Innovative boards: Exploring the curvilinear relationship of firm innovation with information diversity, dynamic capability diversity and governance diversity of the board of directors, and understanding the critical moderating effect of board size on this relationship

• Main Author: MAKHIJA, Ajay
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2020
• Subjects: Innovation; Diversity; Board of Directors; Dynamic Capability; Dynamic capability diversity; Information Diversity; Resource based View; RBV; Firm Innovation; Governance diversity; Board size; Heterogeneity; governance; demographic diversity; curvilinear relationship; board composition; Business Organizations Law; Strategic Management Policy; Technology and Innovation
• Online Access: https://ink.library.smu.edu.sg/etd_coll/310; https://ink.library.smu.edu.sg/cgi/viewcontent.cgi?article=1310&context=etd_coll
• Institution: Singapore Management University

The role and effectiveness of Board of directors in fostering innovation is an area of keen interest for both academics and professionals. Heterogeneity research suggests that diverse groups consider a broader range of perspectives and hence are able to foster creativity and drive innovation. The focus of most prior research on board diversity has largely been on gender, and the outcomes have been generally inconclusive. In addition, previous research efforts have focused on the RBV (Resource based view) in terms of the board role and also in explaining the diversity relationship with innovation. This study extends the diversity, governance and innovation literature , beyond generic gender diversity, and beyond the RBV view by examining the relationship of organizational innovation with newly introduced experience based diversity constructs like “Dynamic Capability Diversity” , “Information diversity”, and “Governance diversity” at the board level. The longitudinal study, used a sample of data consisting of 209 unique and global firms, spanning over an eight-year period, and the results demonstrate that the innovation outcomes of an organization have a curvilinear relationship with Dynamic capability diversity and Information diversity. The study results also indicate support for the “contingency view” by showing that the influence of the diversity elements is contingent upon the firm’s board size. This study also brings forth the importance of understanding the interactions between the different diversities. This study extends the understanding of the challenges around board composition, board diversity and board governance with respect to innovation as we discuss the implications for both practice and academic research.