Board Directors as Elites in the Context of International Joint Ventures

Forbes and Milliken (1999: 493) characterise boards of directors as ‘large, elite and episodic decision making groups that face complex tasks pertaining to strategic-issue processing’. From an individual director perspective some scholars have argued that individuals join boards for financial remuneration, prestige and contacts that may prove useful in the future and to promote upper-class cohesion creating a business elite (Useem, 1984; Zajac 1988). For example, according to the reputation hypothesis, entering in the corporate elite has a positive impact on firms’ value (Phan et al., 2003). As a group, it is up to the corporate elite to ensure good corporate governance. At the same time, the concentration of corporate control in the hands of relatively small, often homogeneous and closed corporate elites has long been recognised as a democratic difficulty for capitalism.