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ISBM Pulse: board of directors

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Should a B2B Firm Have a Customer on the Board of Directors? (Bommaraju et al.)

One way to gain insight into their customers’ needs is to invite customers to have a seat on the board of directors. Based on a sample of 329 B2B firms in S&P 900 firms over nine-year period (2007-2015), Bommaraju et al. (2019) concluded that having a customer on the board of directors enhances customer orientation of firms and provides unique insights, especially when demand uncertainty is high.

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Increasing Board Diversity

This article discusses a study that discerns between demographic diversity and cognitive diversity in the context of boardroom composition. It discusses the benefits and drawbacks of both types of diversity for board compositions, and offers recommendations on how to go about recruiting cognitively diverse board members. A key aspect discussed in this article is the difficulty of offering dissenting opinions in discussions in less diverse boards. Cognitive diversity helps to break that pattern. 

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Corporate Board Interlocks and New Product Introductions (Srinivasan, Wuyts, and Mallapragada)

Firm’s board interlocks represent bridges to valuable market intelligence that could be used in developing incremental innovations and thus, could lead to new product developments and introductions. By analyzing new product introductions of 30 firms over the period of 1997 to 2012, Srinivasan et al. (2018) have found that the strength of the positive relationship between board interlocks and new product introductions depends on the board composition.