Exploring how intellectual capital channels the effect of multiple directorships on firm performance

Purpose Drawing upon the absorptive capacity and dynamic capabilities framework, this study explores how multiple directorships shape firm performance through their influence on intellectual capital efficiency. Design/methodology/approach Based on a sample of 975 firm-year observations of Spanish listed companies over the period 2008–2020, and following previous literature, this study elucidates the role of multiple directorships in corporate governance. The analysis focuses not so much on multiple directorships as controllers but rather as coordinators, creators and disseminators of knowledge among agents by improving intellectual capital efficiency. Findings The impact of multiple directorships on firm performance is moderated partially by the efficient use of external intellectual capital resources in internal decision-making and management. Research limitations/implications The findings provide empirical support for the assumptions of the dynamic capabilities and absorptive capacity frameworks, confirming that enhancing intellectual capital efficiency is a key mechanism through which organizations leverage multiple directorships to improve performance outcomes. Practical implications Firms should develop processes and resources relating to human, structural and relational capital that enable them to capitalize on the knowledge, experience and networks of multiple directorships. Originality/value This study contributes to understanding how multiple directorships' abilities and capabilities to generate, assimilate and disseminate knowledge influence firm performance.