The Impact of Executive Board Member Characteristics on Firm Innovation: The Roles of R&D and Organizational Tenure

Much of the current thinking on board composition suggests that the presence of executive directors as internal board members is detrimental to a firm’s innovation. Our intention in this research paper is to grant greater nuance to this relationship. Specifically, we examine whether factors that give an executive director greater knowledge regarding the firm’s innovative capabilities (involvement in R&D and their organizational tenure) act to influence firm-level innovation. Using a dataset of 300 firms from three R&D intensive industries spanning a 6-year period, we find that these two characteristics serve to offset the negative effects of executive directors on innovation. Our findings offer enhanced guidance to scholars and practitioners who are concerned about the presence of insiders on boards of directors.