12.11. The Working of the Board of Directors, a Case Study of an International Family Firm

Public examination of a doctoral dissertation in the field of management of small and medium-sized enterprises
Doctoral candidate: Lic.Soc.Sc. Tapio Kuokkanen
Time and venue: 12.11.2011 at noon 12, Technopolis Auditorium, Kuopio Campus

 

My study concerns the working of the board of directors in family businesses. The bulk of previous studies have had an input/output perspective, dealing with what actually happens in the boardroom. Many researchers argue that research on boards should open the “the black box” of actual board behaviour. My purpose in this paper is to address how the board of directors of a family firm performs their tasks both inside and outside the boardroom.

My work is a qualitative case study, which is suited to the investigation of poorly known processes. At the start I sent a quantitative questionnaire to 200 SME technology companies. From these firms I chose a family firm as the object of my case study. In two board meetings of this firm I observed and recorded how the board works in actual practice. Later I interviewed all seven members of the board, the CEO and the finance director.

Previously researchers have explored the connection between the structure of the board and the corporate financial performance. In this study I have a new perspective. I try to clarify how the directors themselves think that their work has been affecting the performance of the firm. This can be also seen as an ethnographical study, where I describe the working of the board from the perspective of the actors. The aim of an intensive case study is to learn how a specific and unique case works.

The results of my study show that in the working process, the case firm realized the strong dynamicity of a family firm. In the working process, the board is divided into two groups, insiders and outsiders. In the boardroom the insiders dominate the debate and the outsiders speak noticeably less. The shareholders set targets for the company and assume the responsibility. They know their company and business better than outsider directors. The outsiders have a different role in the board than insiders. They open discussion to question and spar with insiders. Shareholders highly appreciate their contribution even though they take participate less in the discussion, and think that they are significant specialists who present new viewpoints.

The doctoral dissertation of Lic.Soc.Sc. Tapio Kuokkanen, entitled The Working of the Board of Directors, a Case Study of an International Family Firm, will be examined at the Faculty of Social Sciences and Business Studies. The opponent in the public examination will be Professor Ulla Hytti of the Turku School of Economics, and the custos will be Professor Päivi Eriksson of the University of Eastern Finland.

Photo available for download at http://www.uef.fi/vaitoskuvat

 

Publishing year: 2011

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