The purpose of this paper is to synthesize research on firm outcomes related to former government officials serving on corporate boards of directors. It also creates a new model for addressing gaps found in the literature.
Authors’ literature search for firm performance, as it relates to political directors, initially identified 94 publications; then narrowed to 75 germane for this review and categorized them into a literature review matrix. The research team coded each of the 75 articles on this topic inductively and organized the results thematically.
This semi-systematic review suggests that the benefits of former government officials serving on boards are inconclusive due to the way firm performance is operationalized across research contexts. In the vast number of studies about politicians on boards, firm performance was measured in a variety of ways, including cumulative abnormal returns, return on assets, market value and government funding and contracts.
The number of former politicians serving on corporate boards has substantially increased in the past three decades; thus, this topic warrants further study and review to better understand the outcomes for a firm. Research from international business, management, political science and public affairs journals provided a comprehensive examination of the literature across three interrelated areas: resource dependence theory, benefits of political board capital and corporate political activity.
Owing to previous service in an appointed or elected capacity at the federal level, former politicians may offer advice and add influence, provide new channels of communication and extend legitimacy for firms seeking to benefit from enhanced human and social capital in their corporate political activities and beyond.
The primary contribution of this semi-systematic review is in its explanation and synthesis of the ways that firm performance is measured when considering former politicians serving on boards. Additional contributions of this review also identify controls and topics to be considered in future studies examining politicians on boards, as well as identifying other areas ripe for future inquiry and ultimately contribute a conceptual model for further study.
