Do Private Family SMEs really need an empowered board?

Abstract

In this article, a conceptual framework is proposed for understanding the antecedents of board empowerment in private family SMEs. This conceptual framework explains how institutional theory should be integrated to understand how contingencies relate to board empowerment in this type of firm. Based on an in-depth case study, we make three main suggestions. First, we believe that the relationship between contingencies and board empowerment is mediated by perceived governance needs, and thus isn’t a direct relationship. Second, we state that the relationship between the governance needs and board empowerment is moderated by institutional forces. And third, we propose that these institutional effects themselves are moderated by the influence of the CEO.