The impact of structure and flux of corporate boards on organizational performance: A perspective from the information technology industry

Abstract

Corporate governance mechanisms in the Information Technology (IT) industry are viewed as pivotal for the success of IT organizations. While corporate governance, particularly in terms of board characteristics, has been extensively studied in other disciplines, it has not received as much attention in the Information Systems discipline. This study investigates the effects of board structure and its changes (i.e., board flux) on organizational performance. Results show that board size, gender diversity, and board age have curvilinear effects while board independence has a positive effect and board flux has a negative impact on performance. However, the negative relationship between board flux and performance was weaker for firms with a higher, as compared with those with fewer, number of independent directors. In addition to making a useful contribution to the sparse literature on the role of corporate governance in IT organizations, our study has strong implications for research and practice.