Board governance of Strategic Change: An assessment of the literature and avenues for future research

Abstract

Boards of directors play a central role in governing corporate strategic change. We systematically review corporate governance research on strategic change published over the past 40 years, differentiating between strategic change types and board characteristics. We identify three developments: a focus on specific strategic change types, board composition and structure, and North American listed firms as a dominant study context. Yet, our analysis of the literature shows that research on board governance of interrelated strategic changes, on different board roles and behaviour, and on the governance of strategic changes across different contexts remains underdeveloped. To address these research gaps, we suggest three future research avenues: (1) examining how boards govern interrelated changes in a strategic change portfolio and its evolution over time; (2) studying the mediating relationship between board governance (particularly different board roles and behaviour), strategic changes, and corresponding outcomes; and (3) gaining a better understanding of the role of context in board governance of interrelated strategic changes. We contribute to corporate governance research by developing a framework that synthesizes extant research on the relationships between different board governance variables and strategic change types, highlights important research gaps, and outlines several future research directions to address these gaps. Our framework and literature overview serve as analytical tools to examine whether boards are well‐designed and prepared to govern multiple and interrelated strategic changes.

Chief Executive Officer (CEO) and corporate environmental sustainability: A systematic literature review and avenues for future research

“…The use of SLR was motivated by the desire to ensure replicability and transparency in the review process (Fatima & Elbanna, 2023). The systematic process outlined by Tranfield et al (2003) and Klarner et al (2022) was followed during the SLR. To ensure that the scope of the search was clearly defined, only studies that focused on the concept of environmental sustainability, including firm's environmental performance and reporting, were included.…”

Determinants of firms' initiative and inertia in pursuing climate neutrality strategies—Theoretical explanations and empirical evidence

“…A significant reduction of GHG emissions beyond window‐dressing and green‐washing calls for fundamental changes in companies' strategies, organizational structures, and business processes. Previous research has analyzed various factors that hamper or foster strategic change in organizations at different levels of analysis at large (Helfat & Martin, 2015; Hoppmann et al, 2019; Klarner et al, 2023) or with regard to the adaptation to and mitigation of climate change (e.g., Gifford, 2011; IPCC‐WGIII., 2007). In light of this extensive body of work, Biesbroek, Klostermann, Termeer, and Kabat (2013, p. 1120) concluded: “An impressive number of barriers have been reported, but the list of possible barriers is seemingly endless.” In comparison to the wealth of scholarly work regarding the barriers to climate change adaptation, there are surprisingly only a few empirical studies devoted to the question to which extent firms—specifically small and medium‐sized enterprises (SMEs)—have recognized the urgency for substantially reducing their GHG emissions and—consequently—are pursuing CNS (e.g., Mobarakeh & Kienberger, 2022; Seyfried et al, 2023) and what factors cause inertia or activity in firms?…”

“…A significant reduction of GHG emissions beyond window-dressing and green-washing calls for fundamental changes in companies' strategies, organizational structures, and business processes. Previous research has analyzed various factors that hamper or foster strategic change in organizations at different levels of analysis at large (Helfat & Martin, 2015;Hoppmann et al, 2019;Klarner et al, 2023) or with regard to the adaptation to and mitigation of climate change (e.g., Gifford, 2011;IPCC-WGIII., 2007). In light of this extensive body of work, Biesbroek, Klostermann, Termeer, andKabat (2013, p. 1120) concluded: "An impressive number of barriers have been reported, but the list of possible barriers is seemingly endless."…”

Same owner, different impact: How responses to performance feedback differ across a private equity investor's portfolio firms

“…We show that the presence of a powerful, value-focused owner challenges some of the traditional predictions from the BTOF. For instance, firms have a portfolio of strategic options available (e.g., Kuusela et al, 2017) and scholars have called to better consider how firms prioritize specific strategic changes (Klarner et al, 2022). We add nuance to traditional expectations from the BTOF by unveiling that depending on whether a PE-backed firm performs above versus below aspirations, capital investments or acquisitions may be pushed for or against.…”