Board tasks in small firms: The importance of motivation and evaluations

The attention to board of directors in small firms is increasing. Traditionally they have been considered to be passive and labeled paper boards or aunt boards. However, boards in small firms are now undergoing major changes. In this paper we test hypotheses of what makes boards active and allows them to contribute to value creation. Activity is seen in relation to board task involvement. Predictions based on agency theory, resource dependence theory and the resource based view of the firm are used to explore board task involvement. In a sample of 347 small firms we got strong support for hypotheses highlighting the use of the knowledge of the board members and various board maintenance tools, such as regular board evaluations, to increase board task involvement. Various contextual variables were included as control variables, but few were significantly related to board task involvement. Actionable advice to boards in small firms is provided

Board leadership and strategy involvement in small firms: a team production approach

"Research Question/Issue: Boards' involvement in strategy is generally seen to be an indicator of board effectiveness but less is known about the relationship between board leadership and strategy involvement, especially in small firms. This study analyses board leadership from a team production perspective as an antecedent to board strategy involvement in small firms. Research Findings/Insights: Using survey data from 140 small firms in Norway collected in two different time periods, we demonstrate that leadership behaviors and processes have a greater impact on boards' strategy involvement than structural leadership characteristics alone. Theoretical/ Academic Implications: The study provides empirical support for a team production perspective on boards. Our data show that: 1) board members' knowledge, board development and board chairperson leadership efficacy positively influence boards' strategy involvement, and 2) chairperson leadership efficacy enhances boards’ strategy involvement under structural conditions of combined CEO/ chairperson leadership and changes in board composition. These findings expand the traditional understanding of structural leadership conditions. Practitioner/ Policy Implications: The study offers insights to small business owners and managers on how to improve the strategy involvement of boards. For policy makers, the study has implications for the content of codes of good governance practice relevant to small firms, specifically in relation to board development initiatives and board evaluations." (author's abstract

Strings attached : socioemotional wealth mixed gambles in the cash management choices of family firms

Altres ajuts: Acord transformatiu CRUE-CSICFamily owners differ from other types of owners due to the presence of socioemotional wealth (SEW) concerns. We take a closer look at this distinctive aspect by examining the impact of family control and influence dimension of SEW on the cash management choices of family firms, conceptualizing it as a mixed gamble choice. Our empirical analysis of 195 Italian firms listed on the Milan Stock Exchange between 2003 and 2015 shows that family firms derive more value and incur lower costs than nonfamily firms when they increase their cash holdings. We then delve deeper into family firms' cash management choices by exploring how different levels of family control and influence as well as types of board governance arrangements moderate this relationship. The empirical results indicate that the positive effects of family ownership are more pronounced under a high level of family control and influence and with separation of the board chair and CEO positions

Family involvement and firms’ establishment mode choice in foreign markets

Extant literature on foreign entry increasingly recognizes firms’ heterogeneity as a potential reason for inconsistency in results on the establishment mode choice, i.e. whether and under which conditions firms should choose to enter a new country through a greenfield investment or an acquisition. Our study contributes to this debate by identifying family ownership and family involvement in management as potential powerful sources of such heterogeneity. Integrating international business studies with both corporate finance literature on family firms and recent contributions from the Socio Emotional Wealth perspective on family ownership, we claim that, due to greater risk aversion and lower access to information, the family involvement either in the firm ownership and management leads to a higher propensity towards greenfield initiatives (vs. acquisitions). However, we also find that such a propensity decreases with international experience especially in family-owned firms given the greater ability of professionalized management to overcome family-related concerns on making acquisitions. Our analysis on 1,045 foreign initiatives undertaken by 311 Italian family and non-family firms between 2003 and 2013 confirms our expectations – indicating family ownership as a significant driver of international business choices

Styreoppgaver i vekstbedrifter: Sammenlikning på tvers av livssyklusfaser

Nyere forskning på styrer og ledelse viser stadig større interesse for hvordan situasjonsbestemte variabler påvirker styrets sammensetning og atferd. I denne artikkelen ser vi nærmere på styreoppgaver i ulike faser av bedriftens livssyklus. Vi sammenlikner styreoppgaver i vekstbedrifter med styreoppgaver i andre faser av bedriftens livssyklus. Vi har valgt en inndeling i ulike livssyklusfaser basert på dimensjoner av organisasjoners kontekst og struktur, og ikke med utgangspunkt i størrelse og alder. I artikkelen trekker vi frem styrets involvering i oppgaver knyttet til rådgivning, kontroll og nettverksbygging. Resultatet av en undersøkelse blant 467 norske bedrifter viste at styrer er spesielt aktive i vekstbedrifter. I vekstfasen deltar de aktivt i så vel rådgivning og kontroll som nettverksbygging. Vi fant videre at rådgivningsoppgavene er spesielt viktig i etableringsfasen og kontroll i strukturutbyggingsfasen. I nyetablerte virksomheter engasjerer styret seg ofte i internt rettede oppgaver, og styremedlemmene ser behovet for å hjelpe den nyetablerte ledelsen. I senere faser av bedriftens utvikling er det tilsvarende vekt på eksternt rettede oppgaver (så som kontroll og nettverksbygging)

Proprietà, governo e direzione delle imprese

Gli studi di management, così come quelli di corporate governance, hanno spesso considerato l’assetto proprietario di un’impresa una “variabile esogena”, e per tale motivo scarsamente influente rispetto alle sue scelte strategiche e di governo. Partendo da questa considerazione, il libro intende ribaltare la prospettiva ponendo la proprietà al centro di tutte le scelte rilevanti che l’impresa compie. Nel fare ciò vengono definite alcune emblematiche combinazioni di proprietà x governance, estendendo tali considerazioni all’alta direzione (top management team), in ragione della centralità che questa assume rispetto alle scelte strategiche ed ai conseguenti risultati economico-finanziari. In base a queste premesse, la seconda parte del lavoro concentra l’attenzione sulle relazioni tra proprietà, governo, direzione e strategia corporate, per poi declinare tali riflessioni nei diversi tipi di impresa. Nello specifico, vengono analizzate le imprese quotate rispetto a quelle “private”, le imprese multinazionali, quelle a controllo statale, e soprattutto le imprese a controllo familiare. Il lavoro si conclude con una sintesi del percorso effettuato, analizzando l’influenza della proprietà e del governo su una delle scelte “chiave” di una moderna impresa capitalistica, ossia quella relativa alla sua responsabilità sociale

The Diffusion of Equity Incentive Plans in Italian Listed Companies: What is the Trigger?

Recent dynamics in the institutional and market environment have facilitated the propagation of equity incentive plans outside the US and the UK. This study sheds light on the reasons behind the diffusion of these plans in a country, Italy, where companies are usually controlled by a blockholder and where these instruments were almost absent until the end of the ‘90s. To gain a deep understanding of the phenomenon, we collected data and information on both the diffusion and the technical aspects of equity incentive plans adopted by Italian listed companies in 1999 and 2005. The results show that (i) the determinant of their adoption is the firm size rather than the absence of a controlling shareholder; (ii) these plans are not extensively used to extract company value, although few cases suggest this possibility; and (iii) plans’ characteristics generally comply with the requirements in tax law so that fiscal benefits can be accessed. Our findings contribute to expand the traditional knowledge on reasons behind the adoption of equity incentive plans outside Anglo-Saxon countries, and support a symbolic perspective of corporate governance, according to which the introduction of new governance practices may not imply substantive governance reforms. Practitioner/Policy implications: Our study recommends policymakers to improve the disclosure rules about these plans and to avoid the introduction of fiscal benefits that incentive the diffusion of some compensation schemes respect to others. Moreover, our results encourage members of remuneration committees to pay attention to the specific characteristics of the plans they design