Age Of Board Members Research Articles

The Role of Human Capital in Venture Capital

This paper analyzes the role venture capitalist human capital plays in the performance of their portfolio companies. Using information on the educational and work histories of the individual venture capitalists who take board seats with their portfolio companies, I examine the propensity for a portfolio company to exit, via IPO or acquisition, as a function of the characteristics of its VC board members. In doing so, I test several hypotheses about which VC board member human capital characteristics matter for investment performance. I find that VC board members with past executive management experience sit on the boards of companies more likely to exit, consistent with the hypothesis that VCs who have skill in management can help their companies grow. I also find that VC board members with past non-venture finance experience are on the boards of companies more likely to exit when these companies are later stage and buyout deals. This is consistent with financial expertise being needed in restructuring and obtaining more capital for older and larger firms. I also find that companies in certain specialized sectors, such as biotech, are more likely to exit when their VC board members have advanced degrees in sector-relevant fields, consistent with the hypothesis that specialized product knowledge helps a VC identify good investments and advise product development. The use of supply-side instrumental variables for VC board member human capital supports a causal, or value-added, interpretation of the impact of VC executive management experience, finance experience and specialized knowledge on portfolio company performance. Finally, I examine the relation between VC board member age and company performance and birth year and company performance. I find that VCs who graduated from college in a recession sit on the boards of companies more likely to exit. This result is consistent with the negative career consequences of starting work in a downturn and evidence of a reverse adverse selection effect of starting a career in a downturn.

Commitment, Involvement and Performance of Voluntary Sport Organization Board Members

This paper explores the relationships between board member commitment, involvement and perceived performance within voluntary sport organizations. The paper specifically examines these relationships within the context of country race clubs in Victoria, Australia. After controlling for the effects of board-member age, it was found that commitment and involvement accounted for 31% of the variance in perceived board member performance. Affective commitment was found to be the most significant predictor of perceived board member performance, followed by tenure and the number of hours individuals devote to their board member role. These findings further extend our understanding of the drivers of individual board member performance within voluntary sport organizations.

Determinants of CEO Age at Succession

Based on Brickley’s (2003) call for research on the CEO/turnover relation, we examine determinants of CEO age at succession. Utilizing the similarity–attraction paradigm, we propose that board members will select new CEOs that are similar to their own age. We find a strong positive relation between successor CEO age and average board member age. Thus, the similarity–attraction paradigm seems to play a role in board of director selection of CEO successors. However, we also propose that poor prior performance may mitigate similarity–attraction. Our results are also consistent with this hypothesis because we find no relation between successor CEO and board age following poor prior performance. Finally, the hiring of an age-similar CEO does not reduce the companies’ subsequent financial performance and may even have a slightly positive impact on it.

The relationship of board member diversity to organizational performance

Wider diversity in board member characteristics has been advocated as a means of improving organizational performance by providing boards with new insights and perspectives. With data from 240 YMCA organizations, a board diversity index was constructed and compared to multiple measures of board member diversity. Results revealed higher levels of social performance and fundraising results when board members had greater occupational diversity. Gender diversity compared favorably to the organization's level of social performance but a negative association surfaced for level of funds raised. The diversity in board member age groupings was linked to higher levels of donations.