One composition fits all?: Board Composition under Different Types of Environmental Uncertainty

In this study, we explore the effect of environmental uncertainty on board composition, by particularly identifying its link to strategy formulation. First, we examine resource dependence theory as it applies to board composition to reduce environmental uncertainty associated with strategic decision...

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Bibliographic Details
Published inInternational OFEL Conference on Governance, Management and Entrepreneurship p. 136
Main Author Kanadli, Sadi Bogaç
Format Conference Proceeding
LanguageEnglish
Published Zagreb Centar za istrazivanje i razvoj upravljanja d.o.o 01.04.2014
Subjects
Agency theory
Boards of directors
Collaboration
Decision making
Directors
Hypotheses
International organizations
Management decisions
Open systems
Roles
Stockholders
Studies
Success
Taxonomy
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Summary:In this study, we explore the effect of environmental uncertainty on board composition, by particularly identifying its link to strategy formulation. First, we examine resource dependence theory as it applies to board composition to reduce environmental uncertainty associated with strategic decisions. Then, following Zahra and Pearce and Hillman et al. calls, we adopt a detailed specification of environmental uncertainty and a richer taxonomy of mix of director types and derive propositions for future research. Finally, we generalize the insights gained through exploring the effects of different types of uncertainty on board composition and call for a reevaluation of the conventional wisdom that requires effective boards to be comprised of greater proportions of outside directors.