Board diversity and stakeholder management: the moderating impact of boards’ learning environment

Abstract

Purpose This paper aims to draw on insights from team learning theory and stakeholder theory to examine the influence of board composition on firms’ stakeholder management practices. The authors posit that board diversity is likely to enhance stakeholder management by shaping organizational goals by placing emphasis on the interests of a wide variety of stakeholders and providing firms with relevant knowledge to enhance their ability manage these interests. The authors further theorize on the moderating role of boards’ learning environment, which they conceptualized as an important complementary governance-related factor, likely to further boards’ ability to enhance stakeholder management. Design/methodology/approach The authors test these predictions using the generalized estimating equations (GEE) technique on a panel of S&P 500 firms observed from 2001 to 2011. Findings The findings provide evidence that more diverse boards in terms of gender, nationality and race/ethnicity are generally associated with more effective stakeholder management. Further, the findings also suggest that boards’ co-working experience moderates the relationship between gender and national diversity and stakeholder management. Originality/value While corporate governance research surveys many strategic implications of board composition, limited attention has been paid to the interplay of board characteristics with stakeholder management. This study is among the first to the authors’ knowledge to explore the impact of board diversity on stakeholder management using team learning research, thus drawing attention to the role of boards’ co-working experience in shaping their ability to impact firms’ outcomes.

Gestão de organizações contábeis brasileiras: uma investigação entre a adoção dos princípios da governança corporativa e a aprendizagem organizacional

“…A partir dessas pesquisas empíricas, de modo geral, um dos achados evidência a associação entre governança corporativa e aprendizagem organizacional (Kearney & Kruger, 2013), em outros estudos, a associação direta entre esses constructos não foram analisadas, mas sim em relação a outros aspectos, como a diversidade do conselho e o planejamento estratégico (Fernandez & Thams, 2018;Abadi & Nematizadeh, 2012 assimetria e sete para curtose (Marôco, 2003), o valor da Assimetria (SK) foi de -0,317 para a governança corporativa e de -1,930 para a aprendizagem organizacional, o valor da Curtose (Ku) foi de -0,337 (platicúrtica) para a governança corporativa e de 5,656 (leptocúrtica) para a aprendizagem organizacional.…”

Organizational learning in stakeholder relations

“…However, not just management is engaged in stakeholder relations. Fernandez and Thams (2019) discussed the role of board directors in successful stakeholder management. Due to an increasingly complex business landscape, the role of the board of directors is no longer limited to monitoring the corporate performance but expands to the field of strategic management.…”

“…However, there is a missing link between board diversity and stakeholder management and that is the process of learning, which connects members of the board and drives them to reach a certain outcome relative to stakeholder-based strategic management. In their paper, Fernandez and Thams (2019) put emphasis on the board's learning TLO 26,2 environment as a complementary factor to successful governance (Aguilera et al, 2008). To result in a favorable stakeholder strategic management which could be suggested to management, board learning environment should foster different perspectives of perception, learning, knowledge sharing and its implementation in decision-making.…”

“…Following the assumption that board diversity could stimulate learning diversity, which could subsequently lead to effective strategic stakeholder management, Fernandez and Thams (2019) examined the following characteristics of board membersnational origin, gender, race and ethnicity. It is well known that different countries have different characteristics relative to Hofstede's model of cultural dimensions.…”

The Effect of the Board of Directors’ Characteristics on Company Value

“…Meanwhile, limited attention of researchers explore the effect of board of directors in Continental European system (e.g., Melmusi, Ilona, Elfiswandi, and Kurniawan, 2019). Board of directors produces a crucial information for practices, strategies, and other decision-making in order to solve the company's problems (Fernandez and Thams, 2018) as the backbone for better corporate governance (Bozec and Dia, 2017) and important part of internal mechanism, when external mechanism is not effective (Kamardin and Haron, 2011). The current study contributes to the literature in term of theoretical and practical area.…”