Abstract
Keywords
Introduction
Directors played diverse board oversight roles in corporate governance mechanisms. They serve as agents for managerial control and assessment on behalf of shareholders and principals (Fama & Jensen, 1983; Jensen & Meckling, 1976); provide advice and counseling (Johnson et al., 1996), access to vital resources such as government funds, legitimacy, and tax reductions (Hillman, 2016; Pfeffer & Salancik, 2003), and strategize organizational decisions (Melkumov et al., 2015; Zahra & Pearce, 1989). Following international corporate scandals, the emphasis on directors and subsequent responsibilities garnered academic focus. Scholars have extensively elaborated on the Agency Theory and Resource Dependency Theory to denote what directors should
From the viewpoint of behavioral researchers, directors are affected by other often-disregarded contexts such as structural, political, cultural, and cognitive (Golden-Biddle & Rao, 1997). Specifically, behavioral scholars deeply consider certain director behaviors that gradually influence oversight roles. Debatably, social-psychological elements also contributed to oversight roles and governance results (Hillman et al., 2008; Kaczmarek, 2017; Westphal & Zajac, 2013). Regardless, the underpinning aspects of how directors behaved individually following other criteria such as personal, contextual, and cultural characteristics remained ambiguous (Adams et al., 2010). As a result, deeper understanding of how director’s behavioral could affect their oversight roles remain challenging. The primary cause for the low attention level was the intricacies in accessing directors and boardrooms, often known as the
In the attempt to create better understanding of how director’s behavior affects their board oversight roles, Hillman et al. (2008) proposed a conceptual model based on the identity theory and social identity theory. Identity theory posits that individuals consist of multiple role identities (or identities) that provide meanings to the individuals’ roles in society, with each identity having its prescribed expectations, and individuals are expected to fulfill the identity expectations (Hogg et al., 1995). Callero (1985) also highlights that identities imply behaviors and actions. For example, an individual can concurrently relate the identity of a CEO, parents, and husband. These multiple identities have society expectations, and the individual is expected to perform each of them as prescribed by society. Therefore, the theory defines
Similarly, Tajfel (1974) explains that social identity theory reflects how individuals self-categorize themselves as social group members (in-group) compared to out-groups. The membership of these social groups exists in various contexts, such as sports preferences, political affiliations, organization, gender, and nationality. The belongings to these social groups provide self-definition based on the traits and attributes of the social groups. For instance, individuals with multiple roles as CEO, parents, and husband may also self-categorize themselves in social groups such as the Kopites (a Liverpool fan), Democratic supporters, and the Googler (a person who works in Google). Thus, social identity theory defines
Individuals with multiple identities are usually assumed to have access to greater resources, prestigious status, and privileges. Therefore, individuals with converging identities are likely to act voluntarily to positively influence their role. Theorists argue that individuals with strong identification with role identities or social groups are likely to act to enhance the positively perceived roles or attributes of the social group. For example, if a director identifies strongly with the role of director and the organization, they are likely to perform their board duties positively as expected and benefit the organization (Ashforth & Mael, 1989; Capezio et al., 2014; Golden-Biddle & Rao, 1997). However, when multiple identities conflict, they are likely to minimize positive impact. Conflicting identities, such as government directors versus corporate directors; shareholder representative directors versus stakeholder representative directors and outside and inside directors have an opposing effect on board functions due to competing demands (Adams et al., 2011; Veltrop et al., 2018; Yoo & Koh, 2022; Zhu & Yoshikawa, 2016), similarly to identifying with different types of organizations or social groups (Pirzada et al., 2017; Zhang et al., 2020; Zhu & Yoshikawa, 2016). The convergence and divergence of multiple identities and identifications to social groups are based on the salience of the identifications; it depends on the strength of the perceived identity and the relevance of the context (Ashforth et al., 2001). For instance, a director’s identity as a member of the corporate board may become significant depending on the situational context compared to the others. Therefore, they may behave differently because they have a different identity, or the strength of identification with the same identity differs from the others.
In their conceptual model, Hillman et al. (2008) apply identity and social identity theories to explain how multiple director’s identities and identifications to social groups may influence their board oversight roles. Their arguments draw on the work of Golden-Biddle and Rao (1997), who show that the performance of board functions is influenced by the director’s identification with the organization. The conceptual model proposes that a director may have multiple role identities such as director, CEO, shareholder, management, and stakeholder. Directors may also identify as members of a particular social groups such as such as the organization or an elite group of CEOs. There are various expectations associated with multiple identities and identification, however the scholars focus on monitoring and provision of resources. Regardless, the strength of identification with multiple roles and social groups duly influenced their behavior. For instance, although directors are expected to counter agency costs, the degree of identifications, that is, strength, could either increase the agent’s duties or cause role deviance (Callero, 1985). Specifically, the conceptual model proposed (1) identification with the organization, (2) identification with the role of a director, (3) identification with the role of a CEO, (4) identification with shareholder, and (5) identification with customer or supplier could; could affect their (1) monitoring and (2) resource provision roles.
Based on the conceptual model, many researchers have examined how multiple identities and identifications affect director behavior on the board, particularly with respect to their oversight role in monitoring and providing resources. Corporate governance researchers have demonstrated that identification with the organization strengthens board oversight roles (Capezio et al., 2014); however, longer tenure could potentially weaken oversight roles over time (Clements et al., 2018; Melkumov et al., 2015; Veltrop et al., 2018). Similarly, finding shows that the effects of organizational identification with different contexts on monitoring tasks differ between GBOD in Chinese SOEs and private firms (Zhu & Yoshikawa, 2016). Specifically, when organizational identification is strong, those in SOEs loosely monitor management because they assume that SOEs must set predetermined objectives and goals. However, their counterparts in private companies perform the tasks of monitoring and providing resources equally well. The level of identification with the organization also leads directors to support the appointment of new directors who are demographically similar and connected to the existing board to maintain the organization’s positive image (Bednar et al., 2022).
Becoming a director is a prestigious role, and according to identity and social identity theories, directors who identify strongly with this role are often perceived as high performers. The role of director is a prominent social position that gives those who hold it a positive image and upholds the values associated with it. For example, family-founders and lone-founders tend to exert control over their companies by appointing directors from their network and viewing them as an extension of themselves. Indeed, directors of family-founders tend to appoint directors with the same values and priorities (e.g., ownership control, family business, image, and prestige), while directors of lone-founders select those who belong to similar groups (Cannella et al., 2015). Likewise, strong identification with the role of the first-son director has been shown to affect firm performance and lead to fewer strategic decisions, as such directors strongly protect family values. In contrast, identification with the role of the non-first son director leads to strategic business decisions and promotes governance practices (Yoo et al., 2014).
Identification within the in-group also splits the board into smaller social groups based on demographic characteristics such as gender, age, race, or family affiliation (Kaczmarek et al., 2012b; Shin & You, 2023; Vandebeek et al., 2021); weakens the strength of overall board identification and hinders coherent decision-making. Nevertheless, identification with subgroups based on information faultlines (e.g., directors’ specific knowledge, independence, tenure, and primary job) has been shown leading to high-quality and strategic decision-making (Elms & Nicholson, 2020; Shin & You, 2023). Interestingly, identification with the director role, especially among minority groups such as female directors and non-citizen directors, encourages them to actively engage in board discussions to overcome stereotypes (Jonsdottir et al., 2015), make fewer acquisitions (Chen et al., 2016), and strategically nominate new board members from their minority group (Kaczmarek et al., 2012a).
Scholars have examined how the strength of identification with the CEO may affect how directors strategically support each other. Weak identification with the CEO, which is a group of the corporate elite, may prevent the CEO from getting help from the board, especially if he or she does not have social networks (McDonald & Westphal, 2010). On the other hand, stronger identification with the CEO, especially if board members have the same last name as the CEO, could increase agency costs (Zhang et al., 2020). Researchers have also found that strong identification with stakeholders influences the strategic decisions of employee-representative directors (Adams et al., 2011), while identification with shareholders does not influence monitoring tasks (Guerrero et al., 2017).
The exponential interest in alternative explanations for how directors’ behavior has affected their roles suggests that there is more to be discovered from this perspective. Given the growing interest in examining the influence of different director identities and social group affiliations on their roles as directors, this article aims to identify and map the evidence available from this perspective, provide key findings and illuminate gaps. The article concluded with a refined conceptual framework. The following research question was formulated using PCC (Population or Participants/Concept/Context) recommended by the Joanna Briggs Institute (JBI):
Methodology
The review paper corresponded to the JBI Scoping Reviews (JBI) protocol and employed the Preferred Reporting Items for Systematic Reviews and Meta-Analyses extension for Scoping Reviews (PRISMA-ScR) for reporting purposes. The JBI aligns with PRISMA-ScR and establishes an improved framework to analyze the evidence and reveal the results (Peters et al., 2020). Scoping involves summarizing the current and relevant viewpoint rather than evaluating the research and synthesizing quality, which is more suitable for a systematic literature review. Furthermore, the framework may include descriptive and qualitative content analyses when analyzing the evidence. In contrast, quantitative analyses require literary scopes regarding population or participant frequency and the research question concepts and contexts.
Moreover, JBI recommends the pre-planning of presentations to foresee integrating the review questions elements in the presentation. The technique proves adequate in addressing the review question by providing an avenue to classify works of literature and report the current implementation of the intended aim for this review. For reporting, PRISMA-ScR outlines a recent and comprehensive checklist for scoping review purposes (Tricco et al., 2018). Specifically, the extension encompasses 20 essential reporting and 2 other checklists comprising seven sections: (1) Title, (2) Abstract; (3) Introduction, (4) Methods, (5) Results, (6) Discussion, and (7) Funding. The checklist was subsequently completed to support the scoping process.
Search Strategy
Initially, a literature protocol was developed to facilitate the process (see Table 1). The search strings and keywords are developed through several article examinations that accurately addressed the review question with essential keywords (“social identity,”“identification,”“board of director,”“board task,”“oversight role,” and “corporate governance”). Several keywords were also expanded to ensure a thorough search. For example, researchers conceded to add more keywords such as “monitor,”“control,”“resource provision,”“advice,” and “counsel,” apart from “board tasks” for higher outcomes. The researchers also presented the operational definitions as follows: (1) identification—when directors self-define according to perceived roles, social groups, or organizations; (2) board of directors—corporate board involving the CEO-directors, independent and non-independent directors; (3) board oversight roles—directors’ roles in strengthening corporate governance, or also knowns as board tasks, board role or board service.
Literature Review Protocol.
For the identification step, relevant publications were chosen with search strings (see Table 1) in two distinct databases: Web of Science (WOS) and SCOPUS. The databases were selected for their cutting-edge articles, advanced search functions, and extensive articles across diverse research disciplines (Shaffril et al., 2020). Additionally, manual searches from other renowned journals and publications (SAGE, Emerald, Science Direct, Springer, and Taylor Francis) were regarded for journal reliability and availability relevant to corporate governance fields. A total of 350 articles were selected from the abovementioned resources.
Data Extraction and Synthesis
Duplicated articles were removed in the screening process. Specifically, 169 articles were eliminated in the first screening round, whereas the remaining 181 were filtered under eligible criteria. Only empirical articles (including early-access materials) were selected, whereas proceeding and conference papers, reviews, and book chapters were disregarded. Non-English publications were also omitted to mitigate content misunderstanding. Forty-seven publications were excluded following the eligibility and exclusion criteria, leaving 134 articles for the final screening step. The third screening involved reading titles and abstracts to ensure that the articles addressed the review question. For example, the article must present at least one identification or social identity element among directors and board oversight role effects. Researchers follow the query questions in Table 2 to ensure that no relevant articles are inadvertently excluded during the process. If the researcher answers “Yes” to all questions, the article is considered for further evaluation. If the searcher answers “Not sure,” the entire article is read for further evaluation and decisions about inclusion or exclusion are made at this level.
Screening Tool for Relevance of Title and Abstract.
As the process eliminated 106 articles, 28 papers remained for data extraction and synthesis. Finally, four articles were excluded as no explicit discussions on the board oversight role were identified. Thus, the final count for the data charting process was 24 articles. The process is presented below in the PRISMA flow diagram (Figure 1). A pre-developed Google Sheet was used for convenience and easier online sharing for the data charting process. The pre-designed sheet also recorded the extracted evidence to address review questions and derive past research’s demographic details (context, publication year, and citation number). Based on the social identity and identity theories, we focussed on mapping the antecedents, types of identifications, and the board oversight roles to have a complete overview of the evidence available from this perspective, provide key findings and gaps.
PRISMA flow diagram.
Findings
Descriptive Observations
Notably, 20 studies employed quantitative methodologies and multiple regression analyses to assess the correlation between identifications and directors’ roles. Only four studies used qualitative methodologies with semi-structured interviews. Most study origins were the United States of America (seven studies), China (four studies), and the United Kingdom, Australia, and Korea (two studies), as illustrated in Figure 2.
Origins of the study.
Figure 3 illustrates the most common keywords used in the previous studies:
Keywords used in the articles.
Table 3 presents the number of record counts and journal impact factor (as of 2021). There are six articles published in
Record Count and Journal Impact Ratings.
Figure 4 illustrates the citation report for the 24 articles by end of February 2023. Following WOS and SCOPUS, the total number cited for the papers ranging between 1997 and 2022 are 1027 and 1163. The blue lines indicated the WOS citations, whereas the red lines denoted the SCOPUS counterparts.
Number of yearly citations according to WOS and SCOPUS.
Based on WOS and SCOPUS, the top three most-cited papers included (1)
Number of Citations According to WOS and SCOPUS.
Antecedents to the Identifications to Multiple Identities and Social Organizations or Groups
To answer the research question posed for this article, theme such as the antecedents to the identifications of multiple identities and social organizations or groups of the board members are derived from the selection of articles. In their seminal works, scholars such as Ashforth and Mael (1989), Bergami and Bagozzi (2000) and Dutton et al. (1994) have distinguished constructs such as individual categorization; out-group salient, distinctiveness, prestige and stereotype, self-enhancement, and organizational images as several interconnected antecedents to the social identification in an organization. The antecedents discussed by these scholars are consistent, albeit with some trivial differences in terminology. Therefore, we grouped the antecedents to a broader terminology based on our interpretation from the reviewed articles and discussed them in the subsequent sections. We compared the antecedents with the reviewed articles and rearranged them into three major themes that reflect the identification stages:
Self- Categorization (SCAT)
Self-Categorization (SCAT) is how individuals unconsciously self-categorize themselves into social groups of perceived similar social identifications without the need to interact with or be accepted by the other members (J. C. Turner cited by Ashforth & Mael, 1989). They need to socialize because it defines the sense of belonging to a particular context and degree, although it does not require them to interact with the other members of the social groups initially. The categorization provides them with socio-psychological comparable attraction and establishes reassurance (Westphal & Zajac, 2013). By categorization, one makes themselves distinct from the others, resulting in the in-group and out-group belongings. Distinctiveness often provides a prominent definition to members of that particular social group or organization, emphasizing the differences between theirs and others; it creates boundaries between the in-groups and out-groups (Tajfel, 1974).
In the director’s context, the SCAT implies how directors socialize into the boardrooms by grouping themselves with a person who shares similar values or characteristics. The categorization also helps the directors provide a sense of belonging in the boardrooms such as minority directors such as female or non-citizen directors (Chen et al., 2016; Jonsdottir et al., 2015; Kaczmarek et al., 2012a); shorten their social distance such as sharing a similar surname and or being members of the corporate elite (Huang et al., 2022; McDonald & Westphal, 2010; Pirzada et al., 2017; Zhang et al., 2020); implied their perceived role, such as being an expert or typical director, family or lone-founder director, and first or non-first son director (Cannella et al., 2015; Elms & Nicholson, 2020; Yoo et al., 2014); and elected union directors (Guerrero et al., 2017).
The cognitive categorization that involves highly salient categories such as gender or minority group will maximize the comparations between the categories. The boundaries between in-groups and out-groups are becoming more evident, strengthening the identification, and influencing their behavior. For instance, the boundary between employee and shareholder explains how employee representative’s directors are consistently supporting the employee interest (Adams et al., 2011); group faultlines such as educational or financial qualification and types of directors increase intra-group conflicts and decrease group solidarity to achieve reliable board decision (Kaczmarek et al., 2012b). Hence, self-categorization by directors corresponds to their most salient identifications and influences their board oversight roles.
Self-Enhancement (SENH)
Subsequently, individuals identify themselves into social groups to achieve Self-Enhancement (SENH), to seek positive feelings about themselves, and enhance self-worth by being in-groups (Ashforth et al., 2008). It serves as a social comparison between the in-group and out-group presents positive and unique attributes. By making an affirmative comparison to the out-group, the in-group is perceived to have distinct values, attractive images, prestige, and increased self-esteem (Ashforth & Mael, 1989; Hogg, 2001). Prestige is one of the constructs that boosts their self-esteem; it transcends power and achievement and affirms their positive self-view (Ashforth & Mael, 1989).
Therefore, being a company director is a prestigious position in the director’s context because social and human capital usually amalgamates with the director; thus, not all managers could be appointed (Oehmichen et al., 2017). Individuals also perceive positive organizational images are important and attractive to be associated with; the internal perceived organizational identity and construed external image. Perceived organizational identity and construed external image answer the individual’s questions of “what is this organization really about” and “how do outsiders think of me because of my association with this organization” (Dutton et al., 1994).
Thus, the need for self-enhancement explains why directors actively acquire valuable expertise and experiences that contribute to a high quality of their performances; stronger identification, they become effective in their board oversight role. The enthusiasm to acquire expertise and experiences is related to being a director; perceived positive values and practices associated with the director. It also boosts their self-esteem, the prestige to be associated with the other directors (Clements et al., 2018). Fitzsimmons and Callan (2022) further assert that the need to self-enhance encourages male board chairs to treat their female board colleagues equally, which leads to active participation by male board members and improves the quality of decision making.
In contrast, Veltrop et al. (2018) suggest that the outside director’s early tenure on the board signaling weak organizational identification because they have minimum firm-specific knowledge and experience with the organization’s operations. Hence, they have difficulty performing fiduciary duties. The disadvantage and difficulty they face at the early tenure echo negative appeal to identify with the organization. However, both scholars agree that the stronger directors identified with the in-groups gradually change and become adaptive to the existing norms and go with the flows. They value senior management behaviors as prototypical organizational members; hence they become ineffective with their board oversight roles. Interestingly, the later scholar also suggests that the outside director with weak organizational identification throughout his or her directorship, longer tenure does not negatively affect his or her board oversight role. The negatively valued distinctiveness can explain the latter finding. Although the outside director has weak organizational identification, being in a negatively regarded group, they use it as a defense mechanism and translate it to positive behavior by adhering to their fiduciary duties, thus increasing their self-esteem.
Melkumov et al. (2015), in their study of multiple identifications toward the director’s service tasks in Finnish industrial organizations, found that of all identifications being examined, organizational identification has the strongest identification because it prevents the directors from being isolated. Thus, the directors, in general, contribute positively to their roles. Other researchers also demonstrated that directors of highly well-defined and prestigious groups have strong social identifications. Compared to the first-son directors, the non-first son directors are more open-minded and innovative. They are willing to exert unconventional business methods that traditionally have been practiced by the family (Yoo et al., 2014). The lone-founder and family founder’s directors will appoint and make acquaintance with directors within the same groups respectively and avoid appointing the director from the comparable groups. The similar values and practices by both types of directors attract directors from the same mix. This strategy ensures their control over the firms is secured as both groups share values and practices (Cannella et al., 2015). In comparison, directors from the Chinese-based firms observe the high principle of Confucianism philosophy that emphasizes loyalty to the organization (Capezio et al., 2014).
Social comparison also increases self-esteem, which contributes to the feeling of prestige. In general, there is a high tendency that a director is also the CEO of the other organization. Thus, these directors usually belong to the corporate elite, a distinguished group with a significant influence, extensive access, and networking to government, politicians, and other authorities; they possess exceptional privilege compared to the others. Hence, weaker identification of the corporate elite will negatively affect the CEO-directors to acquire strategic assistance from the elite members. Besides, other directors exert vigilant control over the CEO-directors in the boardroom implies little respect for the CEO-directors with weak corporate elite identification. Thus, the in-group bias also justifies the social distance and shapes how directors behave to the boardrooms’ out-group (McDonald & Westphal, 2010).
Zhang et al. (2020), in their study on companies listed on Shanghai and Shenzhen Stock Exchanges from 2005 to 2015, demonstrated that the identification of the CEO’s surname ties increases agency costs. Surnames and family names often represent a sense of kinship, shared values, bond, and belonging; it also echoes prestige to the director with similar surnames to the CEO. Naturally, the CEOs and directors from shared surnames have distinct social groups and naturally classify themselves with an in-group category, potentially practicing biased and favoritism in the boardrooms. Thus, the effect of the biased in-group will inhibit the monitoring and controlling activities. Zhu and Yoshikawa (2016) point out that in China, government officials appointed as directors are considered a high prestige group representing the state, the Communist Party. In a high dominant and government control, the government directors are bound to support the state, have essential roles in the boardrooms, and their social groups are distinct from the others.
Golden-Biddle and Rao (1997), in their study at a non-profit organization in the United States, found that the directors’ identification with the organization helps them to boost up their self-esteem, define their philanthropy and maintain their social connection because they perceived the non-profit organization has a pleasant image that congruent with their implied board role. Some directors perceive that they are serving a volunteer-driven organization, while others treat it as a venue to socialize with family and friends. Despite the different perceptions, all directors feel that the outsiders associate their directorship with positive images by serving the non-profit organization. The high self-esteem strengthens their organizational identification and translates to their predicting role, either as a vigilant monitor to a volunteer-driven organization or as a friendly, supportive member to a family-friends organization. To sum up, self-enhancement serves as one of the conduits to directors’ identifications and shapes their board oversight roles.
Out-Group Salience (OTGS)
Finally, the third antecedent discussed in the reviewed articles is the Out-Group Salience (OTGS), how individuals see themselves as in-group members and compare themselves to the other out-group (Stets & Burke, 2000). The in-group also creates in-group favoritism and out-group deprecation. Naturally, the desire to feel better about themselves (in-group) initiates stereotype or views the in-group better than the out-group; prejudice or poor judgment to the out-group, and discrimination or treating poorly to the our-group member to feel better about it the in-group (Hogg, 2001; Tajfel, 1974). The out-group salient reinforces alertness about the in-group and creates intergroup competition. The intergroup competition induces visible boundary, emphasizes values, principle, and uniformity of the in-groups, and highlights the differences of the out-groups (Ashforth & Mael, 1989).
Thus, identification is more likely to occur when out-group salience is noticeable. The out-group salience also invokes prejudice and stereotype perception of being a female or minority (usually with negative attributes). It explains why female directors are argumentative and rigors compared to their male counterparts in their decision making, resulting in fewer and smaller firm acquisitions, actively participating in the discussions and strategic decisions in the nomination committee (Chen et al., 2016; Jonsdottir et al., 2015; Kaczmarek et al., 2012a). The in-group favoritism explains why employee representative directors may strategically decide to maximize the stakeholder (the employee) benefits in the boardroom (Adams et al., 2011). In the nominating committee of a multi-ethnic board, out-group salience is evident when Malay or Chinese members of the nominating committee form the majority, leading to a reduction in board diversity and affect their board tasks (Pirzada et al., 2017), and concern about the #MeToo movement triggers stress among nominating committee members, leading them to recommend potential new board members with similar demographic characteristics (Bednar et al., 2022). For outside directors who identified themselves as the in-group members with the majority usually end-up being a conformist, decreasing the monitoring role and are likely to be reappointed (Yoo & Koh, 2022).
Sometimes, intra-group competition derives when the separating line becomes more visible and creates subgroups within the in-groups. The competition may affect the identification within the sub-groups too. For example, Kaczmarek et al. (2012b) explored faultlines consisting of four task-related attributes that will affect the directors’ oversight roles; director’s independence, tenure, educational, and financial background. The directors are likely to form intergroup such as non-executive and executive directors. However, intra-groups are formed within that group, such as newly appointed non-executive directors with financial backgrounds versus long-tenured non-executive directors with a master’s degree. Consequently, instead of higher identification to the role of directors increase, intergroup competition emerges on in-group identification. When these sub-groups are handed task-related faultiness, they are likely to affect their strategic decision because these sub-groups are more salient than the identification as a director. The faultlines such as family memberships, gender, age, and race are also affecting the board decisions in CEO dismissal, resulting from the stronger identification within the sub-groups rather than working cohesively as a team (Shin & You, 2023; Vandebeek et al., 2021). In contrast, information-related faultlines such as director independence, director’s main job, and tenure on the focal board positively affecting the dismissal of the CEO (Shin & You, 2023).
Identifications to Multiple Identities and Social Groups of the Board of Directors
To further discuss the research question posed for this article, this section discusses the identifications to multiple identities and social groups of board members as they serve as indicators of their behavior toward the board tasks. The identifications have been coded as Table 5 for standardization in the proceeding discussions.
Identifications to Multiple Identities and Social Groups Codes.
Organizational Identification (ORID)
Generally, the strong ORID will positively influence their board oversight roles because it will encourage them to expend effort to benefit the organization (Capezio et al., 2014; Golden-Biddle & Rao, 1997; Melkumov et al., 2015). However, Melkumov et al. (2015) underlined the inverted-U relationship between ORID and top management monitoring tasks. The scholars also added that strong ORID positively influences directors’ strategic contribution. In contrast, some scholars argue that over time, stronger ORID normalizes the organization’s culture and becomes more friendly with the management, thus negatively affecting their monitoring and controlling tasks (Clements et al., 2018; Veltrop et al., 2018). Veltrop et al. (2018) further addressed that those outside directors who have weak ORID in longer tenure were less likely to be negatively affected by their tasks. Clements et al. (2018) extended their analysis and contended that in the long run, the negative effect of high ORID is noticeable in a small firm, lower number of directors on the board and directors who have fewer directorships. Zhu and Yoshikawa (2016) examined the ORID of government directors serving the Chinese State-Owned Enterprises (SOEs) and Non-State-Owned Enterprises (NSOEs). They discovered that the ORID influences the directors’ roles differently in terms of context. Directors are found to be resourceful in both types of organization. Nevertheless, their monitoring role is lessened in SOEs than in NSOEs when moderated with shareholder identification; in their case, it is the government.
Strong ORID also reflects strategic decisions among the first-son directors versus non-first son directors (Yoo et al., 2014) and family-founder directors versus lone-founder directors (Cannella et al., 2015), where each director are most likely to appoint similar types of directors, to maintain the values of their organizations as they perceive the organizations are an extension of themselves. Their ORID also reflects their business ventures choice. The first-son directors tend to associate their firm with the family business, thus resorting to a more autocratic and traditional style; they also tend to have limited business innovations due to the time spent within their closed-knitted family networks. In comparison, the non-first son directors associate their firms with a business opportunity thus are more open to business enhancements (Yoo et al., 2014). Likewise, Cannella et al. (2015) also found that both directors (the family-founder and lone-founder) strategically appoint external directors with similar experiences and serve longer to maintain their sense of belonging to the firms and prevent their untrustworthiness. Similarly, ORID’s strength helps to appoint new board members with similar demographics to ensure no issues arise related to the #MeToo movement to protect the organization’s image (Bednar et al., 2022). The result is in tandem with the proposition that the stronger the ORID, the higher the directors value the organizations’ essence.
Director Identification (DRID)
As directors are generally prescribed monitoring and resource provision responsibilities, directors with high DRID are inclined to perform the allocated tasks, such as monitoring organizational performance, providing significant resources, and engaging in strategic decisions. In addition, directors with high DRID value directorship as a prominent social position and optimally aim for role fulfillment. In contrast, directors with weak DRID tends to generalize among the allocated tasks.
Elms and Nicholson (2020) demonstrated that directors who identified themselves as directors show concern for the overall organization’s operation and tend to feel accountable for their role, resulting in the high acquisition of firm-specific knowledge. In contrast, directors identified as experts are more interested in contributing within their expert field only. However, outside directors who identify strongly with their role and perform oversight tasks to a high degree are likely to miss reappointment compared to outside directors who are conformist and prioritize only advisory tasks (Yoo & Koh, 2022).
Minority group directors such as female directors or non-citizen directors reflect highly on their role and strategically appoint new directors from similar gender or citizenship (Kaczmarek et al., 2012a). Chen et al. (2016) investigated how in-group female directors responded to proposed acquisitions. Following strong DRID, the female directors participate actively in board discussion, thoroughly scrutinize management proposals and provide strategic advice to avoid stereotypes (of being a female director). As a result, firms had fewer and small value acquisitions.
In similar tandem, Jonsdottir et al. (2015) investigated how male and female directors in Icelandic organizations navigated board oversight roles depending on the context salience (pre- and post-crisis). In a male-dominated board of pre-crisis and post-crisis firms, male directors with strong DRID prefer being the resource providers rather than monitoring or controllers. In contrast, female directors perform monitoring and resource providing roles. However, in a more gender-balanced board with a diverse background of post-crisis firms, male and female directors perform both roles encouragingly. Notably, female directors are typically excluded from informal and social discussions in male-populated boards, given that male directors self-identified as in-groups and highly valued informal networks. Due to a post-crisis and new gender-balanced boards, male and female directors tend to execute board oversight responsibilities following group diversity and insufficient informal and social groups.
Kaczmarek et al. (2012b) examined how faultlines influence the board tasks of directors in the UK largest listed companies. The identified faultlines are directorships (independent and non-independent directors), board tenure, various education, and financial qualifications. Resultantly, they detected that directors tend to perform the board task according to their faultiness, which created sub-groups among the directors. The identification with the sub-groups (in-groups) is higher than the overall DRID as the directors feel more self-assured within similar identities and create strong awareness of the out-group salience. Instead of a strong DRID that benefits the organization, asymmetrical decision-making by the directors is observed. Similarly, Vandebeek et al. (2021) and Shin and You (2023) proved that demographics faultlines such as family memberships, gender, race, and age also impaired the board members to work cohesively and focus to crucial issues such as CEO dismissal. Another similar study by Pirzada et al. (2017) found that board members in multi-ethnic companies who strongly identify with the role of directors within their sub-ethnic groups create disproportionate board diversity and hinder board independence, which impairs their ability to fulfill board tasks.
The recent study by Huang et al. (2022) revealed new perspectives that identification with the role of director among board members with similar Chinese surnames improves information sharing, which helps them in decision making and leads to improved investment efficiency. The results offer new approaches, since most of the previous literatures come to opposite conclusions. Another noteworthy study by Fitzsimmons and Callan (2022) discovered that contrary to possible gender bias, the male board chair with strong identification with the role of director manage gender diversity by encouraging the whole board members to act as a group of highly qualified professional rather than individuals, resulting more dynamic decision-making in the boardrooms.
CEO Identification (CEOD)
Arguably, CEOs possessed advantageous positions in advancing personal interests to increase agency costs (Fama & Jensen, 1983; Jensen & Meckling, 1976). As board directors were also CEOs from various organizations, strong CEOD potentially elevated agency cost and empathy among directors who understood boardroom criticisms, restricted vigilant monitoring tasks, and adhered to the CEO and management. In contrast, strong CEOD implied resourcefulness (particularly to CEOs) in predicting reciprocating deeds through in-group uniformity for positive group evaluations and higher commitments (Stets & Burke, 2000). Thus, it is suggested that the strength identification being a CEO has a positive relationship with resource provision, in contrast, a negative relationship with monitoring.
Jonsdottir et al. (2015) investigated CEOD between male and female directors in pre- and post-crisis within Icelandic firms revealed that male directors with strong CEOD are hesitant to question and challenge boardroom CEOs but inclined to provide aids and resources to the CEOs, unlike the female directors who perform both roles, although they demonstrate stronger monitoring role. Interestingly, both directors demonstrate monitoring and resource provision roles in male-dominated and gender-balanced post-crisis firms, although the male directors monitor less than the female directors. Additionally, Zhang et al. (2020) revealed that CEOD concerning surname ties increased agency costs. Surnames often reflected a sense of belonging and kinship and shared values and bonds. Accordingly, CEOs with shared surnames self-identified with the in-group category and reflected boardroom bias and favoritism, consequently deterring monitoring and controlling activities. In a similar vein, McDonald and Westphal (2010) discovered that CEOs who weakly identified with the corporate elite provide less strategic assistance to the focal CEO, especially if they lack friendship and are demographically different. In return, they also acquire less assistance from others.
Shareholder Identification (SHAR)
Under the SIT/IT propositions, directors with strong SHAR often predicted high accountability and obligations to perform fiduciary duties on behalf of shareholders. Zhu and Yoshikawa (2016) affirmed the propositions by demonstrating the positive SHAR-monitoring and resource provision role relationship for directors who are serving the NSOEs. Nevertheless, directors are less inclined to monitor SOEs. Additionally, Guerrero et al. (2017) investigated directors’ monitoring behavior in the Canadian Credit Union Corporations and revealed that directors with strong SHAR moderated consciousness and observed the importance of monitoring. While Melkumov et al. (2015) argued that although stronger SHAR improves the monitoring roles of directors in Finnish industrial organizations, yet the strategic participation tasks are weakened.
Stakeholder Identification (STAK)
Hillman et al. (2008) suggested that stronger STAK will contribute to a higher monitoring role because the directors are supposed to safeguard the stakeholder’s interest, for instance, to monitor the payment performance for the suppliers or to monitor the services rendered by the firms for the benefit of the customers. However, an inverted-U relationship is expected between STAK and the resource provision role. The stronger the STAK will lead the directors to exhaust the organization for the benefit of the stakeholders. Melkumov et al. (2015) specified in the findings that stronger STAK leads to higher networking and strategic participation tasks, while Adams et al. (2011) investigated the directors of Swedish public-traded firms and found that higher STAK contributes to strategic decisions that benefit the employee groups for employee representative directors.
Proposed Conceptual Framework
Following the antecedents and identifications of multiple identities and social groups discussed in the previous sections, we would like to propose a new conceptual framework that captures both aspects and provides a new and important lens for governance literature. A summary of all the reviewed articles are presented according to the antecedents, identifications to multiple identities and social groups, and board oversight roles in Table 6.
Summary of the Previous Studies.
As much as we would like directors to fulfill their oversight role based on the governance theories, the available empirical findings are contradictory. Thus, we believe that understanding this antecedent is important because it provides a new and broader perspective to explain why directors behave in certain ways. As individuals with multiple identities, and identification with various social groups, directors are prone to be affected by the salience of their identifications. We argue that directors unconsciously self-categorized themselves with certain groups to fulfill the needs of socializing and creating the sense of belonging within the boardroom. It gives them a distinctive assurance by grouping themselves with a person who shares similar values or characteristics such as being a minority director, female director, specific ethnic director (Chen et al., 2016; Jonsdottir et al., 2015; Pirzada et al., 2017), shorten the social distance (McDonald & Westphal, 2010; Zhang et al., 2020), and implies specific roles (Cannella et al., 2015; Elms & Nicholson, 2020; Yoo & Koh, 2022). By categorization, the directors would be predicted to behave benefitting the associated groups such as employee representative strategically recommending solutions benefiting the employees, recommending new directors from similar ethnic groups or surnames (Adams et al., 2011; Cannella et al., 2015; Pirzada et al., 2017).
We also posits that self-enhancement explains how directors perceive their position as a prestigious appointment, and it validates social comparison with out-group members. The positive image of being a director or being associated with an organization generally motivates them to acquire appropriate knowledge to fulfill their board responsibilities, increase their self-esteem to be associated with corporate elite, shared family surname or a similar vision group members (Clements et al., 2018; Golden-Biddle & Rao, 1997; Zhang et al., 2020). However, new outside directors with limited firm-specific knowledge and experience may have difficulty fulfilling their roles due to weak identification with new organizations. Over time, outside directors who identify strongly with their role are likely to acquire more firm-specific knowledge to perform better in their oversight role, which affects their self-enhancement. In contrast, outside directors who strongly identify with the organization are likely to become more involved with the management and conform more to existing norms and become ineffective in their oversight role. Thus, convergence or divergence identification to multiple identities or social groups are affected by the strength of it and could influence their oversight roles (Veltrop et al., 2018; Yoo & Koh, 2022).
We propose that the final antecedents for identifications to multiple identities and social groups is the out-group salience, where directors see themselves as members of the in-group and there are distinctive line separating them from the outside members. The out-group salience enhance the in-group favoritism and out-group depreciation among the directors, and could lead to stereotyping, prejudice, and discrimination among the directors. Female directors and minority directors are often subject to the out-group salience, and influences their director’s identity identification and affecting their oversight roles (Adams et al., 2011; Chen et al., 2016; Jonsdottir et al., 2015). In addition, out-group salience in the boardroom could potentially lead to sub-in-group salience, which usually impairs decision-making cohesion in the boardroom. Board members may be grouped together based on faultlines such as board independence, gender, age, ethnicity, education, and professional background, causing fragmentation that affects strategic decision-making (Kaczmarek et al., 2012b; Shin & You, 2023; Vandebeek et al., 2021). Figure 5 represents our arguments above.
Suggested conceptual framework.
Conclusion
The purpose of this study was to identify and map the evidence available on the current literature based on the influence of multiple director identities and social group affiliations on their roles as directors. Peters et al. (2020) describe this technique as an ideal way to determine the scope, coverage, and volume of relevant literature and to investigate new findings when the topic is still unclear. We found similar antecedents to identification to multiple identities and social organizations or groups among the board of directors are discussed. In particular, the three major antecedents are (1) self-categorization (i.e., how individuals unconsciously self-categorize themselves into social groups of perceived similar social identifications without the need to interact with or be accepted by the other members); (2) self-enhancements (i.e., to seek positive feelings about themselves, and enhance self-worth by being in-groups); and (3) out-group salience (i.e., how individuals see themselves as in-group members and compare themselves to the other out-group). These antecedents have been shown to enhance identifications and influence director behavior in relation to their board oversight roles.
The review suggests the need for new study approaches in board of directors that are appropriate to distinguish their behavior from different perspectives, through a framework that goes beyond the conservative approaches. The researcher found that the relationship between identification with multiple identities and social groups is not always positive, warranting more in-depth study. There is also limited study that focuses on identification with multiple identities or social groups. In addition, there is a need to expand and differentiate the types of directors (i.e., outside and inside directors, corporate and government directors, veterans, retired government directors); specify different types of board oversight roles; and examine the different institutional settings such as corporations, non-profit organizations, state-owned enterprises in different countries, especially in Eastern countries where their cultural influences could potentially have an impact. Before joining the board, individuals have different role identities, such as teachers, politicians, government officials, or musicians. Directors became new members of a different social group with new identities that could influence personal reactions to the newly assigned role after entry. Research on how the new role identity complemented existing roles could improve understanding of how directors perform their board oversight roles. In terms of practical implications, this review underscores the importance of understanding how directors manage their potential convergence or divergence identification with multiple identities and social groups, and how they manage expectations from their oversight roles. The review pinpoints the essential fundamental basis for director nomination and selection criteria.
Limitations
This scoping review examined articles related to multiple identities and identifications of board members and their implications for their board responsibilities. Of the 350 articles, only 24 relevant articles were found that directly addressed the focus of this research. Our search methodology could result in overlooking articles that did not directly describe the research question. We were also subject to our own interpretation during the data extraction and synthesis, which may have resulted in the omission of some relevant articles. Limited search engines were also employed for WOS and SCOPUS, albeit manual searches through specific publications (SAGE, Emerald Insight, Science Direct, Springer, and Taylor Francis). Following time and resource constraints, it was conceded that the study review could have been improved with search strategy expansions to another tier and the snowballing of citations from the 24 initially reviewed articles.
Footnotes
Declaration of Conflicting Interests
Funding
ORCID iD
