Boards of Directors and State-Owned Enterprises’ Innovation

Abstract

In the wake of the global financial crisis of 2008–2009, many industrialized States have increased their stakes in corporations (State-owned enterprises) worldwide. Therefore, the idea of governments as value-creating institution is increasing and questions concerning innovation are even more pressing. Indeed, there has been a great deal of both scholarly and professional interest in innovation believing that it is essential to public sector effectiveness. Theoretical insights from the innovation literature, agency and resource-based theories are done seeking to add knowledge on the relationships between governance mechanisms and State-owned enterprises’ innovation. The analysis is on a sample of 88 Norwegian State-owned enterprises mainly operating in the service sector. The results show that some characteristics of the board of directors (e.g., composition, board working-style and board members’ knowledge and competences) significantly influence innovation types. Implications for theory and practice and future research directions are discussed.