Board members working style and board demography in SMEs spanish firms

Abstract

The aim of this paper is to analyze the relationship between board demography and company performance and between the board members working style and board task in small and medium-sized enterprises (SMEs). For this purpose, we examine the effect of board composition, size, activity, leadership structure on firm performance and the effect of board members working style in board service and control roles. In order to test our hypothesis, we used a sample of 307 Spanish small and medium-sized firms (SMEs), of which no names are listed. Our main empirical result is the negative impact of the proportion of outside directors and the board size on firm performance. Besides, analyzing board members working style, we have to emphasize the negative impact of the presence of outsiders and the positive impact of board tenure on the board service role. Analyzing board control role, we have to highlight the negative relationship between this variable and CEO tenure. © 2012 Springer-Verlag Berlin Heidelberg.