Skip to main content
SpringerLink
Log in

Boards, governance and value creation in grant-giving foundations

  • Published:
Journal of Management & Governance Aims and scope Submit manuscript

Abstract

The non-profit sector is a sizeable and highly dynamic component of economies and societies throughout the world. The expectations placed upon non-profit organizations raise fundamental issues such as the capacity of these organizations to deliver, their accountability to the various constituencies that they serve and their capacity to create value. The effectiveness of these organizations should not be taken for granted, and it is therefore important to understand which factors affect their ability to create value. This paper investigates the relationships between the specific knowledge and experience possessed by board members and foundations’ commitment to pursue high value-added activities, such as the improvement of the performance of grant recipients or social innovation. It uses an empirical analysis to apply statistical techniques to a sample of Italian banking foundations. Our results show that, of the various types of skills and background possessed by board members, the managerial skills of business experts are particularly relevant for value creation by grant-giving foundations. The article therefore contributes to the discussion on the relationship between board skills and organizational outcomes.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

References

  • ACRI. (2009). XIV Rapporto sulle Fondazioni di origine bancaria. Rome: ACRI.

    Google Scholar 

  • ACRI. (2011). XVI Rapporto sulle Fondazioni di origine bancaria. Rome: ACRI.

    Google Scholar 

  • Azen, R., & Walker, C. M. (2011). Categorical data analysis for the behavioral and social sciences. London: Routledge.

    Google Scholar 

  • Bantel, K. A., & Jackson, S. E. (1989). Top management and innovations in banking: Does the composition of the top team make a difference? Strategic Management Journal, 10(1), 107–124.

    Article  Google Scholar 

  • Becker, G. (1964). Human capital. New York: Columbia University Press.

    Google Scholar 

  • Bjornali, E. S., Knockaert, M., & Erikson, T. (2016). The impact of top management team characteristics and board service involvement on team effectiveness in high-tech start-ups. Long Range Planning. doi:10.1016/j.lrp.2015.12.014.

    Google Scholar 

  • Blair, M. M., & Stout, L. A. (1999). A team production theory of corporate law. Virginia Law Review, 85(2), 248–328.

    Article  Google Scholar 

  • Blau, P. (1977). Heterogeneity and inequality: Towards a primitive theory of social structure. New York: Free Press.

    Google Scholar 

  • Bowers, C. A., Pharmer, J. A., & Salas, E. (2000). When member homogeneity is needed in work teams: A meta-analysis. Small Group Research, 31(3), 305–327.

    Article  Google Scholar 

  • Bowman, C., & Ambrosini, V. (2000). Value creation versus value capture: Towards a coherent definition of value in strategy. British Journal of Management, 11(1), 1–15.

    Article  Google Scholar 

  • Bradshaw, P., Murray, V., & Wolpin, J. (1996). Women on boards of nonprofits: What difference do they make? Nonprofit Management and Leadership, 6(3), 241–254.

    Article  Google Scholar 

  • Brown, W. A., Hillman, A. J., & Okun, M. A. (2012). Factors that influence monitoring and resource provision among nonprofit board members. Nonprofit and voluntary sector quarterly, 41(1), 145–156.

    Article  Google Scholar 

  • Brown, W. A., & Iverson, J. O. (2004). Exploring strategy and board structure in nonprofit organizations. Nonprofit and Voluntary Sector Quarterly, 33(3), 377–400.

    Article  Google Scholar 

  • Buse, K., Bernstein, R. S., & Bilimoria, D. (2016). The influence of board diversity, board diversity policies and practices, and board inclusion behaviors on nonprofit governance practices. Journal of Business Ethics, 133(1), 179–191.

    Article  Google Scholar 

  • Callen, J. L., Klein, A., & Tinkelman, D. (2010). The contextual impact of nonprofit board composition and structure on organizational performance: Agency and resource dependence perspectives. Voluntas: International Journal of Voluntary and Nonprofit Organizations, 21(1), 101–125.

    Article  Google Scholar 

  • Cannella, A. A., Park, J. H., & Lee, H. U. (2008). Top management team functional background diversity and firm performance: Examining the roles of team member collocation and environmental uncertainty. Academy of Management Journal, 51(4), 768–784.

    Google Scholar 

  • Carpenter, M. A., Geletkanycz, M. A., & Sanders, W. G. (2004). Upper echelons research revisited: Antecedents, elements, and consequences of top management team composition. Journal of Management, 30(6), 749–778.

    Article  Google Scholar 

  • Cornforth, C. (2012). Nonprofit governance research: Limitation of the focus on boards and suggestions for new directions. Nonprofit and Voluntary Sector Quartely, 41(6), 1117–1136.

    Google Scholar 

  • Cornforth, C., & Edwards, C. (1999). Board roles in the strategic management of non profit organisations: Theory and practice. Corporate Governance: An International Review, 7(4), 346–362.

    Article  Google Scholar 

  • Di Pietra, R., Grambovas, C. A., Raonic, I., & Riccaboni, A. (2008). The effects of board size and ‘busy’directors on the market value of Italian companies. Journal of Management and Governance, 12(1), 73–91.

    Article  Google Scholar 

  • Donaldson, T., & Davis, J. H. (1991). Stewardship theory or agency theory: CEO governance and shareholder returns. Australian Journal of Management, 16(1), 49–64.

    Article  Google Scholar 

  • Dutton, J. E., & Duncan, R. B. (1987). The creation of momentum for change through the process of strategic issue diagnosis. Strategic Management Journal, 8(3), 279–295.

    Article  Google Scholar 

  • Finkelstein, S., & Mooney, A. C. (2003). Not the usual suspects: How to use board process to make boards better. Academy of Management Executive, 17(2), 101–113.

    Article  Google Scholar 

  • Forbes, D. P., & Milliken, F. J. (1999). Cognition and corporate governance: Understanding boards of directors as strategic decision-making groups. Academy of Management Review, 24(3), 489–505.

    Google Scholar 

  • Gallie, W. (1955). Essentially contested concepts. Proceedings of the Aristotelian Society, 56, 167–198.

    Article  Google Scholar 

  • Gnan, L., Hinna, A., & Monteduro, F. (Eds.). (2013). Conceptualizing and researching governance in public and non-profit organizations (Vol. 1). Bingley: Emerald Group Publishing.

    Google Scholar 

  • Golden, B. R., & Zajac, E. J. (2001). When will boards influence strategy? Inclination × power = strategic change. Strategic Management Journal, 22(12), 1087–1111.

    Article  Google Scholar 

  • Guo, C., & Brown, W. A. (2006). Community foundation performance: Bridging community resources and needs. Nonprofit and Voluntary Sector Quarterly, 35(2), 267–287.

    Article  Google Scholar 

  • Hambrick, D. C. (2007). Upper echelons theory: An update. Academy of Management Review, 32(2), 334–343.

    Article  Google Scholar 

  • Hambrick, D. C., & Mason, P. A. (1984). Upper echelons: The organization as a reflection of its top managers. Academy of Management Review, 9(2), 193–206.

    Google Scholar 

  • Haynes, K. T., & Hillman, A. (2010). The effect of board capital and CEO power on strategic change. Strategic Management Journal, 31(11), 1145–1163.

    Article  Google Scholar 

  • Herman, R. D., & Renz, D. O. (2000). Board practices of especially effective and less effective local nonprofit organizations. American Review of Public Administration, 30(2), 146–160.

    Article  Google Scholar 

  • Hillman, A. J., Cannella, A. A., & Paetzold, R. L. (2000). The resource dependence role of corporate directors: Strategic adaptation of board composition in response to environmental change. Journal of Management Studies, 37(2), 235–256.

    Article  Google Scholar 

  • Hillman, A. J., & Dalziel, T. (2003). Boards of directors and firm performance: Integrating agency and resource dependence perspectives. Academy of Management Review, 28(3), 383–396.

    Google Scholar 

  • Höglund, L., Holmgren Caicedo, M., & Mårtensson, M. (2015). Managing paradoxes in governance—ensions in the emergence of a new board. In L. Gnan, A. Hinna, & F. Monteduro (Eds.), Contingency. Behavioural and evolutionary perspectives on public and nonprofit governance (Vol. 4, pp. 1–30). Bingley: Emerald Group Publishing.

    Chapter  Google Scholar 

  • Huse, M. (2007). Boards, governance and value creation: The human side of corporate governance. Cambridge: University Press.

    Book  Google Scholar 

  • Huse, M. (2009). The VALUE CREATING BOARD. Corporate governance and organizational behaviour. London: Routledge.

    Book  Google Scholar 

  • Huse, M., & Gabrielsson, J. (2012). board leadership and value creation: An extended team production approach. In T. Clarke & D. Branson (Eds.), The SAGE handbook of corporate governance (pp. 217–232). London: Sage.

    Google Scholar 

  • Huse, M., Hoskisson, R., Zattoni, A., & Viganò, R. (2011). New perspectives on board research: Changing the research agenda. Journal of Management and Governance, 15(1), 5–28.

    Article  Google Scholar 

  • Joshi, A., & Roh, H. (2009). The role of context in work team diversity research: A meta-analytic review. Academy of Management Journal, 52(3), 599–627.

    Article  Google Scholar 

  • Krause, R., Semadeni, M., & Cannella, A. A. (2013). External COO/presidents as expert directors: A new look at the service role of boards. Strategic Management Journal, 34(13), 1628–1641.

    Article  Google Scholar 

  • Lepak, D., Smith, K., & Taylor, M. (2007). Introduction to special topic forum: Value creation and value capture: A multilevel perspective. The Academy of Management Review, 32(1), 180–194.

    Article  Google Scholar 

  • Maznevski, M. L. (1994). Understanding our differences: Performance in decision-making groups with diverse members. Human Relations, 47(5), 531–552.

    Article  Google Scholar 

  • Mendel, S. C., & Brudney, J. L. (2014). Doing Good, Public Good, and Public Value. Nonprofit Management & Leadership, 25(1), 23–40.

    Article  Google Scholar 

  • Miller, C. C., Burke, L. M., & Glick, W. H. (1998). Cognitive diversity among upper-echelon executives: Implications for strategic decision processes. Strategic Management Journal, 19(1), 39–58.

    Article  Google Scholar 

  • Miller-Millesen, J. L. (2003). Understanding the behavior of nonprofit boards of directors: A theory-based approach. Nonprofit and Voluntary Sector Quarterly, 32(4), 521–547.

    Article  Google Scholar 

  • Minichilli, A., & Hansen, C. (2007). The board advisory tasks in small firms and the event of crises. Journal of Management and Governance, 11(1), 5–22.

    Article  Google Scholar 

  • Minichilli, A., Zattoni, A., Nielsen, S., & Huse, M. (2012). Board task performance: An exploration of micro-and macro-level determinants of board effectiveness. Journal of Organizational Behavior, 33(2), 193–215.

    Article  Google Scholar 

  • Minichilli, A., Zattoni, A., & Zona, F. (2009). Making boards effective: An empirical examination of board task performance. British Journal of Management, 20(1), 55–74.

    Article  Google Scholar 

  • Moore, M. H. (2000). Managing for value: Organizational strategy in for-profit, nonprofit, and governmental organizations. Nonprofit and Voluntary Sector Quarterly, 29(1), 183–208.

    Article  Google Scholar 

  • O’Regan, K., & Oster, S. M. (2005). Does the structure and composition of the board matter? The case of nonprofit organizations. Journal of Law Economics and Organization, 21(1), 205–227.

    Article  Google Scholar 

  • Osborne, S. (1998). Naming the beast. Defining and classifying service innovations in social policy. Human Relations, 51(9), 1133–1154.

    Google Scholar 

  • Ostrower, F., & Stone, M. M. (2006). Governance: Research trends, gaps and future prospects. In W. Powell & R. Steinberg (Eds.), The nonprofit sector: A research handbook. New Haven: Yale University Press.

    Google Scholar 

  • Porter, M. E., & Kramer, M. R. (1999). Philanthropy’s new agenda: creating value. Harvard Business Review, 77(6), 121.

    Google Scholar 

  • Pugliese, A., Minichilli, A., & Zattoni, A. (2014). Integrating agency and resource dependence theory: Firm profitability, industry regulation, and board task performance. Journal of Business Research, 67(6), 1189–1200.

    Article  Google Scholar 

  • Terjesen, S., Sealy, R., & Singh, V. (2009). Women directors on corporate boards: A review and research agenda. Corporate Governance: An International Review, 17(3), 320–337.

    Article  Google Scholar 

  • Van de Ven, A. H., & Ferry, D. L. (1980). Measuring and assessing organizations. New York: Wiley.

    Google Scholar 

  • Wang, J., & Dewhirst, H. D. (1992). Boards of directors and stakeholder orientation. Journal of Business Ethics, 11(2), 115–123.

    Article  Google Scholar 

  • Westphal, J. D., & Milton, L. P. (2000). How experience and network ties affect the influence of demographic minorities on corporate boards. Administrative Science Quarterly, 45(2), 366–398.

    Article  Google Scholar 

  • Wiersema, M. F., & Bantel, K. A. (1992). Top management team demography and corporate strategic change. Academy of Management Journal, 35(1), 91–121.

    Article  Google Scholar 

  • Yermack, D. (1996). Higher market valuation of companies with a small board of directors. Journal of Financial Economics, 40(2), 185–211.

    Article  Google Scholar 

  • Zahra, S. A., & Pearce, J. A. (1989). Boards of directors and corporate financial performance: A review and integrative model. Journal of Management, 15(2), 291–334.

    Article  Google Scholar 

  • Zattoni, A., Gnan, L., & Huse, M. (2015). Does family involvement influence firm performance? Exploring the mediating effects of board processes and tasks. Journal of Management, 41(4), 1214–1243.

    Article  Google Scholar 

  • Zattoni, A., & Pugliese, A. (2012). Boards’ contribution to strategy and innovation. In T. Clarke & D. Branson (Eds.), The SAGE handbook of corporate governance (pp. 217–232). London: Sage.

    Chapter  Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Università di Roma Tor Vergata, Via Columbia, 2, 00133, Rome, Italy

    Alessandro Hinna & Fabio Monteduro

Authors
  1. Alessandro Hinna
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Fabio Monteduro
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Alessandro Hinna.

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Hinna, A., Monteduro, F. Boards, governance and value creation in grant-giving foundations. J Manag Gov 21, 935–961 (2017). https://doi.org/10.1007/s10997-016-9370-4

Download citation

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s10997-016-9370-4

Keywords

Search

Navigation