CEO Involvement in the Selection of New Board Members: An Empirical Analysis

Shivdasani, Anil; Yermack, David

doi:10.1111/0022-1082.00168

Cited by 1,108 publications

(611 citation statements)

References 22 publications

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“…These results are consistent with the study made by Andrade, Salazar, Calegário and Silva (2009), who found an average of 10 members, with a pattern deviation of 5.46 for the year 2004, and to the study of Gondrige, Clemente and Espejo (2012), which found an average size of 11 members in Brazil. The results are also similar to those found by Shivdasani and Yermack (1999), who found an average size of 11 members for companies in the USA. However, these figures indicate that in Brazil the companies have relatively larger size of the Board of Directors as compared to an average of 6.6 found in New Zealand (Prevost, Rao, & Hossain, 2002); 6.8 in Chile (Lefort & Urzúa, 2008); and 7.13 in Colombia (Pombo & Gutiérrez, 2011).…”

Section: Dualitysupporting

confidence: 90%

“…Besides, they generally have bigger Board of Directors, especially composed by great clients and local companies' leaders. This criterion was also adopted by Shivdasani and Yermack (1999). It is also justified since in Brazil these companies have different systems regarding accrual basis (Lopes & Tukamoto, 2007 The outliers effect was analyzed for the dependent variables Tobin's Q and ROE, through the interquartile range criterion (IQR), also used by Groβ (2007).…”

Section: Research Methodsologymentioning

confidence: 99%

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Do the Board of Directors Composition and the Board Interlocking Influence on Performance?

Vesco

Beuren

2016

BAR, Braz. Adm. Rev.

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This study analyzes the influence of composition of the Board of Directors and their social relations (board interlocking) on performance of Brazilian companies. A descriptive study based on documentary research was conducted with a total of 1,163 companies' observations and 18,119 standardized observations regarding directors. Simultaneous equations were applied to the data analysis. The survey results showed that, regarding the influence of composition of the Board of Directors on the performance of the companies, among variables used to identify its characteristics, that some showed endogeneity. Among the characteristics of the Board of Directors, the duality of the board was exogenous when comparing market performance (Tobin's Q) and the outsiders were also exogenous for internal performance (Return on Equity). Thus, the duality of the board is more influenced by the specificities of each company than by the market value of the companies. The characteristic outsiders are more influenced by the institutional environment than by the ROE. The practice of board interlocking proved to be insignificant in relation to the market value, indicating natural selection. Therefore, it is not possible to infer that the board interlocking can increase the dependency of the management, compromising the role of monitoring. Also, it is not possible to state that better positioned and central companies in the corporate relationships network show better performance.

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Section: Dualitysupporting

confidence: 90%

Section: Research Methodsologymentioning

confidence: 99%

Do the Board of Directors Composition and the Board Interlocking Influence on Performance?

Vesco

Beuren

2016

BAR, Braz. Adm. Rev.

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“…According to the Agency theorists, CEO Duality creates imbalance in corporate power distribution as heavy concentration of management and control resides with one person which tend to jeopardised board effectiveness (Eisenhardt, 1989). This imbalance makes it inevitably difficult for the corporate board to provide appropriate monitoring or even institute punitive measure against erring CEO due to absence of independence (Jensen and Fama, 1983;Brickley et al, 1997;Keller et al, 2006;Dalton and Kesner, 1987;Shivdasani and Yermack, 1999;Goyal and Park, 2002;Wan and Ong, 2005;Morck et al, 1987;Dayton, 1984). The integrity of information available to board is compromised with CEO duality due to asymmetric as CEO determines what kinds of information are brought to board attention.…”

Section: Ceo Dualitymentioning

confidence: 99%

Board Dynamics and Corporate Performance: Review of Literature, and Empirical Challenges

Lawal¹

2011

IJEF

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This paper is an attempt to conduct a comprehensive survey of relevant literatures in respect of the relationship between board dynamics and firm performance. The investigation reveals that equivocal findings still dominates most of the previous studies on key board dynamics such as Size, composition, CEO Duality and Diversity amongst others. While the need to assess the connection between board characteristics and corporate performance would for a longtime remained a legitimate and interesting area of investigation, the paper recommend that the researchers avoid mistakes of the past. These include over reliance on singular theory, the use of lone performance measure and most importantly the assumption of express relationship between the two variables. The use of more purposeful process based approach that identifies the cause effect of the relationship would be of tremendous benefit to this vital field of study.

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“…Supporting this argument, Shivdasani and Yermack (1999) provide evidence suggesting that when the CEO is involved in nomination process, the directors that are chosen are the ones, who are less likely to monitor effectively. The researchers show that in such a nomination process, a lower fraction of independent directors are selected and the likelihood of an independent board is lower.…”

Section: Wwwccsenetorg/ijefmentioning

confidence: 90%

Characteristics of Members of Board Committees at Borsa Istanbul

Arioglu

Tuan

2014

IJEF

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In this study, we investigate the characteristics of members of audit, risk and governance committees of boards in public firms quoted at Borsa Istanbul, with an emphasis on their educational backgrounds, professional expertise, independence, busyness, share ownership and managerial positions. Our findings show that a lower percentage of members of these committees, compared to non-members, serve as the chairmen of boards. In addition, a higher percentage of them are independent, have advanced educational degrees, and are professional experts such as accounting experts, lawyers, professors. The findings also show that members of these committees own fewer shares and serve on fewer outside boards. Interestingly, the findings show that a very low percentage of directors that do not serve on these committees are independent directors, leading to the question of what the underlying motivation for the inclusion of independent directors on boards of directors is.

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CEO Involvement in the Selection of New Board Members: An Empirical Analysis

Cited by 1,108 publications

References 22 publications

Do the Board of Directors Composition and the Board Interlocking Influence on Performance?

Do the Board of Directors Composition and the Board Interlocking Influence on Performance?

Board Dynamics and Corporate Performance: Review of Literature, and Empirical Challenges

Characteristics of Members of Board Committees at Borsa Istanbul

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