CORPORATE ENTREPRENEURSHIP AND CORPORATE GOVERNANCE: AN EMPIRICAL ANALYSIS

This thesis focuses on the relationship between corporate governance and corporate entrepreneurship activities in firms. Existing research examines aspects of governance and entrepreneurship without any consideration of the links that may exist between these two drivers. This study seeks to address this gap. Practicing corporate entrepreneurship has become an important element to competesuccessfully in today's competitive environment. However, an over emphasis of entrepreneurship could also lead towards negative implications such as high risk as the outcome is unknown and involves an element of uncertainty which could have negative implications on the company. On the other hand, organisations are also required to practice robust corporate governance in order to enhance greater transparency and accountability. Although the benefits of corporate governance are well acknowledge, there is the potential for a tension to arise between these two corporate imperatives; an organisation is required to practise governance and control whilst simultaneously engaging in entrepreneurial activities. It is argued that by placing emphasis on control and accountability, an organisation's entrepreneurial activities may be curbed. It is in this context that the relationship of corporate governance and entrepreneurship is examined. A mixed method approach (pragmatic) was employed for testing propositions, triangulating and elaborating upon the research findings. Two qualitative studies were undertaken to ascertain the nature of corporate entrepreneurship and corporate governance, as they are generally perceived. This, along with other evidence, enabled the development of a corporate entrepreneurship index and a corporate governance index. A quantitative analysis was then undertaken, based on the FTSE 100 companies to ascertain the nature ofany relationship between the two indices. Qualitative case studies were then used through an interview process to gain a deeper understanding of the issues involved. Certain aspects of corporate governance control mechanisms such as board size, frequency of board and sub-committee meetings were found to impact negatively on entrepreneurial activities whilst others, such as dominance of institutional block holders had a positive impact. Also, it was found linking annual bonuses to performance criteria exerts a positive effect on entrepreneurship. These findings indicate that whilst certain aspects of governance may have negative implications for entrepreneurship, others may impact positively. In addition, there are practices that an organisation could implement thatmaypositively stimulate entrepreneurial activity and thus serve to reduce the negative effects ofgovernance