The Effect of Board Capital and Conflict on the Tasks of the Board of Directors

Abstract

This study analyzes the effect of directors’ human and external social capital on the monitoring and resource provision tasks of the board. Furthermore, this study examines the moderating effect of cognitive and affective conflicts among the directors on these relationships. Based on a sample of 92 cases, we find that the human and external social capital of the directors is positively associated with board’s monitoring and resource provision tasks. The results suggest that cognitive conflict positively moderates the relationship between directors’ external social capital with the monitoring and negatively with the resource provision tasks. Affective conflict was found to moderate the relationship between directors’ external social capital and the resource provision tasks negatively, and positively moderate the relationship between directors’ human capital and resource provision tasks. This study suggests that the behavioral perspective, which takes into account the dynamics and interaction in the board, has considerable predictive power.

Additional information

Notes on contributors

Dmitri Melkumov

Dmitri Melkumov is a researcher at Hanken School of Economics, Arkadiankatu 22, FIN-00100 Helsinki, Finland; tel.: [phone]; e-mail: [email protected].

Violetta Khoreva

Violetta Khoreva is an assistant professor at Hanken School of Economics, Biblioteksgatan 16, 65101 Vasa, Finland; tel.: [phone].