Abstract
There are key tensions between the two sides of a board's institutional role and function – of controlling and monitoring vs. that of resource gathering and strategizing. Drawing on a 38 month field study of eight new ventures in the UK high technology sector, we take a close look at the structural composition, knowledge base and behaviours of board directors in early stage high technology ventures. Our findings suggest that the early venture board, which typically consists of part-time members with diverse knowledge background, can be seen as an extension of the full time internal top management team. Together – as ‘collective entrepreneurs’ – they play a vital role in the venturing process, pointing to a collaborative model between inside senior executives and outside board directors that goes beyond the principal-agency model. We discuss the wider implications of our work for the field generally.
Highlights
The literature on boards and their contribution to firm strategy and firm development has traditionally focused on the larger public company with a diverse set of shareholders, and explored in detail how boards can act as monitors as well as builders of value
That the board does not take on this role, but instead gets involved in the business of running the firm is clear from our process analysis, i.e. the commitment of the board of directors to roles of providing managerial skills and expertise, fund raising and designing business model. This does not mean that the boards did not engage in monitoring activity in the same way that all senior managers are concerned with monitoring, rather we found that the board’s position was not one of “independence” and so “institutionally” their role was not that of being monitors
We examined early venture board’s structural composition, knowledge base and whether their behaviours are consistent with their functions
Summary
The literature on boards and their contribution to firm strategy and firm development has traditionally focused on the larger public company with a diverse set of shareholders, and explored in detail how boards can act as monitors as well as builders of value. We note that our focus of observation is the working board that includes some who are not legal board members at the time We term these individuals as “informal” board members---they are often present at board meetings and involved in the decision making process and they typically include: 1) past and prospective legal directors, i.e. some people may stay on board when they are no longer serve as legal board of directors, or they may start to participate in the venturing process before they become legal directors; 2) key professional advisors such as solicitor, accountant, scientist, financial PR, management consultant and etc, whose expertise are instrumental at certain stage of the venturing process; 3) board members from its company subsidiaries after they have gone public (PHY and ID); or from its holding company after it was acquired (AUV); 4) representatives of institutional shareholders such as representatives from government funding agencies and university as well as major individual shareholders, not necessarily appointed as legal board members. We stress that we make no claim that all UK high-technology firms have boards like those we studied, but we pay particular attention to the issue of structure and knowledge composition because we believe it does represent the practices of a group of firms that are interesting and have hitherto not been fully documented
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
