Board background heterogeneity and exploration-exploitation: the role of the institutionally adopted board model

Mariano L. M. Heyden, Jana Oehmichen, Sven Nichting, Henk W. Volberda

Research output: Contribution to journalArticleResearchpeer-review

31 Citations (Scopus)

Abstract

Boards of directors are in a position to contribute vital knowledge resources to strategy-making. We propose that the relation between board functional background heterogeneity and exploration-focused versus exploitation-focused strategy is contingent on the extent to which the institutionally adopted board model enables or constrains inclusion of the board's knowledge resources in strategy-making. We empirically juxtapose the Anglo-Saxon ('one-tier') and Rhineland ('two-tier') board models in the U.K. and Germany, respectively, and find support for our assertion that the influence of board functional background heterogeneity on relative exploration orientation is more pronounced when the adopted board model accommodates inclusion of the board's knowledge resources into strategy-making. Implications for theory and practice are discussed.

Original languageEnglish
Pages (from-to)154-176
Number of pages23
JournalGlobal Strategy Journal
Volume5
Issue number2
DOIs
Publication statusPublished - 1 May 2015
Externally publishedYes

Keywords

  • Board model
  • Boards of directors
  • Corporate governance
  • Cross-national
  • Exploration-exploitation
  • Organizational learning

Cite this