When internal representation leads to faultlines : a study of board performance in social enterprises

Following the growing interest in sustainability and ethics, organizations are increasingly attentive to accountability toward stakeholders. Stakeholder representation, obtained by appointing board members representing different stakeholder groups, is suggested to be a good ethical practice. However, such representation may also have nefarious implications for board functioning. Particularly, it may result in strong faultline emergence, subsequently mitigating board performance. Our study aims at understanding the process through which faultlines affect board performance, and particularly the board service role through which the board is involved in providing counsel and strategic decision-making. We study the relationship between faultlines and board service performance in the particularly relevant context of social enterprises. We find that faultline strength is negatively related to board service performance and that this relationship is mediated by board task conflict. Furthermore, our study reveals the importance of clear and shared organizational goals in attenuating the negative effects of faultlines

Stakeholder knowledge and behavioral integration in boards of social enterprises : a team production approach

The social entrepreneurship literature increasingly acknowledges that the board of directors is of major importance in dealing with the specific tensions that social enterprises face. Using a team production perspective, we argue that the extent to which board members possess relevant knowledge about stakeholder groups, enhances the engagement of the board in counseling and decision-making (i.e. board service performance). Furthermore, we expect that such engagement is positively related to organizational performance, which is multifaceted, in line with the hybrid nature of social enterprises. Finally, we investigate the contingency factors under which board stakeholder knowledge relates to board service performance and subsequent organizational performance. Particularly, we claim that such knowledge is especially relevant in cases of strong behavioral integration among board members. Using a sample of Flemish social enterprises, we find that board stakeholder knowledge is positively related to board service performance. This relationship is further moderated by strong board behavioral integration, which is strengthening the relationship in cases of high stakeholder knowledge, but has a mitigating effect in cases of low stakeholder knowledge. Finally, while board service performance is positively related to the social goal of hiring disadvantaged people, it is not significantly related to financial performance

Service tasks of board of directors : a literature review and research agenda in an era of new governance practices

In their seminal review article on board of directors, Johnson, Daily, and Ellstrand (1996) distinguished between the control, service, and resource dependence tasks of the board and called for a stronger focus on board service tasks. Following this call, service tasks of boards have been subject to increased scholarly attention, with new theoretical perspectives and methods introduced. This paper aims at presenting the current state of research on board service tasks, departing from, and building on, the contribution of Johnson and colleagues. In doing so, we employ an Input-Process-Output-Context framework and craft an agenda for how future research could accommodate new governance practices and progress the field. Our review is relevant and timely as studies on the subject are gaining traction both in corporate governance and general management journals. Furthermore, our review on board service tasks proposes new alternative approaches to studying corporate governance which are especially appropriate in times in which a rethink of corporate governance frameworks and concepts is urgently needed

The relationship between top management team – outside board conflict and outside board service involvement in high-tech start-ups

Corporate governance research has extensively studied the relationship between outside board characteristics and outside board involvement. We add to this literature by investigating the extent to which interactions between outside board members and the top management team (TMT) affect the functioning of the outside board. Building on conflict theory, our study shows how conflict between TMT and outside board is an important antecedent for outside board service involvement. Specifically, drawing from a hand-collected dataset of 70 high-tech start-ups in Belgium, we find that TMT – outside board task conflict is both directly and indirectly, i.e. through TMT – outside board relationship conflict, related to outside board service involvement