New director selection during growth in family-influenced and lone founder firms: An identity fit perspective

Drawing on the identity fit perspective in organizational identity research, we investigate changes in new director selection patterns for family-influenced (i.e., family identity) and lone founder (i.e., entrepreneurial identity) firms experiencing growth. We collect over 7000 observations of new director placements from 2001 to 2014 and find that both family-influenced and lone founder firms tend to decrease the selection of new directors with similar firm-type board experience as firm size grows and firm performance deviates from that of similar firms. Lone founder firms also decrease the extent to which they hire new directors with previous board experience in lone founder firms following the appointment of a nonfounder CEO. We conclude that while family-influenced firms often use new director selection decisions to maintain the fit between family and firm identity, firm growth creates challenging conditions that threaten family-firm identity maintenance.