ABSTRACT
The attention to boards of directors in small firms is increasing. Traditionally they have been considered to be passive but boards in small firms are undergoing major changes. We test hypotheses of what makes boards in small firms active and allows them to contribute to value creation. Activity is seen in relation to board task involvement. Predictions based on agency theory, resource dependence theory and the resource-based view of the firm are used. We found strong support for hypotheses highlighting the use of the knowledge of the board members and various board maintenance tools, such as regular board evaluations, to increase board task involvement. Actionable advice to boards in small firms is provided.
