They Are Not All the Same! Investigating the Effect of Executive versus Non‐executive Family Board Members on Firm Performance. (1st November 2019)

• Record Type: Journal Article
• Authors: Basco, Rodrigo; Campopiano, Giovanna; Calabrò, Andrea; Kraus, Sascha
• Is Part Of: Journal of small business management. Volume 57(2019)Supplement 2
• Page Start: 637
• Page End: 657
• Publication Date: 2019-11-01
• Subjects: Small business -- Management -- Periodicals; 658.022
• DOI: 10.1111/jsbm.12535
• Languages: English
• ISSNs: 0047-2778

Abstract

Abstract: Drawing on faultlines and challenging the assumption that family board members form a homogenous subgroup, we hypothesize that the distinction between executive and non‐executive family board members can create faultlines that affect firm performance. We propose that the discrepancy between results and goals can activate and exacerbate faultlines. Using a sample of 421 family small and medium‐sized enterprises (SMEs), we find a U‐shaped relationship between the ratio of family executive board members and firm performance showing the consequences of relationship‐based and task‐related faultlines. Moreover, we find that the U‐shaped relationship occurs when firms perceive that they under‐achieve their objectives, whereas a reverse J‐shaped relationship appears when firms over‐achieve their objectives.