A Longitudinal Analysis of Board of Director Busyness and Firms’ Ambidextrous Orientation

Abstract

Although studies highlight the informational upside of a board’s connections to its external environment, we develop the idea of “busyness” as an important boundary condition in directors’ (in)ability to apply their external knowledge to assist a focal firm. We relate this notion to the extent to which strategy is characterized by an ambidextrous orientation, which research links positively to performance, yet is also a particularly complex strategic orientation that imposes greater information processing demands (i.e., knowledge exchange and integration) on directors. Our results from a longitudinal panel analysis of publicly listed UK firms provide novel and robust evidence that busy non-executives have a negative influence on the ambidextrous orientation of firms, whereas busy executive directors do not seem to exert an influence. We further find that busy women directors show an inverted U-shaped relation with ambidextrous orientation. We discuss implications for busy boards as a microfoundational antecedent of ambidextrous orientation, the hidden cost of high-quality boards, cascading influences of different types of directors on firms’ ambidextrous orientation, and managing the external workloads of different directors.