeff (St. Err.) P-value (t-value) Catholic CEOs − 0.01 (0.01) 0.579 (− 0.56) − 0.02 (0.06) 0.750 (− 0.32) − 0.01 (0.01) 0.388 (− 0.87) Control variables included Yes Yes Yes Year-fixed effects Yes Yes Yes Number of firms 124 124 124 N 862 862 862 723 Religion inFamily Firms: ASocioemotional Wealth Perspective onTop‑Level Executives with… a connection exist. Theyclearly shows that more intensive industry R&D attenuates the relationship between strong family voting rights and the share of board members with perceived religiosity. One possible explanation for this is that family firms strongly oriented toward the social needs of the family members prioritize family satisfaction and SEW as well as creativity in long-term business orientation over investing in other activities connected with risk aversion (Chen etal., 2022; Sorenson & Milbrandt, 2023). Religion and family interact in a nuanced way when considering different religions (Fathallah etal., 2020), which is why our post-hoc analysis produced diverging results. Religion is a double-edged sword when it comes to economic effects (Abdelgawad & Zahra, 2020) and is always related to the complexity of the makeup of a religious group (Parboteeah etal., 2008). Considering that Evangelical Protestantism has its roots in Pietism, known for its devout work and long working hours as well as good infrastructure, Spenkuch’s (2017) explanations in his study of the connection between religious values and market outcomes in Germany could offer insights into why only Evangelical Protestant CEOs are associated with greater financial performance in our US sample. Theoretical Implications Our study contributes to the family firm and ethics literature in several important ways and addresses previous research gaps in our understanding of how religiosity permeates family firm business activities (Astrachan etal., 2020). First, by incorporating perceived religiosity into the relationship between family firm voting rights and board members, we uncovered a mechanism through which the relationship between SEW and religiosity is manifested in family firms. We argue that employing religious managers is an additional avenue for ensuring SEW stock because religiously perceived personnel are thought to behave ethically and engage in fewer unnecessary risks (Bénabou etal., 2015; Cai etal., 2019; Connelly etal., 2020). Perceived religiosity seems to be an indicator for related traits, which confirms previous observations (Alsherhri etal., 2021; Connelly etal., 2020; Parboteeah etal., 2008). This theoretical development is important because most past research focused on the founding family’s religious identity rather than on how that religiosity is imparted through the family business. The mixed results on financial performance make it natural to conjecturethat changes in perceived board and CEO Table 8 Empirical results for Evangelical Protestant CEOs and financial performance Explanatory variables are lagged by one year and winsorized at the 1% level ***p < 0.001, **p < 0.01, *p < 0.05, †p < 0.10 Model 1 Return on assets Model 2 Revenue (log) Model 3 Market share Coeff (St. Err.) P-value (t-value) Coeff (St. Err.) P-value (t-value) Coeff (St. Err.) P-value (t-value) Evangelical Protestant CEO 0.08*** (0.02) 0.000 (3.63) 0.18** (0.07) 0.008 (2.69) 0.15*** (0.02) 0.000 (6.67) Firm size 0.01 (0.02) 0.611 (0.51) 0.82*** (0.05) 0.000 (15.12) 0.04*** (0.01) 0.000 (4.63) R&D intensity − 0.61† (0.32) 0.062 (− 1.89) − 1.18 (1.20) 0.329 (− 0.98) 0.08 (0.13) 0.554 (0.59) Capital intensity 0.01 (0.01) 0.376 (0.89) − 0.23* (0.10) 0.019 (− 2.38) 0.00 (0.01) 0.967 (0.04) Leverage ratio 0.00 (0.00) 0.590 (0.54) − 0.00 (0.00) 0.195 (− 1.30) 0.00† (0.00) 0.085 (1.74) Firm age 0.00 (0.00) 0.613 (0.51) − 0.00* (0.00) 0.015 (− 2.46) − 0.00† (0.00) 0.088 (− 1.72) CEO salary 0.00 (0.00) 0.167 (1.39) 0.00† (0.00) 0.064 (1.87) − 0.00 (0.00) 0.576 (− 0.56) CEO age 0.00 (0.00) 0.212 (1.26) 0.00 (0.00) 0.153 (1.44) − 0.00 (0.00) 0.763 (− 0.30) Constant 0.00 (0.07) 0.957 (0.05) 5.93*** (0.28) 0.000 (21.55) 0.07 (0.06) 0.289 (1.06) R2 0.0014 0.6458 0.1870 Industry-fixed effects Yes Yes Yes Year-fixed effects Yes Yes Yes Number of firms 124 124 124 N 862 862 862 724 F.Ernst et al. religiosity are connected to SEW considerations (Miller & Le Breton-Miller, 2014). The SEW dimensions “identification of family members with the firm,” “binding social ties,” and “emotional attachment” (see Berrone etal., 2012, p. 263) appear particularly important in this regard as they are valued and attributed via means of perceived religiosity. In other words, perceived religiosity affords family members to pursue a strong sense of belonging (binding social ties), internal contractual relationships based on trust, external relationship building with other stakeholders (binding social ties) as well as to increase affective decision-making (emotional attachment). This research thereby extends family business literature by providing an explanation for how perceived religiosity affects SEW. Also, we provide initial empirical evidence on the religious convictions of non-fam- ily stakeholders as a determining factor for the protection of SEW in family firms. Second, we propose a new antecedent for family firms’ successor choice: perceived religiosity. This trait can be thought of as preserving a family’s SEW and pointing toward more ethically sound behavior. Despite the recent interest in the micro-level components of family business succession (e.g., Lu etal., 2021) and the first insights into the appointments of religiously perceived CEOs (Connelly etal., 2020; Damaraju & Makhija, 2018), the analysis of perceived religiosity and its organizational contingencies has thus far not affected family firm research. By connecting shareholder characteristics and CEOs perceived as religious, this study Table 9 Complementary tests: Family voting rights & board members’ perceived religiosity Explanatory variables are lagged by one year and winsorized at the 1% level ***p < 0.001, **p < 0.01, *p < 0.05, †p < 0.10 1 Religious non-family board members a) We include industry- and year-fixed effects in all of our models, resulting in a large number of control variables. Therefore, Chi2 is not reported in STATA. The Chi2 herein represents Wald-tests conducted on variables of interest exclusively Model 1 Share of RNF-BM1 Model 2 FLR Model 3 2-year lag Coeff (St. Err.) P-value (z-value) Coeff (St. Err.) P-value (z-value) Coeff (St. Err.) P-value (t-value) Family voting rights 0.08** (0.02) 0.001 (3.35) 1.61*** (0.21) 0.000 (7.69) 0.14** (0.05) 0.002 (3.11) Industry R&D intensity – – − 2.65* (1.09) 0.016 (− 2.42) − 0.21 (0.26) 0.410 (− 0.82) Family voting rights × Industry R&D intensity – – − 16.9*** (3.70) 0.000 (− 4.57) − 1.75* (0.83) 0.034 (− 2.12) Firm size 0.00 (0.00) 0.893 (0.13) 0.12** (0.04) 0.002 (3.09) 0.01 (0.01) 0.278 (1.09) Capital intensity 0.00 (0.01) 0.884 (0.15) − 0.25*** (0.04) 0.000 (− 6.42) − 0.02 (0.01) 0.103 (− 1.63) Leverage ratio − 0.00* (0.00) 0.018 (− 2.38) − 0.01 (0.01) 0.227 (− 1.21) − 0.00 (0.00) 0.359 (− 0.92) Firm performance 0.00** (0.00) 0.008 (2.65) 0.01 (0.03) 0.692 (0.40) 0.00 (0.00) 0.220 (1.23) Firm age 0.00 (0.00) 0.814 (0.24) 0.01* (0.00) 0.023 (2.27) 0.00 (0.00) 0.427 (0.79) Community religiosity 0.10 (0.07) 0.119 (1.56) 2.89*** (0.42) 0.000 (6.95) 0.43** (0.15) 0.005 (2.80) Share of religious board members 0.87*** (0.05) 0.000 (27.96) – – – – Constant − 0.05 (0.05) 0.309 (− 1.02) − 3.31*** (0.31) 0.000 (− 10.83) − 0.06 (0.10) 0.532 (− 0.62) Chi2 a) 965.73 – 17.41 Pseudo R2 – 0.0651 – Industry-fixed effects Yes Yes Yes Year-fixed effects Yes Yes Yes Number of firms 147 147 146 N 986 986 966 725 Religion inFamily Firms: ASocioemotional Wealth Perspective onTop‑Level Executives with… provides evidence of “how and why […] religious values influence the purely economic evaluation of potentially profitable courses of actions” (Smith etal., 2021, p. 5). Third, our study contributes to the growing literature on family firm heterogeneity by highlighting the boundary condition industry R&D intensity for the relationship between family voting rights and board members perceived as religious. Industry R&D investment appears to decrease the influence of perceived religiosity and, thus, the contingency of religiosity in family firms. Therefore, we go beyond prior work indicating that family members’ SEW considerations shape the outcomes of firm-level R&D (Bendig etal., 2020), but in addition—industry-level R&D intensity shapes the processes through which SEW is preserved. Fourth, this study is also a direct response to the call for research at the intersection of business ethics and family businesses (Vazquez, 2016). Our research provides “answers regarding questions as to how […] business-owning families [can] incorporate their family values and ethical behavior into the governance of the family business when family involvement is low” (Vazquez, 2016, p. 706). Our study provides a novel rationale for why family firms with stronger family coalitions employ more executives perceived to be religious, thereby serving SEW and ethical considerations of the owning family. Recent thought-provoking research findings have highlighted that greater cohesion among family members can lead to greater secret-hiding driving unethical behavior (Jiang & Min, 2023). Families’ ethical considerations that initially lead to the choice of board and CEO can thereby stand in contrast to subsequent unethical behavior. Managerial Implications The results expose the role ofperceived religiosity in board compositions. Therebythey bring in a new contingency in the explanation of board and leadership diversity in family firms; which leads to the questioning of equality in family firm recruiting practices. Working with the results of this research could move the family firm management field beyond representational diversity based on readily identifiable categories such asgender to a deeper-level understanding of the practices that hinder or support diversity, including perceived religiosity in combination with SEW considerations. There are two obvious reasons why family firm management should care: First,family firm board diversity—which includes variables already under observation such as age and disabilitybut also implicit, deeper-level variables such as religion—is seen as a catalyst for prosperity and digital transformation (PwC, 2023). Second, societal pressure to enhance inclusion, equity, and diversity efforts has led to judicial scrutiny, particularly in terms of gender, racial, and religious discrimination. Regulatory guidelines (e.g., NASDAQ Board Diversity Rule) increasingly require firms to appoint top personnel from underrepresented minorities, making it important to understand the practices that inform, support, or hinder top personnel’s diversity. Although religion has not been officially included as a diversity metric, through this research, we show how religiously perceived top personnel matter to this end, as related power mechanisms result in religious leadership homogeneity. There are concrete steps helping firms to ensure that rational decision-making processes are not biased by board members’ personal preferences such as ethics awareness trainings for leadership self-reflexivity as well as the implementation of diversity management to act upon self-reflection. This suggestion is especially important considering that our post-hoc analysis indicated a positive relationship between higher voting rights and perceived religiosity in non-family board members. Family firms can recognize the potential influence of religiosity even among non-family board members and consider it as an implicit factor in their governance structures. Managers and other family firm personnel could benefit from understanding this influence, and considering the religious and ethical ideologies when developing ethics and diversity policies or codes of conduct could help prevent misinterpretation of these values. Including religious minorities as a pillar in a firm’s internal diversity policies is an appropriate management step to facilitate a common understanding among employees from different religious backgrounds ultimately, integrating diverse religious perspectives can contribute to a broader ethical understanding and decision-making process. At the same time, religion in the workplace should not be ignored, but disclosure should be absolutely voluntary (Alewell and Rastetter, 2020). It is important to note that family firm diversity management can only truly be prioritized, when family firm owners overcome their overreliance on relational trust mechanisms during succession choices and board appointments. Family firm owners consistently identify fear of conflict and distrust as preventing them from making changes to a trustful, institutional culture, as they expect trust to be higher between those similar to themselves (Beugelsdijk & Klasing, 2016; Jiang & Min, 2023; PwC, 2023). If family firm owners consider relational trust to be a superior characteristic in the workplace due to a fear of conflict resulting from human differences, formal governance structures (shareholder agreements, family protocols, etc.) should be established to increase the chance of minorities entering the circle of trust. From a market perspective, our findings could inform shareholders’ and stock market analysts’ risk assessments, as the tendency for risk-averse and ethical business operations is 726 F.Ernst et al. amplified through more religiously perceived top personnel in family firms. Furthermore, if investment portfolios are increasingly guided by diversity (Mirchandani, 2023) and if religious minorities are included as a (voluntary) diversity metric as suggested (see, e.g., Alewell & Rastetter, 2020), then those companies who underperform on this metric will be at a disadvantage in the marketplace. Limitations andFuture Research Avenues Our measure of top-level executives’ perceived religiosity faces some structural constraints. Especially for research with secondary data, finding appropriate proxies for individuals’ religious convictions is challenging, resulting in various approaches, such as name (Damaraju & Makhija, 2018), place of birth (Ma etal., 2020), or undergraduate university (Connelly etal., 2020). Our measure provides additional behavioral information on leisure activities, yet we cannot preclude the possibility that executives may be religious but not covered by our data. However, following Cai etal., (2019, p. 197), we argue that “the measurement error is not systematically related to the corporate outcome that we examine, the noise in the measure works against finding a statistically significant effect of CEOs’ religiosityrelated traits.” According to previous research, prayer and attendance at religious services are “negatively related to justifications of ethically suspect behaviors” (Parboteeah etal., 2008, p. 390). Researchers could explore other avenues to approximate the religiosity of top-level executives based on alternative data sources, such as non-sectarian approaches (e.g., universities not associated with a particular religion) (Pieper etal., 2020) and using other methodologic approaches (e.g., interviews). Second, family firm classifications differ significantly across studies. We used an expansive definition of family firms (Gomez-Mejia et al., 2011; Zellweger, 2017). Future researchers could investigate the interplay of board religiosity with amended family firm definitions (Jiang & Min, 2023; Villalonga & Amit, 2006). They could also empirically test other dependent variables, such as long- and short-term goals (Pieper etal., 2020). Similarly, SEW measurement has been subject to some debate; as SEW’s different dimensions might provide more nuanced knowledge about the relationship between strong family coalitions and religious boards and CEOs, it would be interesting to see SEW operationalized and address some researchers’ requests in this area (e.g., Swab etal., 2020). Finally, our research design only allowed us to measure whether a given top-level executive is perceived as one of three Christian denominations. Future research should overcome the data limitation to include religious groups such as Judaism, Hinduism, Buddhism or Islam, which we believe are also important factors in family firms in the US and other geographies. Motivated by the limited diversity observed in family boards and the unexplored connection between religion and SEW considerations within this context, this research investigates the mechanisms and underlying reasons for the integration of religion in family firms. Collectively, our findings indicate that religion significantly influences SEW considerations, manifesting through board members’ and CEOs’ perceived religiosity, thereby reinforcing the prevalence of mono-religious leadership in family enterprises. We trust that these outcomes will stimulate future investigations into the implications of religion in family businesses. Funding Open Access funding enabled and organized by Projekt DEAL. Declarations Conflict of interest Our manuscript has not been published or accepted for publication. It is not under consideration at another journal. An earlier version of this manuscript has been accepted for presentation at Babson conference in June 2022. The data is secondary data, but used in a unique combination for this study. Should you select our manuscript for peer review, we have no conflict of interest to disclose. Many thanks for your time and consideration. We look forward to your response. Open Access This article is licensed under a Creative Commons Attribution 4.0 International License, which permits use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons licence, and indicate if changes were made. The images or other third party material in this article are included in the article’s Creative Commons licence, unless indicated otherwise in a credit line to the material. If material is not included in the article’s Creative Commons licence and your intended use is not permitted by statutory regulation or exceeds the permitted use, you will need to obtain permission directly from the copyright holder. To view a copy of this licence, visit http://creativecommons.org/licenses/by/4.0/. References Abdelgawad, S. G., & Zahra, S. A. (2020). Family firms’ religious identity and strategic renewal. 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