The Relationship of Board Composition to Company Performance in Small and Medium Sized Family Firms: A Theoretical Model

Prior research has investigated the role of board composition and company performance in larger firms. Little research, however, has investigated this relationship in smaller, family owned firms. This research examines the literature on board composition and strategic decision making, and presents a theoretical model for board composition and firm performance in small and medium sized family firms. Specifically, this paper proposes that an independent board of directors will be positively related with performance in these small and medium sized firms. A proposed methodology for investigating this model and implications are also discussed.