Board capital and strategic turnaround: A longitudinal case study

We conducted a 10-year (1997-2006) longitudinal case study of a publicly traded global transportation company (Bombardier Inc.) to examine the dynamic relationships between board capital, strategy and organizational environment. We find various links between four dimensions of board capital and changes at three strategic levels: institutional, corporate and business. Our findings indicate that Bombardier adjusted to the changing contingencies of the external environment by changing the resources provided by the Board of Directors-board human and relational capital-and by adopting specific strategies, which in turn further impacted board capital. Our study contributes to the corporate governance literature on board service tasks. We saw significant changes in board human and relational capital over the period of analysis, even though board independence remained constant. Our findings invite investors and policymakers to consider the requirements for an effective service task when nominating board members and developing board rules.