Aligning the Stars: How Technology Committees and Relevant Resources Drive Firm Innovation

Abstract

While many boards adopt technology committees to support firm innovation, the impact of such committees is largely unexplored. We draw on agency and resource dependence theories to suggest that technology committees can improve firm innovation (patenting and new product introductions). We further hypothesize that relevant committee expertise (technology and executive expertise) enhances the effectiveness of the committee, and that the benefit of committee expertise is strengthened when coupled with financial resource provision. Our results support our theorizing about the impact of technology committees—they positively impact new product introductions, although they had no impact on patenting. We also found that committee expertise enhances committee effectiveness, but only when accompanied by greater financial resources. We discuss the implications of optional board structures, such as technology committees and their composition, on firm innovation.