Directors’ networks and access to collective resources

Abstract

Purpose

This paper aims to illustrate the resource dependency theory by making ties between the different resources needed by a firm and the members of the board through their allegiances to different organizations. Many researchers have explained the formation of the board through a controlling function. Alternative explanation is proposed by the resource dependency theory.

Design/methodology/approach

To investigate the case of the largest company in Canada, the authors took their data in the Boardex database. Then drawing an affiliation matrix, they used the Pajek software to analyze these connections. They obtained a non-directional social network prone to illustrate the resource dependency theory.

Findings

The authors found different categories of resources being placed at firm’s disposal: political, social and economic, under different forms. Because a case study approach was used, the findings will be used to complete the theory rather than confirm or contradict it. The case firm is well-connected at every level, although having a quite conservative board: only one woman, no representative of the social or environmental worlds. Through a program for designing networks, the authors show that board member’s networks are encompassing a spectrum of resources. Comparing with a previous study, it was found that the proportions of these resources remain the same in 2013 than in 2007.

Research limitations/implications

This case is a very large group. Therefore, it can be expected that it will need every kind of resources. It might be interesting to replicate the study on smaller firms. The results imply that boards may not be the best structure to control the firm’s inside activities.

Originality/value

Although many theoretical papers exist on this question, the board is mainly studied through the insiders/outsiders dichotomy, but there are few practical studies taking the resource dependency theory perspective.

Citation

Breton, G. and Dicko, S. (2015), "Directors’ networks and access to collective resources", Society and Business Review, Vol. 10 No. 3, pp. 223-238. https://doi.org/10.1108/SBR-06-2015-0020