An examination of board director’s roles and the impact of the external environment and board characteristics

Abstract

Purpose: The thesis aims to explore the roles that board directors undertake and understand whether there is an impact of the external organisational environment as well as several board characteristics on these roles. Design/ Methodology Approach: Building on existing literature a model is developed to test hypothesized relationships—i.e. directors’ roles with external environment and board characteristics. Measurements are designed—withdrawing them from the literature—to collect quantitative data from directors of UK organisations. The responses were collected from 115 directors working in UK organisations. Principal component analysis is conducted to reduce the data and propose a set of directors’ roles and correlation as well as regression analyses are utilised in order to test the hypothesised relationships. Findings: The results of the principal component analysis propose a set of six distinct roles for board directors, providing a new framework for future researchers. In addition, it is found that both the external environment and the board characteristics have some impact on what directors do, extending the limited empirical evidence found in the literature. However, the theoretical framework needs further examination and research. Limitations/ Future Recommendations: The current thesis is evidenced by various limitations. Firstly, additional constructs can be added as determinants of the directors’ roles. Secondly, the response rate in the survey is low, which is regarded as a limitation, although there are limited studies offering quantitative results from board members