TY - JOUR
T1 - Fitting in as an outsider
T2 - a resource dependence theory approach to outside boards
AU - Ng, Desmond
AU - Khodakarami, Nima
N1 - Publisher Copyright:
© 2021, Emerald Publishing Limited.
PY - 2021
Y1 - 2021
N2 - Purpose: This study draws on resource dependence theory (RDT) to explain a board's governance function in the United States (US) nonprofit healthcare industry. Specifically, while various nonprofit research studies have appealed to agency theory (AT) to explain the monitoring role of an outside board, RDT offers an alternative explanation that emphasizes an outside board's resource gathering role. Design/methodology/approach: In drawing on the nonprofit GuideStar database, a fixed effect (FE) panel estimation was conducted on a sample of 230 US Non Profit Healthcare Organizations (NPHCOs). This panel estimation examines the relationship between the composition of an outside board and an NPHCO’s revenue and public support performance. Findings: A key finding of this study is that the composition of an outside board involving its' number, compensation and gender impacts an NPHCO’s revenue and public support. Research limitations/implications: This study shows that the composition of an outside board impacts an NPHCO’s ability to gain access to external resources. As NPHCOs face increasing pressure to seek external forms of revenue support, this study suggests that boards should favor a larger number, compensation and female representation of outside members. Practical implications: The composition of an outsider board can offer external sources of revenue support that lower the poor's requirements for financial assistance and thus affirm an NPHCO’s identity as a charitable organization. Originality/value: As an NPHCO’s identity as a charitable organization is dependent on serving the medical needs of the poor, an outside board not only introduces a resource gathering function that is absent in the monitoring explanations of AT, but that this resource gathering function is important to affirming this identity.
AB - Purpose: This study draws on resource dependence theory (RDT) to explain a board's governance function in the United States (US) nonprofit healthcare industry. Specifically, while various nonprofit research studies have appealed to agency theory (AT) to explain the monitoring role of an outside board, RDT offers an alternative explanation that emphasizes an outside board's resource gathering role. Design/methodology/approach: In drawing on the nonprofit GuideStar database, a fixed effect (FE) panel estimation was conducted on a sample of 230 US Non Profit Healthcare Organizations (NPHCOs). This panel estimation examines the relationship between the composition of an outside board and an NPHCO’s revenue and public support performance. Findings: A key finding of this study is that the composition of an outside board involving its' number, compensation and gender impacts an NPHCO’s revenue and public support. Research limitations/implications: This study shows that the composition of an outside board impacts an NPHCO’s ability to gain access to external resources. As NPHCOs face increasing pressure to seek external forms of revenue support, this study suggests that boards should favor a larger number, compensation and female representation of outside members. Practical implications: The composition of an outsider board can offer external sources of revenue support that lower the poor's requirements for financial assistance and thus affirm an NPHCO’s identity as a charitable organization. Originality/value: As an NPHCO’s identity as a charitable organization is dependent on serving the medical needs of the poor, an outside board not only introduces a resource gathering function that is absent in the monitoring explanations of AT, but that this resource gathering function is important to affirming this identity.
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U2 - 10.1108/JHOM-04-2021-0137
DO - 10.1108/JHOM-04-2021-0137
M3 - Article
AN - SCOPUS:85113750430
JO - Health manpower management
JF - Health manpower management
SN - 1477-7266
ER -