The board of directors’ role in initiating innovation in the Classical Industry

This research focuses on the paradoxical roles of Boards of Directors: maintaining a focus on evaluation and risk management on the one hand and fostering innovation and entrepreneurial ventures within an organization on the other hand. While most existing research on organizational innovation primarily focuses on employee and top management team skills in adopting technology and driving profitability, this study emphasizes the influence of the upper echelon – specifically, the board chair and board members – on adopting innovation strategies. We explore the extent to which Boards of Directors collaborate with and support the CEO in initiating technological advancements, business models, and product offerings, specifically within the context of the classical manufacturing industry. Additionally, the research explores the role of board members in promoting open innovation, including integrating external knowledge and expertise as novel sources of knowledge and capabilities for the organization. Our research sample consisted of 258 participants: 75 Board members, 97 CEOs, and 86 Senior managers from 99 production factories of the kibbutz industry who responded to the research questionnaire. The study found a positive and significant relationship between Board members’ diversity and Board Promotion of Innovation. Furthermore, a linear regression analysis confirmed that the Board Promotion of Innovation positively and significantly impacts the Product Innovation Assimilation. Using Hayes's (2017) Process Model, we found that ambidextrous CEOs moderated the relationship between Board Promotion Innovation and Firm Innovation Performance.