Impact of board maturity on sustainability: An institutional perspective

Grantham Scholar Mahdi Divandari is a researcher in the Operation Management and Decision Science (OMDS) division of the Management School. 

The project

I have used institutional theory (originally a sociological theory) to draw up a map of organisational change within the context of the society. As such, the board of directors can be considered an organisational hotspot, which filters societal values through the organisation. As such I define the “maturity of the board” as the extent of institutionalisation of a board (i.e., absorption of societal values). I hypothesise that a more mature board would naturally result in a more sustainable performance (according to that very same society – in this research United States); and that formal structures (i.e., ownership structure, governance and agency quality of the firm) are moderating factors rather than leading drivers.

I have my preliminary findings at the moment. Though not final, the model seems to hold. It also points towards a discrepancy in the institutionalisation of sustainability, hinting an overload of coercive and mimetic factors rather than a cultural shift.