Journal
SCANDINAVIAN JOURNAL OF MANAGEMENT
Volume 33, Issue 1, Pages 36-49Publisher
ELSEVIER SCI LTD
DOI: 10.1016/j.scaman.2017.01.001
Keywords
Boards of directors; Financial performance; Board tasks; Socioemotional wealth; Prospect theory; Behavioral agency model
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Boards of directors represent a central factor for firm success by performing different tasks such as control, networking, or advice. Stemming from socioemotional wealth (SEW) literature, the aim of this article is to investigate the board tasks-financial performance relationship, showing their different contributions in family and non-family firms when firm survival is at stake. The main hypotheses are tested through moderated linear regression analyses. The findings suggest that while advisory tasks generally enhance financial performance in family firms, especially during turmoil, networking and control tasks have a detrimental effect when these firms suffer internal financial crises. Hence, we contribute to the SEW paradigm by underlining that family firms seem to accept performance hazards in order to protect family discretion and a positive public reputation even when they suffer severe hardship. In contrast, board advice supports utilizing family firms' unique social capital and significantly bolsters financial performance, without disturbing the family and its SEW preservation needs. (C) 2017 Elsevier Ltd. All rights reserved.
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