Alliance Manchester Business School, U. of Manchester, United Kingdom
We develop a novel power-centric model that examines antecedents and boundary conditions for independent directors in venture boards. Using 989 U.S. biotech and pharmaceutical ventures from 2010 to 2020, we find that the structural power gap between inside directors and VC directors is negatively associated with venture board independence. We also find that VC directors’ intra-group conflict through tenure variance would weaken the impact of VC directors’ power over inside directors on venture board independence, while VC ownership power through investment would strengthen it. These results offer a deeper theoretical understanding of venture boards.
