Over the past decades, a burgeoning body of research in the field of public administration has highlighted the critical role of top management teams within public organisations (Huang & Villadsen, 2023). Notably, this growing trend positions top managers as central figures in influencing public organisations' strategic direction and performance (Netra et al., 2022).
In the context of the public healthcare sector, a concept gaining momentum in the research examining the link between top managers and organisational performance is board capital (Kirkpatrick et al., 2017). It encompasses the everchanging bundle of knowledge, skills, and experiences that board members possess (i.e., board human capital), along with their ability to access critical information (i.e., board social capital) (Hillman & Dalziel, 2003; Kor & Sundaramurthy, 2009; Oh et al., 2006). Board human and social capital, as well as their combined influence on organisational outcomes, have been particularly studied in the private sector (Pérez-Calero et al., 2016; Tian et al., 2011). Nonetheless, regarding social capital, a peculiarity distinguishing top managers in the public sector from their private sector counterparts lies in their strong links with political actors (Huang & Villadsen, 2023). They work closely with politicians, engage in strategising, and fundamentally affect organisations’ performance (Leach & Lowndes, 2007). Therefore, having a closer political connection can function as a valuable intangible asset, granting access to crucial information channels and ultimately facilitating the achievement of specific organisational objectives.
Regarding public sector board capital, while considerable research has investigated the influence of specific human capital traits of top managers on organisational performance within public healthcare organisations (Kirkpatrick et al., 2017, 2023; Veronesi et al., 2013), the role played by the board social capital and its combined effect with human capital in public organisations remains under-investigated.
To fill this gap, the study draws on Board Capital Theory (Hillman & Dalziel, 2003), which posits that boards are not homogeneous and attention needs to be given to their demographics and the resources provided by the directors (Kirkpatrick et al., 2017). The underlying hypothesis is that the greater the board capital, the greater the desired outcome, such as performance, due to directors' access to superior information and processing capabilities (Sundaramurthy et al., 2014).
Therefore, the aim of this article is twofold. First, it seeks to identify what types of board human capital impact the different facets of public healthcare organisations' performance. Second, we aim to investigate whether and to what extent board social capital can moderate the impact of board human capital on public hospitals’ performance.
To achieve this objective, we analyse the financial and field-specific performance (Netra et al., 2022) of a sample covering almost the entire population of Public General Hospitals in Italy across the period 2018-2021. Italy represents a theoretically compelling case study that aligns with the paper's purpose. Italian public hospitals are typically run by a team (Kirkpatrick et al., 2013) consisting of a General Director (Direttore Generale), Clinical Director (Direttore Sanitario) and Administrative Director (Direttore Amministrativo), possessing different types of human capital. Furthermore, the Italian regional healthcare system is characterised by a pronounced political influence. This is exemplified, for instance, by the authority granted to Regional Presidents to appoint the General Manager of a Public Hospital. In turn, the General Director then appoints the other Directors, collectively forming the Top Management Team (Sarto et al., 2016).
Preliminary results suggest that the different types of board human capital have mixed impacts on the multifaceted performance dimensions. Moreover, board social capital moderates only specific aspects of the board's human capital, that is the sector-specific human capital on financial performance.
This article contributes to the existing literature in several ways. It addresses the recent calls for research into public sector TMT dynamics and their operations (Huang & Villadsen, 2023) by exploring the role played by board human and social capitals and their interactions on organisational performance. To the authors' best knowledge, this is the first study in public administration that analyses both elements of board capital and how they interact to impact different dimensions of organisational performance (Kirkpatrick et al., 2017). Furthermore, from a practical point of view, the study offers valuable insights into board composition, identifying elements of board capital that contribute to improved organisational performance. This information can be valuable for those responsible for board appointments, ensuring that board composition is in line with the organisation's expectations and objectives.
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