Board Governance: Does Ownership Matter?

Dear Colleagues

Happy to announce our most recent article published in Annals of Public and Cooperative Economics.

Also happy to share that the article has been selected as the Editor’s choice article and made available as open access.

Hideto, M., Hudon, M., & Mersland, R. (Forthcoming), “Board Governance: Does Ownership Matter?”, Annals of Public and Cooperative Economics.

You can read the full article here: Editor’s Choice page

In the article we ask: Do for-profit and not-for-profit organizations organize their boards similarly or differently? Is there a “best practice” governance model across ownership types? Empirically speaking, these are tricky questions to study because generally for-profit and not-for-profit firms deliver different types of services in different types of markets. The microfinance industry is an exception. In this industry for-profit and not-for-profit actors operate side by side delivering banking services to low income families to finance their income generating activities. Using data from the microfinance industry we find that compared to for-profit actors the not-for-profit actors have larger boards, larger percentage of female directors and more frequent board meetings. we further find that the not-for-profit organizations enhance their performance when their boards are larger and meet more frequently. Equally interesting, while having a larger fraction of female directors is beneficial on average it significantly negatively affects the performance of not-for-profit microfinance organizations. Taken together, the findings in this paper send a strong message to observers, policy makers and not-for-profit organizations: Such organizations should not copy the board structure of regular firms but develop their own governance models fitting their needs in accordance with their ownership type.

I hope you enjoy reading the article.

Best wishes,

Roy Mersland

Professor/Director PhD program

Director Center for Research on Social Enterprises and Microfinance (CERSEM)

School of Business and Law

University of Agder

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