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Directors’ human capital, firm strategy, and firm performance

Author

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  • Christophe Volonté
  • Pascal Gantenbein

Abstract

Ideally, corporations are directed by boards whose directors provide valuable human capital that match the firms’ strategy. We investigate how directors’ human capital (international experience, industrial know-how, CEO experience, and financial know-how) affects firm performance including the firm’s strategy (diversification and internationalization) and how human capital is related to acquisition strategies (non-diversifying and international acquisitions). Our sample consists of 560 firm-year observations in Switzerland. We find empirical evidence that directors’ human capital affects firm performance and that this relationship depends on the firm’s strategy. Furthermore, human capital is also correlated with acquisition strategy. The study shows that focusing on board independence and compliance issues may be unrewarding in board research and practice. Copyright Springer Science+Business Media New York 2016

Suggested Citation

  • Christophe Volonté & Pascal Gantenbein, 2016. "Directors’ human capital, firm strategy, and firm performance," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 20(1), pages 115-145, March.
    • Handle: RePEc:kap:jmgtgv:v:20:y:2016:i:1:p:115-145
    DOI: 10.1007/s10997-014-9304-y
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    Citations

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    Cited by:

    1. Arshad ROSHAYANI & Mahamud MOHD HISHAM & Rahmat NUR EZAN & Muda RUHAINI & Nair RAMESH, 2018. "Desired Board Capabilities For Good Governance In Non-Profit Organizations," REVISTA ADMINISTRATIE SI MANAGEMENT PUBLIC, Faculty of Administration and Public Management, Academy of Economic Studies, Bucharest, Romania, vol. 2018(30), pages 127-140, June.
    2. Nurit Nahum & Abraham Carmeli, 2020. "Leadership style in a board of directors: implications of involvement in the strategic decision-making process," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 24(1), pages 199-227, March.
    3. Mariluz Fernández-Alles & Dara Hernández-Roque & Mercedes Villanueva-Flores & Mirta Díaz-Fernández, 2022. "The impact of human, social, and psychological capital on academic spin-off internationalization," Journal of International Entrepreneurship, Springer, vol. 20(3), pages 433-473, September.
    4. Ahmed Jinjiri Bala & Aminu Hassan & Muhammad Liman Muhammad, 2024. "Do board characteristics matter in the relationship between intellectual capital efficiency and firm value? Evidence from the Nigerian oil and gas downstream sector," Future Business Journal, Springer, vol. 10(1), pages 1-24, December.
    5. Thomas Bassetti & Lorenzo Dal Maso & Giovanni Liberatore & Francesco Mazzi, 2020. "A critical validation of the value added intellectual coefficient: use in empirical research and comparison with alternative measures of intellectual capital," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 24(4), pages 1115-1145, December.
    6. Emmadonata Carbone & Sara Saggese & Fabrizia Sarto, 2023. "La relazione tra l?esperienza degli amministratori e il business plan: un?indagine empirica sulle imprese quotate in Italia," MANAGEMENT CONTROL, FrancoAngeli Editore, vol. 2023(1), pages 69-94.
    7. Giuseppe Marzo, 2022. "A theoretical analysis of the value added intellectual coefficient (VAIC)," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 26(2), pages 551-577, June.
    8. Marcus Sidki & Lara Boerger & David Boll, 2024. "The effect of board members’ education and experience on the financial performance of German state-owned enterprises," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 28(2), pages 445-482, June.
    9. Fernando A. Tejerina-Gaite & Miguel A. Fernández-Temprano, 2021. "The influence of board experience on firm performance: does the director’s role matter?," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 25(3), pages 685-705, September.
    10. Bilal, & Komal, Bushra & Ezeani, Ernest & Usman, Muhammad & Kwabi, Frank & Ye, Chengang, 2023. "Do the educational profile, gender, and professional experience of audit committee financial experts improve financial reporting quality?," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 53(C).
    11. Stefan Schmid & Sebastian Baldermann, 2021. "CEOs’ International Work Experience and Compensation," Management International Review, Springer, vol. 61(3), pages 313-364, June.

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