A configurational perspective on the role of the quad model and context for board engagement

Abstract

Why are some boards of directors highly engaged in carrying out both their monitoring and service roles, while others are not? To examine this question, our study builds on Hambrick, Misangyi and Park’s (2015) theoretical quad model, which proposes that the likelihood of boards effectively fulfilling their monitoring duties depends upon directors having simultaneously four key attributes: independence, expertise in the area being monitored, eagerness, and bandwidth. Rather than just focus exclusively on a board’s monitoring role, we propose that the quad attributes will also affect the extent to which directors engage in their service role. We also, suggest that the saliency of the quad model for predicting the extent to which boards will be more likely to engage in their dual role will be greater if the four dimensions are considered from a configurational perspective. As such, consistent with the configurational perspective and the fsQCA technique, our findings show that the level of board engagement in our sample firms depends upon the overall configuration of quad model attributes and contextual elements. We show that there are multiple ways the quad board attributes bundle and combine with important elements of the context to lead to either high or low levels of board engagement. In contrast to previous research that has largely focused on how a particular board or contextual attribute has a net effect on governance outcomes, we show the importance of taking into account both equifinality and causal asymmetry.