Does the Corporate Lifecycle Affect Board Structure? International Evidence

ABSTRACT Research Question/Issue This paper examines the impact of corporate lifecycle on board structure offering insights into how firms evolve and adapt their governance practices over time and across different institutional environments. Research Findings/Insights Based on a sample of 23,530 firm‐year observations from 51 countries over the period 2013–2021, we find that corporate lifecycle has a positive effect on board gender diversity and board tenure. This positive effect is more pronounced in firms operating in countries with stronger investor protection and in firms facing higher external market discipline. However, the corporate lifecycle has a negative effect on the proportion of board members with financial or industry expertise. This negative relationship turns positive when investor protection strengthens, and market pressure intensifies. The results also show that gender quota adoption positively influences the association between corporate lifecycle and board gender diversity. Theoretical/Academic Implications The findings support lifecycle and legitimacy theory perspectives suggesting that organizations face different challenges and legitimacy pressures at various phases of their lifecycle. To overcome those challenges, companies are likely to adjust their internal governance structures accordingly. The results also provide support for regulations on gender quotas in the boardroom. Practitioner/Policy Implications Our results suggest that in the early stages, a company considers appointing financial or industry skilled directors who offer essential knowledge for corporate growth and success. As the company matures, the focus shifts toward bolstering corporate legitimacy and gaining social acceptance. This transition indicates a shift toward holistic governance, where the company prioritizes the representation of stakeholders' interests, both in substantive and symbolic ways.