Board Members That Tie: Three Essays on Antecedents and Consequences of Nonprofit Board Interlock

Date of Award

5-23-2021

Degree Type

Dissertation

Degree Name

Doctor of Philosophy (PhD)

Department

Public Administration

Advisor(s)

Nabatchi, Tina

Second Advisor

Van Slyke, David

Keywords

board interlock, boards of directors, interorganizational networks, nonprofit board governance

Subject Categories

Business | Management Sciences and Quantitative Methods | Organizational Behavior and Theory

Abstract

In this dissertation, I bring attention to an understudied question in nonprofit board governance research: board members who link organizations through their board affiliations. Specifically, I focus on board interlock, a phenomenon that occurs between organizations when they are connected via overlapping board members. Board interlock is an important area of research in governance study because of its potential to impact governance outcomes through the flow of information, resources, and status. Despite its potential significance, the role of overlapping board members has not been explicitly discussed in the nonprofit board governance literature.This dissertation consists of three essays that address the issues of board interlock in nonprofit board governance contexts. The goal of this dissertation is to investigate the antecedents of board interlock and the outcomes that are critical to improving board governance accountability. Specifically, it addresses three questions: (1) What are the theoretical orientations and the empirical evidence of board interlock? (2) What are the underlying mechanisms that predict board interlock formation? (3) Does board interlock facilitate the adoption of board governance policies? Each question is addressed in a separate chapter of this dissertation (Chapter 2, 3, 4). In addition to the three essays that address these questions, the dissertation begins with an introduction chapter (Chapter 1) that presents a theoretical framework for the three essays and closes with a conclusion chapter (Chapter 5) that discusses implications of findings from the three essays. The first essay, presented in Chapter 2, provides a synthesis of the literature on antecedents and consequences of board interlock in for-profit and nonprofit context. I integrate research on what we know about board interlock and further propose areas where more research is needed. Specifically, I focus on agenda such as why interorganizational networks occur through overlapping board members and how they influence a variety of governance outcomes. A review suggests scholars have developed three different research traditions in theorizing antecedents of board interlock, including interorganizational perspective, intra-class perspective, and recruitment perspective. Furthermore, a review suggests board interlock influences important board governance outcomes, such as management strategies and practices, financial performance, and acquisition of resources. Finally, I propose suggestions for future research based on identified gaps in the literature. This chapter contributes to scholarship by bringing attention to board interlock through the integration of current literature and making suggestions for future research. The second essay, presented in Chapter 3, investigates mechanisms of board interlock formation. Specifically, I test predictors of board interlock using various characteristics at multiple levels, including organization-level, dyad-level, and structural-level. In doing so, I use a balanced panel of nonprofits in three Central New York cities from 1998 to 2014. I employ a temporal exponential random graph model (TERGM) to assess and control for the interdependent nature of the longitudinal network. In brief, I find that network structural characteristics, such as preferential attachment (e.g., actors' preference to connect with popular actors that are already well-connected) and transitivity (e.g., actors' preference to connect with others with whom they have mutual relationships), are strong predictors of board interlock. These findings inform nonprofit managers about how to bridge to an existing network by recruiting well-connected individuals to the board. This chapter makes a contribution to literature by providing the first empirical examination of nonprofit board linkage in a longitudinal context. The third essay, presented in Chapter 4, examines the relationship between board governance policies, board interlock network characteristics, and institutional pressures. Drawing on network perspectives and institutional theory, this study explores how network characteristics (network presence, network position) and institutional characteristics (external funding, professionalization) are associated with the more extensive use of board governance policies. In doing so, I use a longitudinal panel of nonprofits in three Central New York cities from 2008 to 2014. The analysis from ordinary least squares regression model indicates positive effects of network presence, network position, and professionalization on board governance policy adoption. Results provide useful insights that nonprofit managers can use to encourage the adoption of board policies designed for enhanced governance. This chapter builds on literature through an investigation of board governance policy using a combined theoretical framework to provide a more clear elaboration on network mechanisms and institutional contexts that influence board decision-making over governing practices.

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