determinants of roles and responsibilities of boards of directors in subsidiary companies

Master's Thesis from the year 2011 in the subject Business economics - Personnel and Organisation, grade: 8,0, VU University Amsterdam , course: Boards of Directors / Governance / Strategy, language: English, abstract: Despite the growing importance and the current trend of a globalizing economy, relatively little is known about the roles and responsibilities of subsidiary board of directors and how they are influenced by various drivers. This thesis focuses on and investigates the roles and responsibilities of a subsidiary board and which firm-related (internal) and environmental-related(external) drivers could potentially influence these roles. From the existing literature on corporate governance four major roles are derived for the SB, namely a monitoring, advising, internal and external role. Qualitative data from 8 in-depth interviews with board members of a global subsidiary company provided a clear set of responsibilities in line with the four board roles. Furthermore, in this case firm growth, acquisitions and the organization at the parent level are seen as major internal drivers of board responsibilities. Economical downturn, industry changes and technological innovations are seen as critical externaldrivers of board responsibilities in a subsidiary company. Additionally, this thesis shows that in times of economical recession the board tends take on a moremonitoring focused role. Smaller firms and acquisitions lead to a strong internal focus whereas the changes in the industry and a larger firm size result in more externalresponsibilities. Finally, changes at the level of the parent and technological innovations lead to a more service or advising role of the board of directors in subsidiary boards. This thesis highlights the conditions under which the roles and responsibilities could change or shift and contributes to the literature as it presentsevidence that agency theory as well as resource dependence theory are relevant in the analysis of board responsibilities in subsidiary companies.