Boards and governance in small businesses: an integrated view on value creating board tasks
This paper defines and discusses corporate governance, boards of directors and value creation in the setting of small businesses. Corporate governance is defined as the relationship between internal stakeholders, the external stakeholders and the board of directors in determining the direction and performance of an enterprise. The board of directors, placed between the internal and external stakeholders of the organization, is identified as having a potential key role in value creation and contributing to the performance of small businesses. To identify value-creating board tasks four main theories in the field of corporate governance are reviewed. Sprung from diverse disciplines and academic traditions, the theories prescribe different ways in which boards create value - but the prescriptions are shown to be complementary rather than contradictory. The paper then integrates these theories, and links different board tasks to value creating activities in small businesses, such as the creation and identification of opportunities and the mobilizing of resources to pursuit these opportunities. The paper ends with a summary and conclusion, and presents some implications for research and practice.
- Economics and Business