Corporate Governance and R&D Strategic Decision Making

Lee-Anne C Johennesse (CTBC Business School, Tainan, Taiwan)
I Gusti Agung Musa Budidarma Budidarma (Klabat University)

East Asian Journal of Multidisciplinary Research (EAJMR)
Vol. 1 No. 3 (2022): April 2022

This study seeks to develop understanding from the literature the important relationship between corporate governance mechanism especially board characteristics and R&D strategic decision making. Some board characteristics, such as board size and independence are positively associated with firm performance. Directors of different ethnic, cultural backgrounds and different nationalities stimulate a firm to improve or develop new products. Older directors are less risk-tolerant than younger ones and invest less in risky R&D investments. The effect of board size on performance is negative and significant, while it has a positive and significant impact on R&D investment. Therefore, board characteristics are the considerable factors in affecting the effective R&D strategic decision making.