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The influence of an ownership strategy on board dynamics

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Abstract

Ownership strategy is a governance mechanism formulated to reach consensus between owners on how to direct their organization towards value creation. Once implemented within an organization, questions arise as to how the ownership strategy influences board dynamics, board decision-making, and, if the company’s governance improves as a result. These important questions are addressed in this study by means of a theoretical discussion and empirical case-based research. This approach looks at how an ownership strategy influences board dynamics as defined by the intellectual capital framework by Nicholson and Kiel (2004). Results of the study suggest that an ownership strategy influences board dynamics and affects board decision-making through board procedures and norms. The results suggest a positive association between board dynamics and an ownership strategy as it creates a clearer framework for decision-making. This study contributes by developing the concept of ownership strategy and explores its influence on board dynamics and decision-making. Given the results, company owners and corporate governance practitioners should consider ownership strategy as a possible governance mechanism to align owners with their board of directors. Policymakers, business owners, and directors interested in promoting long-term governance models can benefit by contemplating the role of an ownership strategy within organizations.

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Source: Nicholson and Kiel (2004, p. 444)

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Source: Nicholson and Kiel (2004, p. 456)

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Authors and Affiliations

  1. University of Iceland, Saemundargotu 10, Gimli, Reykjavík, 102, Iceland

    Gudrun Erla Jonsdottir

  2. Reykjavik University, Menntavegur 1, Reykjavik, 101, Iceland

    Audur Arna Arnardottir

  3. University of Iceland, Copenhagen Business School, Saemundargotu 10, Gimli, Reykjavík, 102, Iceland

    Throstur Olaf Sigurjonsson

  4. Copenhagen Business School, Solbjerg Pl. 3, Frederiksberg, Copenhagen, 2000, Denmark

    Thomas Poulsen

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  1. Gudrun Erla Jonsdottir
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Jonsdottir, G.E., Arnardottir, A.A., Sigurjonsson, T.O. et al. The influence of an ownership strategy on board dynamics. J Manag Gov (2023). https://doi.org/10.1007/s10997-023-09689-2

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