Boards’ Different Advisory Tasks – What Makes Board Members Use Their Knowledge?

Abstract

We investigate what makes board members use their knowledge and skills for providing advice to executives on different matters. Distinguishing between functional and firm-specific advice, we examine how the use of knowledge and skills mediates the relationship between board processes and different advisory tasks. The empirical results highlight the leadership role of the chairperson and show that antecedents of the two types of advice differ. Applying group effectiveness arguments, we contribute to the understanding of actual board behavior. Furthermore, the study provides insights for both practitioners and policy-makers on how to make use of the board as an organizational resource.