Board Composition in Small and Medium‐Sized Family Firms*

This study focuses on the determinants of board composition in Belgian small and medium‐sized family firms. It extends the empirical literature on board composition in private small and medium‐sized family enterprises by integrating several dimensions of the “family component” in the research model. Furthermore, using a multinomial logit model, we examine in which circumstances family firms opt for (1) a family board, (2) an inside board, or (3) an outside board. Results suggest that family‐related contingency variables are far more important than CEO‐related or control variables, giving support to the argument that board composition in family firms is a reflection of the family characteristics and objectives. Moreover, the results suggest that a resource dependence and added value perspective explain more of the variation in board composition than agency considerations.