Management & Marketing (2010) Vol. 5, No. 1, pp. 3-18. BOARD COMPOSITION, PROCESS, AND ACTIVISM: EVIDENCE WITHIN AMERICAN FIRMS Scott SCARBOROUGH University of Toledo, USA Jeffrey J. HAYNIE, Christopher SHOOK Auburn University, USA Abstract. This study provided an empirical test of the effects of compositional and process variables on board activism. The attributes examined were functional area knowledge, independence, duality, and effort norms. The findings from this study provided support for the positive relationships between both functional area knowledge and effort norms and board activism. The strong relationship between effort norms and activism indicates the importance of process variables in board research and the need for additional research using process variables in a board context giving further insight into board activism and governance. Additionally, the relationship between functional area knowledge and board activism highlights how boards ability to meet cognitive demands is critical in board performance. These results as well as future research directions are examined in the discussion. Keywords: board activism, board governance, board attributes, strategic management. 1. Introduction Management researchers have made significant contributions to board research incorporating both agency and resource dependence perspectives (e.g., Daily & Schwenk, 1996; Forbes and Milliken, 1999; Rindova, 1999; Sonnenfeld, 2002). The premise behind agency theory is that there are two primary actors in every corporate activity, the principal and the agent (Eisenhardt, 1989). Because the agent does not always act in alignment with the interests of the principal, the principal must monitor the behaviors of the agent. Agency theory thus indicates the need for board governance because of the self-interested nature of management. Another perspective prevalent in the board literature is resource dependence theory. According to resource dependence theory, organizations are dependent upon resources and these dependencies influence organizational decisions (Pfeffer & Salancik, 1978). Under this perspective, outside members provide access to valuable resources needed by the firm indicating the importance of board independence (e.g., Stearns & Mizruchi, 1993). Both of these perspectives guided the development of various complex models of board governance, including constructs from the top management team (TMT) and group decision-making literatures and intermediate-stage causal links that mediate the relationship between directors’ characteristics and firm performance (e.g., Daily & Schwenk, 1996; Forbes and Milliken, 1999; Rindova 1999; Sonnenfeld, 2002). Zahra and Pearce (1989) reviewed empirical research on board of directors and their effect on firm performance. The bulk of this research focused on relating factors such as board independence and duality to firm performance. Because their review produced