We address the issue of family firm heterogeneity and its implications for corporate governance and firm outcomes. We apply social identity theory to differentiate between clan and financial family firm identities and to explain how the domination of each identity leads to distinct governance needs and choices. We propose that family firms dominated by a clan identity will employ a unified bundle of internal corporate governance mechanisms, enhancing non-financial performance outcomes. A financial family firm identity will, on the other hand, result in implementation of a dispersed corporate governance bundle, enhancing the firm’s financial outcomes.