in the agency theory.
2.3.1.2 The strategic role
The strategic role of the board of directors is based on the stewardship theory. This theory found its foundation in psychology and sociology and defines that managers could be seen as stewards who are motivated to act in the best interest of their principals (Donaldson & Davis, 1991) .
As opposed to the agency theory, the stewardship theory assumes that there is no difference in interest between management and ownership, which means that managers do not solely want to maximize their own interest (Hung, 1998) . The executive manager essentially wants to execute their job well, being a good steward of the corporate assets. This means that the board can serve the company through engaging actively …show more content…
Insiders offer strong internal network connections, while outside/independent business experts may have connections to a broader range of suppliers, customers, other boards, government agencies, banks and so on (Hillman et al., 2000) . Translating the above-mentioned reasoning into diversity variables, I believe that independent or non-executive directors can lead to a more extensive and different network compared to executive directors. Additionally, I also suppose that non-national directors have different connections than national directors (national to the same country where the organisation has its headquarters). Furthermore, age diversity could also lead to a broader social network and skills. The younger generation may have more experience in online business, while the older generation can deal better with the offline business because of experience through their career. These different connections and knowledges could provide additional advice and expertise to the firm in order to understand and respond more accurate to its environment and in addition, it could boost collaboration with key stakeholders (Beckman & Haunschild, 2002)
2.3.1.2 The strategic role
The strategic role of the board of directors is based on the stewardship theory. This theory found its foundation in psychology and sociology and defines that managers could be seen as stewards who are motivated to act in the best interest of their principals (Donaldson & Davis, 1991) .
As opposed to the agency theory, the stewardship theory assumes that there is no difference in interest between management and ownership, which means that managers do not solely want to maximize their own interest (Hung, 1998) . The executive manager essentially wants to execute their job well, being a good steward of the corporate assets. This means that the board can serve the company through engaging actively …show more content…
Insiders offer strong internal network connections, while outside/independent business experts may have connections to a broader range of suppliers, customers, other boards, government agencies, banks and so on (Hillman et al., 2000) . Translating the above-mentioned reasoning into diversity variables, I believe that independent or non-executive directors can lead to a more extensive and different network compared to executive directors. Additionally, I also suppose that non-national directors have different connections than national directors (national to the same country where the organisation has its headquarters). Furthermore, age diversity could also lead to a broader social network and skills. The younger generation may have more experience in online business, while the older generation can deal better with the offline business because of experience through their career. These different connections and knowledges could provide additional advice and expertise to the firm in order to understand and respond more accurate to its environment and in addition, it could boost collaboration with key stakeholders (Beckman & Haunschild, 2002)