Corporate boards in high-tech firms

Abstract

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Board independence and firm performance in Southern Europe: A contextual and contingency approach

“…If the board is large, it is more independent in the sense that the CEO's influential power is diluted and it is more difficult for the CEO to be dominant (Muth & Donaldson, 1998). Larger boards may also provide advantages in terms of greater human capital (Pfeffer, 1972;Andrés & Rodríguez, 2011) and greater monitoring capacity (Jensen, 1993). However, oversized boards lead to increased costs associated with free-rider conflicts and problems related to coordination, control and flexibility in decision making, which negatively affect the effectiveness of board roles (Lipton & Lorsch, 1992;Jensen, 1993;Forbes & Milliken, 1999).…”

“…Contingency and contextual perspectives are needed to assess the relationship between corporate governance and firm performance to demonstrate that in some contexts, certain board designs may be recommended, but in other contexts, other designs may be more suitable (Crossland & Hambrick, 2007;Andrés & Rodríguez, 2011;Minichilli, Zattoni, Nielsen, & Huse, 2012).…”

“…The optimal corporate governance structure depends, among other factors, on the costs and benefits of governance practices, which vary between contexts (Boone, Field, Karpoff, & Raheja, 2007; Coles, Daniel, & Naveen, 2008; Linck, Netter, & Yang, 2008). Contingency and contextual perspectives are needed to assess the relationship between corporate governance and firm performance to demonstrate that in some contexts, certain board designs may be recommended, but in other contexts, other designs may be more suitable (Crossland & Hambrick, 2007; Andrés & Rodríguez, 2011; Minichilli, Zattoni, Nielsen, & Huse, 2012).…”