Boards of advisors in family smalland medium-sized enterprises

Abstract

This study examines the determinants of advisory boards in Dutch family small- and medium-sized enterprises. Boards of advisors consist of committed people that recurrently provide advice to the family firm’s decision-makers. Using resource-dependence theory, we hypothesize and find empirical support for the positive influence of highly dynamic environments on the presence of an advisory board. Contrary to our expectations, the presence of a board of directors positively influences the likelihood of having an advisory board, suggesting complementarity between these two governance mechanisms. We found no support for a generational effect on advisory board presence.