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The influence of organizational factors on board roles

Leticia Pérez-Calero Sánchez (University of Sevilla, Sevilla, Spain) (Department of Management and Marketing, Universidad Pablo de Olavide, Seville, Spain)
Jaime Guerrero-Villegas (Department of Management and Marketing, Universidad Pablo de Olavide, Seville, Spain)
José Manuel Hurtado González (Department of Management and Marketing, Universidad Pablo de Olavide, Seville, Spain)

Management Decision

ISSN: 0025-1747

Article publication date: 19 June 2017

Abstract

Purpose

Using a contingency approach, the purpose of this paper is to study how organizational factors (such as the organizational life cycle, firm size, firm ownership concentration and firm technology) determine the relative importance of the monitoring and provision of resources roles provided by board members.

Design/methodology/approach

This paper highlights the importance of contingency factors in carrying out board’s roles using a sample of 579 European firms registered in the STOXX Europe 600 index. The authors used a longitudinal analysis for the period from 2002 through to 2011.

Findings

The results show that the monitoring role is more relevant for companies that are large, are operating at the mature and stagnant stages, have a dispersed ownership and are low-technology. However, the provision of resources role is more relevant for companies that are in the growth and stagnant stages, and have a concentrated ownership.

Originality/value

The traditional analysis that relates the board’s structure and composition to the board’s roles focuses on determining what board should be the best. It plays little attention to analyzing which organizational factors affect the importance and presence of monitoring or resource dependence roles. In this regard, this work adds significant insights to agency theory and resource dependence theory as, with a contingency framework, the research aims to find what functions the board needs to develop in order to get better firm performance.

Keywords

Acknowledgements

This work has been financed by the Ministry of Economy and Competitiveness of Spain through the Project ECO2016-75047-P and ECO2015-69301-R.

Citation

Sánchez, L.P.-C., Guerrero-Villegas, J. and Hurtado González, J.M. (2017), "The influence of organizational factors on board roles", Management Decision, Vol. 55 No. 5, pp. 842-871. https://doi.org/10.1108/MD-12-2015-0566

Publisher

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Emerald Publishing Limited

Copyright © 2017, Emerald Publishing Limited