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Beyond the Disciplinary Role of Governance: How Boards Add Value to Spanish Foundations
Author(s) -
De AndrésAlonso Pablo,
AzofraPalenzuela Valentín,
RomeroMerino M. Elena
Publication year - 2010
Publication title -
british journal of management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.407
H-Index - 108
eISSN - 1467-8551
pISSN - 1045-3172
DOI - 10.1111/j.1467-8551.2009.00645.x
Subject(s) - corporate governance , resource dependence theory , stewardship theory , cognitive dimensions of notations , principal–agent problem , discipline , dimension (graph theory) , business , positive economics , cognition , industrial organization , public relations , accounting , sociology , economics , political science , microeconomics , psychology , social science , finance , mathematics , neuroscience , pure mathematics
Due to the significant role of non‐profit organizations in the development of modern societies, these organizations must adjust their boardrooms. Since traditional theories of corporate governance appear to be limited in explaining the changing non‐profit world, we propose an extended model of governance that integrates the traditional arguments of agency theory with a cognitive dimension. Based on a sample of Spanish foundations, we present evidence on the effect of the board composition on foundations' organizational efficiency. We show that board size and independence do not have a definitive effect on the entity's efficiency. Instead, the knowledge diversity inside the boardroom and the active character of trustees have a positive influence on resource allocation. The cognitive dimension of the extended model of governance is critical to explaining how boards impact on organizational performance.