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This paper addresses recent calls to narrow the micro-macro gap in management research (Bamberger, 2008), by incorporating a macro-level context variable (country) in exploring micro-level determinants of board effectiveness. Following the integrated model proposed by Forbes and Milliken (1999), we identify three board processes as micro-level dete...
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Context 1
... first set of regressions was performed considering the control task performance as dependent variable. As evident from Table 4, all the models are significant and adjusted R 2 range from 0.08 (model I) to 0.41 (model V). Further, the most significant F-changes are between model II and model III (27.2 ÃÃÃ ) and model III and model IV (81.3 ÃÃÃ ), indicating the relevance of board processes and the country variable to predict control task performance. ...
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Citations
... psychological processes. This model made it possible to better assimilate how board-related processes can influence the performance of directors individually and collectively, and ultimately that of their organizations (Ingley & van der Walt, 2005;Minichilli et al., 2012;Zattoni et al., 2015). However, several distinct board processes are intertwined or simply absent from the proposed framework. ...
This article identifies configurations in terms of original board-related processes (i.e., establishment, integration, centralization, and bureaucracy) that can stimulate innovation. A singular theorization is developed around a continuum logic and various theoretical postulates. Its experimentation via a configurational approach (Fiss, 2011; Furnari et al., 2021; Misangyi et al., 2017) has been applied to data collected through a survey of 300 small and medium-sized enterprises (SMEs). Ultimately, the results show that innovation may result from complex combined effects between four board-related processes that occur at different times (i.e., upstream, midstream, and downstream) and evolve according to SMEs’ bi-dimensional level of growth (i.e., size and age). Thus, this study notably goes beyond the simplistic view that currently prevails in the literature regarding the hypothesis of linear links between the board of directors (BoD) and innovation. By the same token, this work emancipates itself from the tendency to establish hierarchies implying that certain isolated elements would necessarily be pre-eminent regarding innovation. These findings, which integrate the necessary nuanced approach when studying such a complex phenomenon, have made it possible to generate multiple contributions, both theoretical and practical.
... For example, does the kind of international variety within and across CG teams matter? That is, to what extent can different combinations of nationalities, in conjunction with other types of characteristics, such as education and experience, influence different types of dynamics at a TMT or at a board level (see also, e.g., Minichilli et al., 2012) ...
... According to Basco and Voordeckers (2015), Farquhar (2011), Minichilli, Zattoni, Nielsen, andHuse (2012), the ability of the board to effectively carry out its roles is what determines the effectiveness of the board. However, Jansen (2021) does not use board role performance as a stand-in for board effectiveness. ...
... Jansen (2021) equally found evidence that board role performance mediates (Baron and Kenny, 1986;Farquhar, 2011;Kenny, 2014;Namazi and Namazi, 2016) the relationship between board processes (independent variables) and board effectiveness (dependent variable) except for the board processes cohesiveness and affective conflict, where the relationship is only mediated via the board service role. Finally, Jansen (2021) found further evidence that the control and service roles of the board are positively related to board effectiveness, confirming that there are basically 2 principal board roles, the control role and the service role, (Aberg, Bankewitz and Knockaert, 2019;Farquhar, 2011;Minichilli et al., 2012). ...
... Traditionally, most literature about board effectiveness has been financial-economic and taken an agency theory perspective focused on quantifiable board characteristics such as board size or number of non-executive directors (Kuoppamäki, 2018). Despite mounting empirical evidence that board processes are more reliable predictors of a board's effectiveness than board characteristics (Basco and Voordeckers, 2015;Minichilli et al., 2012;Pugliese, Nicholson, and Bezemer, 2015;Jansen, 2021), this input-output approach ignores the actual board processes, or the dynamics within the board. Following Forbes and Milliken's (1999) seminal work on boards of directors as strategic decision-making groups, research has only recently been conducted that tries to shed some light on this "black-box" of actual board behavior by examining the relationships and behavior between board members mutually as well as between the board and management (Basco and Voordeckers, 2015;Heemskerk, 2019;Pugliese et al., 2015;Jansen, 2021). ...
In this empirical study, UK and Romanian listed firms are analyzed and compared in order to determine the correlations between board processes, board role performance, and board effectiveness. Explanatory and quantitative in nature and based on the survey method, the research design uses validated statements based on a 7-point Likert-type scale, grouped into validated constructs. It was sent to 342 chairmen of selected Romanian and British listed companies. The study provides additional support for the moderating impact of national settings (legal, institutional, and cultural) on board effectiveness, the mediating effect of board roles on board processes, and the relevance of those board processes as predictors of board effectiveness. This study adds to the sparse body of research that examines the influence of board processes on board performance as well as the moderating role played by the national context in these processes and, ultimately, board effectiveness. The primary drawback of this study is the small sample size (55), which suggests that the results are less reliable and less generalizable. To ensure the homogeneity of the sample, however, a number of measures were taken, beginning with a distinctive dataset of enterprises with equivalent sizes and industry representation. The study is helpful for regulators who wish to better regulate board conduct as well as board directors and chairmen of publicly traded firms since it can assist them in better understanding and controlling board behavior.
... Therefore, this study aims to examine the influence of boards of directors' competence in promoting and implementing CSR practices on financial performance in Jordanian firms during COVID-19, through the mediating role of CSR. Smith (1863) initiated the exploration of boards of directors' influence on their respective firms over 150 years ago, an investigation that remains pertinent today (Minichilli et al., 2012). The sustained scholarly attention to the subject underscores the board's pivotal role. ...
Despite the growing literature on corporate social responsibility (CSR), little is known about how the board of directors' competence can affect the CSR‐financial performance relationship during severe uncertainties such as the COVID‐19 outbreak. This paper focuses on exploring the mediating role of CSR in the connection between board competence and corporate financial performance amidst global uncertainties. The sample consists of Jordanian companies listed on the Amman Stock Exchange. Data were analyzed using the partial least square structural equation modeling. The findings show that boards' CSR competence has a direct and indirect positive impact on financial performance. Therefore, boards of directors' CSR competence can be seen as enablers for CSR activities. In this regard, companies could invest more in qualifying board directors to be socially responsible and enhance their role in improving corporate financial performance. This study identifies and provides empirical evidence on a critical enabler of CSR activities (i.e., boards of directors' CSR competence) from a developing country perspective. This, in turn, could widen the management and other stakeholders' understanding of CSR‐enhancing factors and therefore increase its efficiency. We provide theoretical and practical implications to guide regulators and businesses to ensure sustainable development.
... Beyond industry-level factors, national-level factors can also influence directors' contribution to the board resource dependence role and firm performance. Corporate governance studies increasingly support the idea that national institutions influence the relationship between firms' governance mechanisms and performance (e.g., Minichilli et al., 2012;Zattoni et al., 2017). ...
... Second, following previous studies, we used a wellestablished proxy variable (i.e., the presence of politicians in the board) to measure political connections. While this variable has been largely used as a proxy for political directors' influence on board roles and firm performance (e.g., Hillman, 2005;Hillman et al., 2000), some scholars underline that directors' demographic variables are unable to capture internal processes and interactions among board members (e.g., Minichilli et al., 2012). Future studies could adopt qualitative methods-for example, comparative cases, interviews with directors and participant observation-to gain a deeper understanding of how political directors influence board roles and how their behaviour is influenced by contingency factors (e.g., McNulty et al., 2013;Schonning et al., 2019). ...
The existing empirical evidence on the political directors' impact on company performance is mixed and inconclusive, suggesting that this relationship is more complex than initially hypothesised and requires further investigation. This study enhances our knowledge by exploring both political directors' direct effects and the role of moderating contextual variables. Precisely, building on resource dependence and contingency theory, we argue that political directors can positively affect company performance and that this relationship may be moderated by industry regulation and national financial systems. We tested our hypotheses using a longitudinal sample of large European listed companies. Our results highlight that political directors have a detrimental effect on firm performance, while industry regulation and credit‐based financial systems positively moderate this baseline relationship. As such, our findings expand the use of resource dependence theory and provide a more contextual understanding of the impact of political directors on firm performance.
... Payne et al. (2009) found that board effectiveness is significantly related to corporate financial performance. Minichilli et al. (2012) found that board processes, such as effort norms and the use of knowledge and skills to determine board control, help explain board task performance and board task performance differs between boards based on their operational contexts. Kouaib et al. (2020) found that a diversified board increases management's ability to make quality decisions and implement competitive strategies. ...
Agricultural cooperatives in the United States are larger and more complex than ever before. Due to this growth, farmer directors need to up-skill to maximize farmer member benefits. Director education is generally considered a successful strategy for improving financial and strategic performance, yet little research has examined the skills U.S. agricultural cooperative directors need. This research identified skills – and, notably, behaviors – necessary for agricultural cooperative directors to ensure financial and operational success. Interviews and focus groups were conducted with cooperative leaders. Results were consistent across these three groups and suggest that successful directors must possess the following skills and behaviors: financial/business, governance, board leadership, industry knowledge and strategic planning. Results suggest that educating farmer directors on these skills and behaviors may benefit all farmer members of an agricultural cooperative.
... Adopting an over-socialized theoretical perspective and building on institutional theory, governance scholars started to develop theoretical models predicting how industry-or country-level variables could attenuate firm-level agency problems and, ultimately, positively impact on firm results. In this way, they aimed at understanding how the industry or the macro environment could directly address agency problems, neglecting (or at least underestimating) the role of firm-level governance mechanisms (e.g., Aguilera & Jackson, 2003;Minichilli et al., 2012). ...
At the beginning of the 20th century, the publication of The Modern Corporation and Private Property opened the debate about the potential negative consequences associated with ownership dispersion. Since then, governance scholars aimed at understanding which corporate governance mechanisms could help companies both to prevent the agency problems connected with managerial opportunism, and to improve the strategic decision-making at the top of the firm. These early studies were mostly (or almost only) focused on the corporate governance of widely held companies listed in Anglo-American countries, thus neglecting for a long time the investigation of governance issues and mechanisms in other geographical settings. In addition, the main objective of these studies was to identify universal best practices (like an independent board, the separation of the CEO and Chair positions, or the use of high-powered incentives) that could address the agency problems of large listed companies. An implicit assumption in this stream of research was that firm-level agency problems do not vary across industry and macro environments, i.e., industry- and macro-environmental variables cannot either aggravate or attenuate agency problems.
This long-standing tradition has been increasingly criticized by scholars arguing that industry- or macro-environmental variables could directly (or indirectly through their influence on governance mechanisms) affect corporate governance problems. Based on this idea, they started to develop sound theoretical models and to adopt rigorous empirical research methods in order to investigate if and how the characteristics of industry and macro environments could address firm-level agency problems. A first stream of studies argued and empirically analyzed whether some industry conditions (e.g., high competitiveness) could attenuate managerial discretion and, thus, partly solve firm-level agency problems. A second stream of research argued and empirically tested whether, instead, the high quality of the macro environment (e.g., the national or supranational level of investor protection, transparency, or rules enforcement) could directly address corporate governance problems, with beneficial effects on firm performance.
More recently, scholars started to develop a multilevel investigation of corporate governance problems and mechanisms by including firm-, industry- and macro-environmental variables in their theoretical frameworks. In particular, through building new theoretical frameworks (e.g., based on the resource dependence or the institutional theory) and profiting from the development of new statistical techniques (like the multilevel statistical analysis or the fuzzy-set qualitative comparative analysis), scholars increasingly explored if and how the interaction among firm-level governance mechanisms and industry- and/or macro-environmental variables could address agency problems and produce positive consequences on firm long-term results. This new research stream suggests that the industry and macro environments affect the effectiveness of governance mechanisms and processes, and so represents boundary conditions that limit the generalizability of our research findings outside a specific context. In this way, they invite governance scholars either to contextualize their theories and results about firm-level governance mechanisms within a specific industry and macro context, or to explore the potential influence of one or more contextual variables (e.g., at the industry, country, or supranational level). Thanks to the results of this new stream of research, scholars and practitioners have been able to develop a richer and more contextual understanding of both (a) the relationships among corporate governance mechanisms and industry- and/or macro-environmental conditions, and (b) their direct and indirect impact on various company results.
... Forbes and Milliken (1999) suggested that board processes entail efforts norms, cognitive conflicts, and the use of skills and knowledge that are more likely to affect the ability of the SACCOS board to perform their functions. Different previous studies have examined the boards' processes on their role performance, but these studies have mainly been limited to the evaluation of a few firms from developed countries, such as manufacturing firms (Minichilli et al., 2012;Zona & Zattoni, 2007), listed firms (Bailey & Peck, 2011;Farquhar, 2011;Jansen, 2021;Mande, 2013;Pastra, 2017), and secondary schools (Heemskerk et al., 2015). Consequently, none has explored these aspects in the SACCOS context and more so in emerging countries such as Tanzania. ...
... Additionally, findings from previous studies were unclear and inconsistent because of varying behavioural determinants of board members depending on the nature of the firm under examination. For instance, the influence of cognitive conflicts on the board's role performance have been often nonsignificant (Jansen, 2021), negative (Minichilli et al., 2012) or even positive (Heemskerk et al., 2015). Consequently, the results cannot be generalised to SACCOS, given their cooperative nature as a members-based non-profit financial institution that abides by cooperative principles (Favalli et al., 2020;Zivkovic, 2015). ...
... Meanwhile, the active participation of board members in discussions and during meetings facilitates strategic and resource provision roles (Puyvelde et al., 2018). Also, evidence from empirical studies supports the view that the higher efforts norms on the board significantly raise contributions to strategic settings, resource provision, and monitoring of management (Minichilli et al., 2012;Zattoni et al., 2015). Studies also indicate that the time and preparation board members devote to their boards considerably differ among firms (Zattoni et al., 2015). ...
This paper examines the effect of board processes on efforts norms, cognitive conflict, and use of skills and knowledge on the board’s performance in monitoring, resource provision and strategic roles in SACCOS in Tanzania. The social exchange theory provided theoretical guidance. A cross-sectional design with a mixed-methods approach was used. Data were collected using a questionnaire administered to 198 board chairpersons and an interview with nine key informants from SACCOS managers and cooperative officers. Data were analysed through multiple linear regression and thematic analysis. The results revealed a strong and significant relationship between effort norms and board roles' performance in monitoring, resource provision, and strategic roles. The results further indicated a positive and significant relationship between the application of skills and the knowledge of board members, coupled with their ability to monitor and provide the board with essential resources. The results further revealed that cognitive conflict negatively influenced board members' ability to play strategic roles. Moreover, no significant relationship was found out between cognitive conflict and board roles in monitoring or resource provision. Effort norms and the Use of board members' skills and knowledge significantly predicted board role performance. Therefore, the study recommends that the board chairperson encourage a participatory culture to ensure that board members exert enough effort into and apply their skills and knowledge in fulfilling their roles. Furthermore[1], SACCOS members should elect board members based on their skills, knowledge, and ability to work and collaborate constructively and respectfully with other members
... Using the framework of Minichilli et al. (2012), we contribute to the literature by analysing whether the component of females on a BoD is relevant, and the effect of a mandatory gender quota introduced in Italy by the 2011 Gender Equality Law. We test the regulative institution pillar to investigate whether the staggered mandatory introduction of a gender quota meets the regulatory goal. ...
... Our analysis is based on the integrated model of board effectiveness (Minichilli et al., 2012), where the three determinants of board task performance are effort norms, cognitive conflicts, and skills and knowledge. Effort norms are a "group-level construct that refers to the group's shared beliefs regarding the level of effort each individual is expected to put toward a task" (Forbes and Milliken, 1999). ...
... Gender-centred perspectives, sex-specific models and gender-specific concepts of social construction show differences between men and women (Davis et al., 2006;Harding, 2003). We connect these differences to the three pillars of the integrated model of board effectiveness (Minichilli et al., 2012). ...
Purpose
This study aims to test whether the introduction of a gender quota impacts functioning of boards of directors and internal committees thanks to female capacity in effort norms, cognitive conflicts and use of skills.
Design/methodology/approach
This paper uses a difference-in-differences method to trace the staggered mandatory adoption of gender quotas on boards on Italian listed firms, representing the regulative institution pillar of institutional theory.
Findings
This paper find that mandatory adopter firms have more frequent internal committee meetings and less frequent board of directors’ meetings after the introduction of the law. This confirms that the regulation re-prioritizes work in internal committees, thanks to women effort, capacity to resolution and use of skills.
Originality/value
This research provides empirical evidence on female contribution and on the impact that a specific mandatory regulation, as regulative institutional pillar, can have on board organization, showing how gender characteristics influence board functioning in terms of meetings.
... Second, due to the 'informal, loosely structured, and fluid' nature of hightech start-ups (Picken, 2017, p. 588), coupled with the uncertainty of their survival, boards are more empowered and active, with higher stakes than boards in large firms (Hambrick & Abrahamson, 1995). Thus, boards' relational dynamics and behavioral exchanges have greater influences on organizational design (Garg & Eisenhardt, 2017), value creation (Bjørnåli, 2016), and strategy decision-making (Minichilli et al., 2012). Third, proponents of the behavioral approach argue that concentrating on board composition has led to less interesting, inconsistent, and ambiguous results, highlighting the need to focus on board process mechanisms to produce promising results (Hambrick et al., 2008;Huse & Zattoni, 2008;Leblanc & Schwartz, 2007). ...
The board of directors’ behavioral dynamics can strongly influence an entrepreneurial firm’s success. Drawing on the behavioral theory of corporate governance, this study identifies and tests factors that facilitate behavioral integration in boards of high technology start-ups. We unpack the black box of board behavior with primary data collected from a survey-based sample of 149 CEOs of Norwegian high-tech start-ups supplemented by quantitative archival information. We find that intra-board behavioral integration (i.e., board members’ propensity to clearly understand one another’s issues and needs, actively solve, and share relevant information and resources) is positively affected by greater levels of informal communication between CEOs and board members. Next, we find that inter-board trust (i.e., board members interact with absolute integrity, tell the truth at meetings, trust one another, and keep mutual promises) mediates this relationship such that higher levels of inter-board trust result in greater concordance between information communication frequency and inter-board behavioral integration. We then examine the role of an efficacious board chair who motivates and uses each board member’s competence, formulates proposals for decisions and summarizes conclusions after board negotiation, and chairs board discussions without promoting their agenda, finding that efficacious board chair leadership moderates the relationship between informal communication frequency and intra-board trust. We discuss the implications of these findings for the theory and practice.
