An investigation into how social capital influences board effectiveness within the context of Scottish football

Abstract

This study examines how social capital influences board effectiveness within the context of Scottish football. While traditional corporate governance research has focused on board structures, recent work considers this approach too simplistic. Contemporary research now points towards board processes – meaning the nature and quality of directors’ social interactions – as the primary antecedent of board effectiveness. However, the process of how different kinds of board processes influence board effectiveness remains unclear. The present study addresses this gap in the literature by applying social capital theory to Scottish football club boards. Specifically, this study adopts Nahapiet and Ghoshal’s (1998) three-dimensional conceptualisation of social capital, which is viewed as an ideal lens for research focused on organisational dynamics. Further, and in contrast to other definitions, this lens is appropriate because it proposes social capital to have internal and external facets. Consequently, this mirrors the internal and external functions of boards. Scottish football is regarded as a pertinent context in which to extend governance research. Governance failings and insolvency have been common among Scottish football clubs, and therefore exploring board effectiveness in this setting could provide valuable insights for theory and practice. This research adopts a multiple-case study design. Three clubs (Heart of Midlothian FC, Raith Rovers FC and Dunfermline AFC) were purposively selected in accordance with set criteria to achieve replication logic and facilitate cross-case comparisons. In total, 28 semi-structured interviews were conducted with 25 individual club directors and representatives of key institutions (such as the Scottish Football Association). The interview data are supplemented by extensive documentary material including club documents and online supporter discussion forums. The interpretivist perspective underpins the research, and the template analysis approach is used to analyse the data. The study makes practical and theoretical contributions. From a practical perspective, it extends knowledge of board effectiveness and its antecedents by illustrating how features of social capital such as social connections, trust and shared values facilitate board role performance and board dynamics in Scottish football clubs. Second, it makes a theoretical contribution by highlighting how the nature of the interaction process between social capital dimensions is influenced by contextual factors.