Authors: Josiane Fahed-Sreih; Joe Khalife
Addresses: Department of Management Studies, School of Business, Lebanese American University, P.O. Box 36, Byblos, Lebanon ' Department of Electrical and Computer Engineering, School of Engineering, University of California, Riverside, 900 University Avenue WCH 369, Riverside, CA, USA
Abstract: This study develops an equation allowing family businesses to have an optimal board structure in terms of size and composition through a dynamic mathematical modelling technique. The project- or product-type, growth opportunity and objectives that the business needs to achieve and the CEO influence on board, are not considered as determinants of the board size. It was also found that firm size and network links are positively related to both board size and composition. The only factor that is negatively related to board size and composition is market competitiveness. Those that are negatively related to board composition, are the project or product type, inside ownership, growth opportunity and age of the family business. Through this study and the unique mathematical model technique adopted, family businesses can identify which factor can be a determinant of board size and composition, and their relation with each, developing an optimal board structure.
Keywords: board composition; board of directors; board size; corporate governance; decision making; family firms; group decision making; team decision making.
International Journal of Corporate Governance, 2017 Vol.8 No.1, pp.25 - 43
Received: 22 Jan 2016
Accepted: 12 Feb 2017
Published online: 17 Jul 2017 *