Size and Composition of Corporate Boards of Directors: The Organization and its Environment

The board of directors is considered as an instrument for dealing with the organization's environment. In a random sample of eighty nonfinancial corporations, elements of board size and composition are shown to be systematically related to factors measuring the organization's requirements for coopting sectors of the environment.' Organizations that deviate more from an empirically estimated optimal board structure equation are likely to perform more poorly, compared to industry standards.