Exploring the Risks in Family-Owned Businesses in India: A Mixed Approach to Corporate Governance, Sustainability, ESG, and Value Creation

This study investigates the multifaceted risks confronting family-owned businesses in India, employing a mixed-methods approach that integrates qualitative thematic analysis with quantitative statistical techniques. The research utilizes secondary data from 200 National Stock Exchange (NSE)-listed family-owned companies, providing a comprehensive overview of the challenges these enterprises face. Qualitative analyses, conducted using NVivo and ATLAS.ti, identified ten critical risk dimensions: financial, governance, market, succession, technology, economic, regulatory, human resource, innovation, and reputation. Financial risks, including capital constraints and limited access to external funding, emerged as significant themes, highlighting their impact on business sustainability. Governance risks, characterized by ineffective decision-making and lack of professional management, were also prominent, underscoring the need for robust governance frameworks. Quantitative analyses revealed strong negative correlations between these risk factors and key performance indicators. For instance, financial constraints showed a significant negative correlation with business performance (r = -0.56, p < 0.05), while governance issues correlated negatively with profitability (r = -0.62, p < 0.01). Regression analysis further confirmed these relationships, indicating that board independence (β = 0.412, p < 0.001) and stakeholder engagement (β = 0.478, p < 0.001) are significant positive predictors of ESG performance, whereas family ownership negatively impacts ESG scores (β = -0.361, p < 0.001). These findings align with existing literature, emphasizing the importance of professionalizing governance structures and diversifying financial resources to enhance the resilience of family-owned businesses. The study contributes to the understanding of the complex interplay between various risk dimensions and business performance, offering insights that can inform the development of structured risk management strategies. By addressing these challenges, family-owned businesses in India can improve their long-term viability and continue to play a pivotal role in the country's economic development