Are bonds blind? Board-CEO social networks and firm risk

Fan, Yaoyao; Boateng, Agyenim; Ly, Kim Cuong; Jiang, Yuxiang

doi:10.1016/j.jcorpfin.2021.101922

Cited by 24 publications

(16 citation statements)

References 125 publications

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“…We extend this study by testing whether the CEO network influences the board's decision to fire a CEO and further examine the combined effect of CEO network and performance on CEO turnover. Consistent with prior studies (Nguyen, 2012;Chahine et al, 2019;El-Khatib et al, 2021), we contend that CEOs with a large network size tend to be more powerful and influential, which increases entrenchment tendencies and reduces board monitoring (Fan et al, 2021). Thus, CEOs in such an influential position can have a negative and significant effect on board decisions (Chikh and Filbien, 2011;Fracassi, 2017, Chahine et al, 2019.…”

Section: Chief Executive Officer Network Sizesupporting

confidence: 86%

Firm performance and CEO turnover: the moderating role of CEO attributes

Chijoke‐Mgbame

Boateng

Mgbame

et al. 2023

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Purpose This study aims to examine the effects of firm performance on chief executive officer (CEO) turnover and the moderating role of CEO attributes on the firm performance–CEO turnover relationship. Design/methodology/approach Probit regressions were used to examine the relationship between various CEO attributes and CEO turnover and the moderation effect of firm performance on the CEO attributes–CEO turnover relationship. The sample comprises firms from the FTSE 350 Index covering the period 1999–2018. Findings The results indicate that firm performance negatively and significantly impacts CEO turnover. Further analysis reveals that selected CEO attributes, namely, CEO internal experience, CEO network size and CEO age, moderate the relationship between firm performance and CEO turnover. Specifically, CEO internal experience and performance combine to reduce the likelihood of CEO turnover. However, CEO network size and age when combined with firm performance increase the likelihood of CEO turnover. Practical implications The results imply that boards should pay more attention to CEO attributes in their decisions to hire and fire executive managers as these factors may affect a wide variety of firm outcomes. Originality/value This paper makes key contributions to the CEO turnover and corporate governance literature by providing evidence of key factors other than performance that can affect the CEO dismissal decision. Specifically, this study shows that CEO attributes such as CEO internal experience, CEO networks and CEO age far outweigh the importance of performance as a factor influencing CEO turnover decisions.

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Section: Chief Executive Officer Network Sizesupporting

confidence: 86%

Firm performance and CEO turnover: the moderating role of CEO attributes

Chijoke‐Mgbame

Boateng

Mgbame

et al. 2023

Self Cite

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“…This might be achieved through a system of relations disclosure at the hiring stage. According to Fan et al (2021), the 2002 Sarbanes–Oxley Act was introduced in the U.S. to improve corporate governance following several scandals involving CEOs’ reckless behaviour, which escaped the monitoring of boards. The authors, however, postulate that this Act is unsuitable because it only restricts financial and family ties or links.…”

Section: Discussionmentioning

confidence: 99%

Collusive behaviour, risk and performance of tourism firms

et al. 2022

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This paper aims to enrich social network and managerial powers theories by examining the effects of board-CEO friendship ties in tourism firms. Specifically, we focus on the association between the board-CEO social network ties (e.g. serving external boards together or sharing memberships at social organisations) and performance and risk-taking behaviour among tourism firms. The findings show that friendship ties between CEO and board members result in higher risk-taking, lower profitability and market values. In addition, professional ties (i.e. current and past employment) significantly impact tourism firms’ outcomes, whereas non-professional ties (i.e. education and other social organisations) do not. The findings prevail after controlling for the Covid-19 pandemic. However, friendship ties lead to better information sharing, resulting in more effective decision-making by board members.

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“…Specifically, degree centrality indicates the connection between the enterprise and other enterprises in the network. The higher degree centrality means the more individuals directly associated with the enterprise, which depicts the activity and visibility of the enterprise in interlocking directorate network (Fan et al, 2021 ). Therefore, given the practice of Dijkstra ( 1959 ) and Hochbergy et al ( 2007 ), we use degree centrality to measure the centrality of interlocking directorate network.…”

Section: Methodsmentioning

confidence: 99%

Research on the Influence of Network Position on Corporate Social Responsibility: Moderating Effect Based on Ownership Concentration

Yue

Guo

2022

Front. Psychol.

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Based on the social network theory and the institutional theory, this study examines the influence of corporate network position on corporate social responsibility (CSR), and further explores the moderating role of ownership concentration. Given the characteristics of CSR in different aspects, this study explores the relationship between corporate network position and economic CSR, environmental CSR, and social CSR from the two aspects of the centrality and structural holes of interlocking directorate network based on the data of 1,034 Chinese A-share listed companies from 2010 to 2019. The results show that the centrality and structural holes of interlocking directorate network have positive effects on the overall level of CSR, and the impacts on economic CSR and environmental CSR are stronger than that on social CSR. In addition, ownership concentration has a positive moderating effect on the relationship between corporate network position and CSR. These findings enrich the depth of research on CSR, clarify the influence of the characteristics of interlocking directorate network on CSR in different dimensions, and supplement the knowledge of existing research.

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Are bonds blind? Board-CEO social networks and firm risk

Cited by 24 publications

References 125 publications

Firm performance and CEO turnover: the moderating role of CEO attributes

Firm performance and CEO turnover: the moderating role of CEO attributes

Collusive behaviour, risk and performance of tourism firms

Research on the Influence of Network Position on Corporate Social Responsibility: Moderating Effect Based on Ownership Concentration

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