An Exploratory Study on High Performance Configurations of Board Practices in Family and Non-family Firms: A Fuzzy Set Analysis
Despite voluminous empirical studies on the relationships among board characteristics and company performances, there are mixed and inconsistent findings. One explanation for the divergent findings is that those studies conceptualized each board characteristic as an independent factor, without considering its relationship with others. However, various board governance practices coexist within and outside firms, and they collectively constitute the context of governance environments. To better comprehend the relationships among board governance practices and firm performances, it is necessary to examine the interrelated board mechanisms as a governance bundle. Building on configurational and complementarity/substitution perspectives, we, using a sample of 563 public Taiwanese firms over a period of six years (2008-2013), conduct fuzzy set/qualitative comparative analysis (fs/QCA) to explore what the different configurations of board governance bundles are and how the combinations of board governance practices lead to high firm performance in Taiwanese public family and non-family firms. We uncover that there are five bundles of board practices occur more frequently across the years in family firms leading to high firm performance and four combinations in nonfamily firms achieving high profitability. High-performance configurations of board governance practice between family and non-family firms are totally different. In addition, almost all of nine configurations are presented in hybrid governance forms.