Corporate Governance & Organization Life Cycle: The Changing Role ...

review, with regard to the board as an institution with specific functions, thus positioning it within the organizational context, is refined in section 1.3, and resource dependence, institutional, and social network theories are reviewed as relevant to this understanding. In section 1.4, the theoretical review of single boards is expanded to scenarios where directors work with multiple boards, focusing on the interlock phenomenon both in the United States⁶and elsewhere. The study of multiple board scenarios in different cultural settings provides interesting insights regarding each single board’s contribution to a firm because interlock works essentially as a “leverage mechanism” that can amplify existing board functions. Initially, academic research on interlocks focused on the U.S. context. However, subsequent research on the existence and pervasiveness of the interlocking mechanism in different cultural and political contexts (Carroll & Alexander, 1999; Yeo, Pochet, & Alcouffe, 2003) suggested that, in addition to its monitoring and advising functions, one of the key functions of the board was to provide an interfacing mechanism that facilitated the flow of fundamental sources of power, such as information, financial resources, and influence. Depending on the organizational environment and the phase of the life cycle, certain resources may have been needed and employed more than others.

The latter part of section 1.4 builds on the previously discussed framework. The analysis of interlocks adds depth to the examination of the three functions (monitoring, advising, and interfacing to secure resources), particularly with respect to interfacing, which is expanded and becomes a mechanism to procure not only resources (financial or otherwise) but also information and influence. In Canada, interlock is considered an enhancement mechanism that provides assistance to the board in its interaction with the environment. Therefore, as part of the organizational structure, the board may need to transform its composition and structure to help the firm cope with a changing environment that has varying degrees of uncertainty and involves different sets of issues. In addition, the organization itself may experience contextual changes, as reflected in phases of its life cycle. These phases are analyzed in section 1.5. Board performance may prove to be optimal when there is