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“Outside” directors in SME boards: a call for theoretical reflections

Gabrielsson, Jonas LU and Huse, Morten (2005) In Corporate Board: Roles, Duties & Composition 1(1). p.28-37
Abstract
Good governance for SMEs is critical for economic development and growth in both developed and developing economies. In this paper we focus on boards and governance in small and medium sized enterprises (SMEs) by investigating the role and contribution of “outside” directors in this setting. By contrasting board role theories against different types of SMEs, firms are expected to recruit “outside” board members for various reasons. Illustrated by 53 empirical studies of “outside” directors in SMEs we show how agency theory, resource based view of the firm, and resource dependence theory can be applied to understand the multiple roles of “outside” directors in family firms, venture capital-backed firms and other SMEs. The illustration shows... (More)
Good governance for SMEs is critical for economic development and growth in both developed and developing economies. In this paper we focus on boards and governance in small and medium sized enterprises (SMEs) by investigating the role and contribution of “outside” directors in this setting. By contrasting board role theories against different types of SMEs, firms are expected to recruit “outside” board members for various reasons. Illustrated by 53 empirical studies of “outside” directors in SMEs we show how agency theory, resource based view of the firm, and resource dependence theory can be applied to understand the multiple roles of “outside” directors in family firms, venture capital-backed firms and other SMEs. The illustration shows that the concept “outside” director is not the same in different theories and in different empirical settings. Based on this finding, we argue for the need to have a conscious and balanced use of theories when understanding the role and contribution of “outside” directors in SMEs. (Less)
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author
organization
publishing date
type
Contribution to journal
publication status
published
subject
keywords
family firms, outside directors, Boards of directors, SMEs, venture capital
in
Corporate Board: Roles, Duties & Composition
volume
1
issue
1
pages
28 - 37
publisher
Virtus Interpress
external identifiers
  • Scopus:33748788912
language
English
LU publication?
yes
id
c457068f-6b2b-4f3c-9a01-188c60584d2f (old id 939805)
date added to LUP
2008-01-30 10:16:45
date last changed
2016-12-04 04:45:36
@misc{c457068f-6b2b-4f3c-9a01-188c60584d2f,
  abstract     = {Good governance for SMEs is critical for economic development and growth in both developed and developing economies. In this paper we focus on boards and governance in small and medium sized enterprises (SMEs) by investigating the role and contribution of “outside” directors in this setting. By contrasting board role theories against different types of SMEs, firms are expected to recruit “outside” board members for various reasons. Illustrated by 53 empirical studies of “outside” directors in SMEs we show how agency theory, resource based view of the firm, and resource dependence theory can be applied to understand the multiple roles of “outside” directors in family firms, venture capital-backed firms and other SMEs. The illustration shows that the concept “outside” director is not the same in different theories and in different empirical settings. Based on this finding, we argue for the need to have a conscious and balanced use of theories when understanding the role and contribution of “outside” directors in SMEs.},
  author       = {Gabrielsson, Jonas and Huse, Morten},
  keyword      = {family firms,outside directors,Boards of directors,SMEs,venture capital},
  language     = {eng},
  number       = {1},
  pages        = {28--37},
  publisher    = {ARRAY(0x6d5b900)},
  series       = {Corporate Board: Roles, Duties & Composition},
  title        = {“Outside” directors in SME boards: a call for theoretical reflections},
  volume       = {1},
  year         = {2005},
}