Boards of Directors' Contribution to Strategy: A Literature Review and Research Agenda

Abstract

Manuscript Type: Review Research Question/Issue: Over the last four decades, research on the relationship between boards of directors and strategy has proliferated. Yet to date there is little theoretical and empirical agreement regarding the question of how boards of directors contribute to strategy. This review assesses the extant literature by highlighting emerging trends and identifying several avenues for future research. Research Findings/Results: Using a content-analysis of 150 articles published in 23 management journals up to 2007, we describe and analyze how research on boards of directors and strategy has evolved over time. We illustrate how topics, theories, settings, and sources of data interact and influence insights about board-strategy relationships during three specific periods. Theoretical Implications: Our study illustrates that research on boards of directors and strategy evolved from normative and structural approaches to behavioral and cognitive approaches. Our results encourage future studies to examine the impact of institutional and context-specific factors on the (expected) contribution of boards to strategy, and to apply alternative methods to fully capture the impact of board processes and dynamics on strategy making. Practical Implications: The increasing interest in boards of directors' contribution to strategy echoes a movement towards more strategic involvement of boards of directors. However, best governance practices and the emphasis on board independence and control may hinder the board contribution to the strategic decision making. Our study invites investors and policy-makers to consider the requirements for an effective strategic task when they nominate board members and develop new regulations.

Entrepreneurial orientation and firm performance in family SMEs: the moderating effects of family, women, and strategic involvement in the board of directors

“…The literature on the role of boards of directors depicts boards as a source of competitiveness and an essential contributor to firm value creation (Pugliese et al 2009). Following the RBV approach, many studies acknowledge that boards can improve a firm's performance through the capabilities and resources directors offer, with the potential to provide competitive advantages for family firms (Bammens et al 2011;Sirmon and Hitt 2003).…”

Decision-Making Process in Japanese Board Room. Audit & Supervisory Board as a Source of Information to Outside Board Members: A Systematic Review

“…And also thematic results, based on evidence per concepts mentioned: Board of Directors, outside directors, CEO, type of auditors, regulatory act, type of reform, corporate governance mechanism, process and their derivatives (e.g., Pugliese et al, 2009;Boivie, Bednar, Aguilera, & Andrus, 2016;Khanna, Jones, & Boivie, 2014). …”

“…Finally, we made a descriptive analysis -short explanation of the data as numbers and percentageauthor/year; type of material -article/book; methodology; country; concepts mentioned; and their derivatives (Pugliese et al, 2009). And also thematic results, based on evidence per concepts mentioned: Board of Directors, outside directors, CEO, type of auditors, regulatory act, type of reform, corporate governance mechanism, process and their derivatives (e.g., Pugliese et al, 2009;Boivie, Bednar, Aguilera, & Andrus, 2016;Khanna, Jones, & Boivie, 2014).…”

“…Following previous reviews (e.g., Tranfield et al, 2003;Pugliese, Bezemer, Zattoni, Huse, Van der Bosch, & Volberda, 2009;Cuomo, Mallin, & Zattoni, 2016), we performed content analysis with criteria for codifying in two stages: (1) author/year; type of material -article, book, book chapter; methodology; country; concepts mentioned in connection to our topic; topic; and (2) for the concepts themselves, we identified additionally the number and percentage spread among the sources. The procedure we followed consisted of preliminary stage, in which two coders initially developed and tested the coding scheme on a sample of six articles.…”

Internal corporate governance mechanisms and audit quality: Evidence from GCC region

“…Thus, the findings of the previous studies might not be applicable in the context of the GCC, which is a dissimilar setting in terms of audit market, institutional framework, level of regulatory enforcement, and culture. In this regard, DeFond and Francis (2005) called for research on auditor choice outside the U.S. Pugliese et al (2009) emphasized the development of a broader view of corporate governance that accounts for the different national institutions in which corporate governance practices are embedded. In light of these deficiencies, auditor change issues seem to require further empirical investigation.…”