Boards of Directors and Entrepreneurial Posture in Medium-size Companies

Research suggests that a strong and vigilant board can have a significant influence on the value-creating potential of medium-size companies. Yet, how best to conceptualize this relationship remains controversial.The mainstream approach has been to argue for a direct relationship between board demography and company performance. In opposition stands a growing number of scholars who argue that boards' ability to perform board tasks effectively — their actual behaviour — should be taken into account. Empirical studies comparing the two approaches are however surprisingly scarce. Based on this observation, the aim of the study is to test the influence of boards of directors on CEOs' commitment to take an entrepreneurial posture. Both demographic and behavioural board measures are included in the model. Statistical analysis on a sample of 175 medium-size manufacturing companies gives ample support for the behavioural approach. The study ends with a discussion of the results and suggestions for further research.