PhD scientists in the boardroom : the innovation impact

Purpose: The purpose of this paper is to evaluate the impact that PhD scientists serving on the board of directors of firms conducting hard science have on the R&D-based innovative performance of the firm. Design/methodology/approach: The research hypotheses are built upon extant theory, and they are tested using two-stage least squared regression that control for the endogenous nature of board composition. Results are robust to alternative specifications. Findings: This analysis shows that firms with higher numbers of PhD scientists on the board generate superior innovative output and more efficient monitoring; PhD board members with denser professional networks are more valuable as board members. Practical implications: This paper provides practical advice to innovative firms on how to create a governance process that simultaneously improves monitoring and boosts the innovative performance. Originality/value: This study is the first one to suggest that innovative firms can improve R&D monitoring and boost innovative output at the same time, and the first to investigate the role that PhD scientists can serve on the board of firms engaging in hard science.