PurposeThe purpose of this paper is to investigate the effects of prior firm performance on board composition and governance structure.Design/methodology/approachA total of 90 companies listed on National Association of Securities Dealers Automated Quotations were used for this study. Hypotheses were tested using both general linear regression and logit regression analyses.FindingsThe results showed that prior negative change in firm performance was significantly related to a decrease in the overall number of directors and a decrease in the number of outside directors.Research limitations/implicationsThe sample size used in this study was relatively small and the focus was on small to medium‐sized firms, so the results found here may not apply to firms larger than those used in our sample.Practical implicationsDirectors may want to consider the implications for governance practices found in this study, specifically, whether smaller boards with fewer outsiders are appropriate following periods of performance decline.Originality/valueThis study is one of the first to examine the effects of trends in prior firm performance on board composition and chief executive officer duality.

Extending the literature on CEO succession, we found that a succession event together with a change in top management related positively to strategic change toward greater internationalization. In a study of 160 Taiwanese firms, we found relationships between firm performance, outside CEO appointment, change in firm's top management team (TMT), and the degree of a firm's internationalization. Moreover, the positive association between a post succession TMT structural change and degree of internationalization was observed only in those cases where dissimilarity between CEO and chairperson (with respect to educational degree and overseas education) was low. The implications of these findings for scholarship and practice are discussed. Copyright © 2011 ASAC. Published by John Wiley & Sons, Ltd.

Group behavior research suggests that differences among group members cause individuals to interact in ways that may enhance or weaken group performance. Dissimilarities among members may cause the development of negative attitudes about work groups, leading to dysfunctional performance. Network theorists have found that demographic factors influence individuals' tendency to form network ties within their organizations. This article bridges these findings, examining whether work group demographic differences affect a group member's tendency to form network ties with other group members or outside the work unit. In a study of 49 employees at a Midwest consulting firm, individual differences in sex and tenure predicted whether employees interacted within their work groups on advice and friendship dimensions, respectively, but did not affect the establishment of working relationships. Increased group heterogeneity tended to reduce the effect of demographic differences. Longer-service men were more likely to forge relationships within the work group than were short-term or female workers.