Director turnover in new venture boards: From homophilous to resource-contingent processes

Boards are a vital resource for early-stage ventures, offering advice, funding connections, and strategic guidance — especially when directors bring diverse expertise. Yet, as ventures grow and succeed, that diversity can erode. Our study of over 28,000 Swedish ownermanaged firms shows that directors whose expertise differs from that of the founder(s) are more likely to leave—not during hardship, but when the business is performing well. Interviews with several founders and directors further suggest that as ventures mature, they increasingly rely on internal capabilities and shift toward boards that reflect the founder’s evolving preferences. These dynamics lead to more homogenous boards over time, potentially narrowing the range of perspectives available in the board. For founders and policymakers, the findings highlight a key challenge: keeping diverse directors around not just at the start, but as the company scales.

Balachandran, C., & Wennberg, K. (2025). Director turnover in new venture boards: From homophilous to resource-contingent processes. Journal of Business Venturing, 40(5), 106523.