Once a Founder, Always a Founder? The Role of External Former Founders in Corporate Boards

Abstract

Public corporations often appoint external former founders to their boards in hope that they will encourage a (re-)focus on creating future new business. Seeking to investigate this common practice, we integrate upper echelons theory with imprinting theory, arguing that founding a company indeed represents a formative experience that will leave an imprint on founders and their subsequent board decision-making. Subsequent to their founding experience, however, some founders may be subjected to likewise formative but public corporate experiences, for instance, by taking their own business public or by assuming CEO positions in other corporations, that will lead to a decay of the original founding imprint and its effect. We find support for our reasoning across corporate boards in S&P1500 firms ranging from 2000 to 2012.

The effect of CEO entrepreneurial passion on family firm entrepreneurial orientation: does generational stage matter?

“…From an upper echelon perspective, CEOs can influence firm-level outcomes as they belong to the dominant coalition of the firm (Hambrick and Mason, 1984). Additionally, the argument from imprinting theory explains that founding conditions have a lasting and persistent impact (Baron et al, 1996;Erdogan et al, 2020;Terbeck et al, 2022). Using these two theoretical perspectives simultaneously, we tested the effects of entrepreneurially passionate family CEOs on the EO of the family firm.…”

“…Leung et al. , 2013; Terbeck et al. , 2022) and we apply this to the EP domain to obtain a richer understanding of how entrepreneurially passionate family CEOs can influence the EO of the family firm.…”

“…The basic elements of both theories have already been integrated into previous research (e.g. Leung et al, 2013;Terbeck et al, 2022) and we apply this to the EP domain to obtain a richer understanding of how entrepreneurially passionate family CEOs can influence the EO of the family firm. Additionally, we introduce the generational stage of the CEO as an essential contingency variable in the EP-EO relationship.…”

Building a resilient organization through a pre‐shock strategic emphasis on innovation

“…Following Buyl et al's (2019) finding that the riskiness of policies before the shock is an important antecedent to organizational resilience, we controlled for this risk using Eklund and Mannor's (2021) text‐based measure “financial and risk management strategies” and applied this measure to the firms' annual reports. We also controlled for the corporate‐governance‐related variables (Buyl et al, 2019) directors' average age and tenure , board size , and share of outsiders on the board (Terbeck et al, 2021).…”

Sadder but Wiser: The Role of SARS Imprinting and Firms’ Recovery During the COVID-19 Pandemic

“…Imprinting theory suggests that organizations or individuals go through a number of "sensitive periods" (Pieper et al, 2015) during their development, during which they focus on exhibiting a high degree of sensitivity to the external environment, allowing organizations or individuals to potentially develop imprinting characteristics with a particular environment. For individuals, what imprinting theory refers to as "sensitive periods" are not only the "early" experiences of individuals, but also periods that have shaped their worldview, values and outlook on life, or periods of individual role transitions, for example, the famine in China (Long et al, 2020), SARS experiences during childhood (Yao et al, 2021), Total Wealth Characteristics (Korkeamäki et al, 2018), social class (Kish-Gephart and Campbell, 2015), work experience (Terbeck et al, 2021), etc. can be referred to as sensitive periods (Kish-Gephart and Campbell, 2015;Mathias et al, 2015).…”