Family firms and employee‐oriented corporate culture: Evidence from sexual harassment disclosures

Abstract We investigate differences in corporate culture between family and non‐family firms using sexual harassment reports as proxies. Firms with weak and permissive cultures are expected to have more sexual harassment incidents but many of them could go unreported due to fears of retribution. In contrast, firms with strong corporate cultures could have fewer incidents but with more of them being reported due to employees feeling safe to do so. We find that family firms led by non‐founder CEOs report significantly more sexual harassment cases than founder CEO family firms or non‐family firms, with evidence that is more consistent with this pattern reflecting a comparatively stronger corporate culture.