Board Composition in International Joint Ventures

Abstract

A considerable literature on the composition of corporate boards has developed in recent years. However, relatively little attention has been paid to boards in international joint ventures (IJVs), and the composition of these boards in particular. To advance our knowledge in these areas, we combine the corporate governance and IJV literatures to examine the determinants of foreign partners’ representation on IJV boards. We hypothesize that a foreign partner’s representation on the IJV board is related to the equity distribution of the IJV. Furthermore, we argue that both environmental and behavioral uncertainty moderate the strength of this relationship, albeit in opposite ways. These results provide insights into the conditions under which a partner might wish to secure greater board representation for its level of equity, or utilize less board representation than might be suggested by its equity level alone.