Purpose This paper examines the association between corporate life cycle and board diligence and investigates how institutional forces (i.e. political instability, market pressure, economic development, and legal regimes) moderate this relationship. Design/methodology/approach Using a sample of 36,897 firm-year observations from 53 countries over the period 2002–2021, we run country-industry-year fixed-effect regression. We also address the endogeneity concern by executing the control function approach, IV Poisson-GMM, and lagged specifications. Findings We find that the corporate life cycle has a negative association with the number of board meetings held. This negative association is more pronounced in firms operating in countries with high political instability and less likely in firms facing greater external market discipline. However, the corporate life cycle has a positive association with board attendance, which is more pronounced during periods of high political instability and less likely in firms operating in a highly competitive environment. Lastly, the association between corporate life cycle and board diligence remains the same across different economic development levels and legal regimes of countries where the firms are domiciled. Originality/value First, by investigating how institutional factors discipline board behaviour across different life cycle stages, the study seeks to shed light on the institutional conditions under which firms adapt their governance structures to external pressures. Second, while existing research has explored the relationship between the corporate life cycle and board dynamics, there is a need for more focused inquiry into how institutional environments moderate the association between the corporate life cycle and board diligence. Third, we distinguish between board meeting frequency and attendance as two board diligence metrics, proposing that the firm life cycle may not affect the two metrics equally.
Hamza et al. (Thu,) studied this question.