The CEO’s last name matters: family control, independent oversight and tax avoidance

Purpose The objective of this study is to examine the relationship between family chief executive officers (CEOs) and corporate tax avoidance, and to assess the moderating role of board independence in this relationship within the context of Bangladesh, an emerging economy. Design/methodology/approach Based on a sample of the top 100 listed manufacturing companies for the years 2019–2023, the study employs both static and dynamic panel data analysis to derive its findings, underpinning the agency theory and socioemotional wealth theory. Findings The empirical results reveal a positive and statistically significant association between the presence of family CEOs and the level of tax avoidance, suggesting that family CEOs are more inclined to engage in aggressive tax planning. The analysis also indicates that board independence significantly moderates this relationship by constraining such behavior. Notably, the moderating effect of board independence becomes ineffective when family CEOs possess political affiliations, implying that political connections may override internal governance mechanisms. Practical implications The findings underscore the importance of robust regulatory frameworks and enhanced board independence in mitigating tax avoidance in family-run firms. This is particularly relevant for policymakers and regulators seeking to improve corporate governance and tax compliance in emerging markets. Originality/value To the best of the authors’ knowledge, this is the first study to empirically investigate the role of family CEOs in tax avoidance behavior in Bangladesh. The inclusion of board independence as a moderating variable adds novel insights into governance dynamics within family-owned enterprises in developing economies.