An agency perspective on the board of directors and corporate entrepreneurship

Abstract

PurposeThe purpose of this study is to examine the relationship between board dependence, antitakeover provisions and their influence on corporate entrepreneurship (CE).Design/methodology/approachThe study uses agency theory as a framework to expand on the board dependence–CE relationship by injecting the moderating role of antitakeover provisions to the model. Using data collected from 350 publicly traded firms, a panel regression analyses was conducted on both innovation and venturing components of CE.FindingsThe findings of this study show a negative relationship between board dependence and CE. Further this study shows that such a negative relationship becomes weaker when higher levels of antitakeover provisions are injected into the model.Research limitations/implicationsThis study was conducted using a sample of large publicly traded firms within the information and manufacturing sectors, and so our findings may not be generalizable to firms in other contexts. Further, other variables representing CE (e.g. new product introductions) may add to this line of research in the future.Practical implicationsUnderstanding the role of board of directors within a firm may help foster CE throughout the organization.Originality/valueThis study expands on existing research by incorporating the influence of environmental factors (e.g. antitakeover provisions) and examining the relationship between corporate governance and CE using both measures of innovation and venturing.