Governance Structure in High-Growth Firms

21 Pages Posted: 1 Nov 2013 Last revised: 7 Nov 2013

See all articles by Gro Ladegard

Gro Ladegard

Oslo School of Management

Casper Claudi Rasmussen

Norwegian University of Life Sciences (NMBU)

Date Written: October 30, 2013

Abstract

This paper addresses the structure of governance systems in high-growth firms.

We propose that high-growth firms have specific characteristics and challenges that may warrant other governance structures than are recommended in the governance codes. In the present study, we compare a sample of 865 high-growth firms in Norway with a statistically representative sample of 396 SMEs in Norway, on several general characteristics as well as on their governance structures. The findings show that high-growth firms do have specific characteristics that distinguish them from other small and medium sized enterprises. The high-growth firms in our sample are significantly younger and smaller than the average SME, and their growth intentions are significantly stronger. They also face greater difficulties in recruiting sufficient qualified personnel. Further, the high-growth firms differ in their governance structure on several aspects. They have more owners than the average SME, and in 81.4% of the high-growth firms the founder has the three roles of owner, director on the board, and a top management position simultaneously. The results also show that the high-growth firms have significantly different board compositions than the SMEs. The boards in this sample are larger, the proportion of independent directors on the boards is larger, and the boards are more gender diverse (21% women) than in the SME sample. We discuss these findings in light of general OECD governance principles, and whether high-growth firms might represent some "best practice" examples for SMEs, considering their successful growth histories.

Keywords: corporate governance, high-growth firms, board composition, founder duality

Suggested Citation

Ladegard, Gro and Rasmussen, Casper Claudi, Governance Structure in High-Growth Firms (October 30, 2013). Available at SSRN: https://ssrn.com/abstract=2347288 or http://dx.doi.org/10.2139/ssrn.2347288

Gro Ladegard (Contact Author)

Oslo School of Management ( email )

Norway
0047 92408441 (Phone)

HOME PAGE: http://www.groladegard.no

Casper Claudi Rasmussen

Norwegian University of Life Sciences (NMBU) ( email )

As
As
Oslo, Norway, 1432
Norway

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