Acquisitions and CEO power: Evidence from French networks

Filbien, Jean-Yves; Chikh, Sabrina

doi:10.1016/j.jcorpfin.2011.06.007

Cited by 128 publications

(55 citation statements)

References 75 publications

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“…According to Model 3 in Table , CEO power is negatively and significantly related to R&D intensity. This finding does not support the view that CEOs with power induce faster decision making and that they consequently encourage R&D investments, but it is consistent with the agency argument that powerful CEOs may be more prudent and may avoid risky strategies (Chikh & Filbien, ; Pathan, ). One potential explanation for this finding is that powerful CEOs may exert different influences under different circumstances.…”

Section: Analysis and Resultscontrasting

confidence: 68%

Board Capital,CEOPower andR&DInvestment in Electronics Firms

Chen

2014

Corporate Governance

183

145

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Manuscript Type Empirical Research Question/Issue Building on resource dependence theory, this paper examines the effect of board capital and the moderating effect of CEO power on R&D investment. Research Findings/Insights Based on a panel of electronics firms in Taiwan, the results indicate that board capital (directors' educational level, directors' industry‐specific experience and interlocking directorate ties) has a positive effect on R&D investment and that CEO power positively moderates this effect. The empirical evidence suggests that when powerful CEOs are present, directors with human and social capital will devote more effort to providing valuable strategic advice and resources and thus will support R&D investment to enhance innovative capabilities. Theoretical/Academic Implications This study contributes to knowledge on corporate governance by bridging the gap in the relationship between board capital and R&D investment via an empirical inquiry into the influence of CEO power on a board's resource provision. The findings suggest that research aiming to elucidate the resource dependence role of board capital in shaping R&D investment should consider the potential moderating role of CEO power. Thus, this study should not only supplement the resource dependence literature by providing a more thorough understanding of the relationship between board capital and R&D investment but also delve into the black box of CEO‐board relations, an important topic within corporate governance research. Practitioner/Policy Implications This study suggests that when the boards of firms competing in innovation through R&D investment (e.g., electronics firms) search for new board members, they should consider the educational level, industry‐specific experience and interlocking directorate ties of potential directors and how those potential directors complement or reinforce the existing board in order to enhance their ability to obtain valuable strategic information and substantial resources that would facilitate better R&D investment decisions. Additionally, those R&D firms may be advised to have a combination of a powerful CEO and a board consisting of directors with more education, directors with industry‐specific experience and directors with interlocking directorate ties because the presence of a powerful CEO may motivate directors to provide ongoing advice and resources, leading to increased R&D investment necessary to enhance innovation capabilities.

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Section: Analysis and Resultscontrasting

confidence: 68%

Board Capital,CEOPower andR&DInvestment in Electronics Firms

Chen

2014

Corporate Governance

183

145

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“…Such CEOs may not be sensitive to firm performance or shareholder value, which is detrimental to interests of foreign investors. In a study on acquisitions in France, Chikh and Filbien (2010) find that CEOs, members of elite networks, are more likely to complete a acquisition deal in spite of a negative market reaction on acquisition announcement. Insensitive response of such CEOs towards firm performance may be a more serious concern for foreign investors in the case of hybrid market economies.…”

Section: Theoretical Framework and Hypothesesmentioning

confidence: 99%

Diversity of Institutional Investors and Foreign Blockholdings in France: The Evolution of an Institutionally Hybrid Economy

Goyer

Jung

2011

Corporate Governance: An International Review

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“…The conception of CEOs in the literature traditionally has been dominated by the importance of developing and sustaining networks for improving organizational effectiveness (Lakshman, ). For instance, CEO networks were explored to determine compensation arrangements (Brown, Gao, Lee, & Stathopolous, ; Horton, Millo, & Serafeim, ; Renneboog & Zhao, ) and the propensity for mergers and acquisitions (e.g., Chikh & Filbien, ). With respect to CEOs’ external networks, studies have found that peer‐to‐peer networking within a similar industry increased the economic value of the organizations (Chen et al., ; McDonald & Westphal, ).…”

Section: Literature Reviewmentioning

confidence: 99%

No Place Like the Frontline: A Qualitative Study on What Participant CEOs Learned From Undercover Boss

Cumberland

Alagaraja

2016

Human Resource Dev Quarterly

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Through an inductive study of 13 CEOs participating in the reality television program Undercover Boss, we unravel senior leaders’ interactions with frontline employees focusing on what CEOs learned about their employees, themselves, and the direct effects of these interactions on HRD policies and practices. These vertical interactions helped CEOs institute more responsive HRD policies and practices, and address operational deficiencies on the frontline. A core contribution of this study is the identification of vertical interactions between senior leadership and frontline employees as a meaningful concept for HRD professionals to pursue. We encourage vertical interactions between CEO and frontline employees as an important mechanism for improving communication and information exchange, as well as a learning opportunity for the CEO. HRD professionals can play an important role in developing such interventions that can facilitate high‐quality exchanges between senior leaders and lower echelon employees. These interventions can help foster a positive climate and enhance employee morale, as well as improve the efficacy of HRD policies and practices.

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Acquisitions and CEO power: Evidence from French networks

Cited by 128 publications

References 75 publications

Board Capital,CEOPower andR&DInvestment in Electronics Firms

Board Capital,CEOPower andR&DInvestment in Electronics Firms

Diversity of Institutional Investors and Foreign Blockholdings in France: The Evolution of an Institutionally Hybrid Economy

No Place Like the Frontline: A Qualitative Study on What Participant CEOs Learned From Undercover Boss

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