Toward a life cycle theory of board evolution: Considering firm legitimacy

Abstract

In this article, we build on recent attempts to theorize about the evolution of boards of directors by juxtaposing firms’ strategies to gain, maintain, and repair legitimacy onto their life cycle to examine how board characteristics change – both symbolically and substantively – to reflect their firm’s evolving legitimating strategy. In doing so, we develop insights contributing to our understanding of the mechanisms underpinning the evolving structure and composition of boards of directors. We suggest that boards fulfill an important role ingrained in the firm’s legitimacy in addition to, and intertwined with, their substantive contribution to the firm’s performance at each life cycle stage. We also address firms’ real ability to effect change in their board as a function of the factors that pertain to each stage of life cycle. We conclude by expounding the implications of this novel framework for future research and managerial practice.

SME growth trajectories, transitions and board role portfolios: A critical review and integrative model

“…However, the question of board value and contribution is more complex when considered in circumstances of dynamic change. Recent studies have attempted to address this question by researching board roles in conjunction with small firm growth paths and the changes experienced over the course of their existence (Bonn and Pettigrew, 2009;Filatotchev et al, 2006;Perrault and McHugh, 2015).Two key issues arise from this debate. The first issue relates to an almost exclusive use of life cycle models to match board roles with SME growth patterns (Bonn and Pettigrew, 2009;Lynall et al, 2003) and transitions accompanying growth (Filatotchev et al, 2006;Perrault and McHugh, 2015).…”

Evaluation of the Effect of Financial Factors on Shareholders’ Value of Listed Pharmaceutical Firms in Nigeria

“…The stakeholder model's underlying philosophy is a much broader, and an externally focused model, as it considers the interests of shareholders, employees, clients, suppliers, strategic partners, and other groups that have connections with the firm [28,29]. Some researchers have stated that the notion of considering the interests of all stakeholders may have been extended to an impracticable extent, and it is important for corporate managers and practitioners to know where to draw the line [30,31].…”

Determinants of the presence of CSR committees within european boards of directors

“…Studies on corporate governance such as those of Nelson, Zollinger, & Singh (2001), Tonello (2010), and Tonello et al (2011) stress the increasing role of the board of directors (BOD) in the strategic management of CSR. Moreover, board committees have a strategic role to play in achieving corporate legitimacy, accountability, transparency, and strategy formulation (Harrison, 1987;Cartwright & Craig, 2006;Brauer & Schmidt, 2008;Brennan & Solomon, 2008;Horner, 2011;Perrault & McHugh, 2015;Barroso-Castro et al, 2017;Fuentel et al, 2017). Hence, we argue that it is relevant to understand the positioning of the CSR agenda at a strategic level of decision-making.…”