Board information and board strategic involvement

Abstract

The role of boards in firm strategy has long been the subject of debate. Over the last four decades, research on the relationship between boards of directors and strategy has proliferated. Ye t to date there is little theoretical and empirical study regarding the question of how board information affects the boards of directors' strategic involvement. Using a survey data from 104 responses of chairpersons collected in the year of 2010 in China, we examine how board information affects boards' behaviors of strategic involvement. Our study shows that quality of information, information diversity, frequency of board interaction, and proactive seeking information positively influence boards' strategy monitoring and advisory. These findings provide empirical support for agency theory and resource dependence theory on boards.