The impact of socioemotional wealth on corporate reporting readability in a multinational family-controlled firm

Abstract

Extant research suggests that the most significant elements of a family firm’s socioemotional wealth (SEW)can drive financial reporting decisions. This paper explores this empirically by analyzing corporate disclos-ures of a case organization – Guinness, a multinational family brewing firm – over an extended period. Weidentify the presence of the SEW dimensions in the firm’s corporate disclosures and explore the relationshipbetween the most salient SEW dimension (family identity) and readability, measured by the Bog index. Theanalysis finds a positive association between family identity and readability in the period when the firmunder study can be defined as a family firm. Other SEW dimensions do not appear to have an influence onreadability. In addition, at the end of the period of study, when the firm under study ceased to be a familyfirm, the SEW dimensions failed to have an effect on readability.