Integration of Micro and Macro Studies in Governance Research: CEO Duality, Board Composition, and Financial Performance

Dalton, Dan R.; Dalton, Catherine M.

doi:10.1177/0149206310373399

Cited by 236 publications

(218 citation statements)

References 41 publications

(52 reference statements)

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“…Accordingly, our results show that the proportion of domain expert directors was related to a vital organizational outcome-survival or failureeven after accounting for the influence of professional, tenure, and gender diversity on boards. Although often overlooked in prior research (Dalton et al, 1998;Dalton & Dalton, 2011;Forbes & Milliken, 1999), we suggest that the presence of domain experts is a potentially critical factor in understanding the consequences of board composition on organizations.…”

Section: Discussionmentioning

confidence: 84%

“…To date, although a voluminous literature has focused on the composition of boards, it has revealed relatively few consistent links between board composition and corporate financial health (Dalton et al, 1998;Dalton & Dalton, 2011). Our study introduces the relative representation of domain expert directors versus non-expert board members as a key aspect of board composition.…”

Section: Discussionmentioning

confidence: 99%

“…Given the importance of effective corporate boards in governance and strategic decision making, it is imperative to understand which dimensions of boards are most consequential and how exactly those dimensions matter for organizational outcomes (Dalton & Dalton, 2011;Forbes & Milliken, 1999;McNulty, 2013). To date, although a voluminous literature has focused on the composition of boards, it has revealed relatively few consistent links between board composition and corporate financial health (Dalton et al, 1998;Dalton & Dalton, 2011).…”

Section: Discussionmentioning

confidence: 99%

“…Given the importance of boards, the question of how board composition affects corporate performance and survival has been an enduring concern for organizations (PricewaterhouseCoopers, 2014) and organizational scholars (Baker & Powell, 2009;Dalton & Dalton, 2011;McNulty, 2013;Stiles, 2013) alike. Existing research in this area has examined how the professional backgrounds and company affiliations of directors influence a firm's financial performance (Fogel & Geier, 2007;Pearce & Zahra, 1992;Pfeffer, 1972Pfeffer, , 1973Rosenstein & Wyatt, 1990) and ability to avoid bankruptcy (Chaganti, Mahajan, & Sharma, 1985;Daily & Dalton, 1994;Platt & Platt, 2012), though this large amount of literature has uncovered few consistent and unequivocal links between board composition and a firm's financial health (Dalton, Daily, Ellstrand, & Johnson, 1998;Dalton & Dalton, 2011).…”

mentioning

confidence: 99%

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When Experts Become Liabilities: Domain Experts on Boards and Organizational Failure

Almandoz

Tilcsik

2016

AMJ

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How does the presence of domain experts on a corporate board-directors whose primary professional experience is within the focal firm's industry-affect organizational outcomes? We argue that under conditions of significant decision uncertainty, a higher proportion of domain experts on a board may detract from effective decision making and thus increase the probability of organizational failure. Building on exploratory interviews with board members and CEOs, we derive hypotheses from this argument in the context of local banks in the United States. We predict that the greater the level of decision uncertainty-due to rapid asset growth or operation in less predictable markets-the stronger the relationship between the proportion of banking expert directors and the probability of bank failure. Longitudinal analyses of 1,307 banks between 1996 and 2012 support this prediction, even after accounting for both the overall level of professional diversity among directors and banks' different propensities to have an expert-heavy board. We discuss implications for the key dimensions of board composition, the conditions under which the professional background of directors is more or less consequential, and the mechanisms whereby board composition affects organizational outcomes.

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Section: Discussionmentioning

confidence: 84%

Section: Discussionmentioning

confidence: 99%

Section: Discussionmentioning

confidence: 99%

mentioning

confidence: 99%

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When Experts Become Liabilities: Domain Experts on Boards and Organizational Failure

Almandoz

Tilcsik

2016

AMJ

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“…But the evidence is mixed (Boyd, 1995;Dalton & Dalton, 2011). Think of Jeffrey Skilling's Enron, or Bernie Ebbers' WorldCom.…”

Section: The Case Of Trump Foucault and Pre-modern Governancementioning

confidence: 99%

First and Second Drafts of History: The Case of Trump, Foucault and Pre-Modern Governance

Nordberg

2017

SSRN Journal

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ABSTRACT. How do we, as scholars -social scientists and historians -respond to momentous contemporary events? Our instincts urge caution, but the events demand action. While blogs and other media offer some paths, they can veer too much towards the snap judgments associated with bad journalism and simplistic representation. This paper consists of two essays, one embedded in the other, that challenge us to think differently about news, social science, and history. The impetus comes from an attempt to make sense of the first, muddled weeks of the new Trump administration in Washington. With reference to Foucault's concept of governmentality, it reflects on how the CEO-in-Chief at the White House seemed to invoke a form of pre-modern governance, reminiscent of the divine right of kings and echoing a case in the not-too-distant past of a lapse in corporate governance. The main essay then resumes to consider what this means about academic writing and publishing, and what it might mean in terms of new forms of scholarly communication and impact about current affairs, as the first, rough draft of history passes into and through a second.

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Corporate Governance and Boards of Directors

McNulty

2015

Wiley Encyclopedia of Management

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Corporate governance draws attention to a vast range of individuals and groups at all levels of economic and political activity, who are involved with and interested in matters of firm performance, market confidence, and the systemic legitimacy of capitalism. Corporate governance is a very broad topic with many national variations and intellectual perspectives. It is relevant to all kinds of organizations but it is mostly considered in relation to the ownership, control, and accountability of corporations. Since the early 1990's, the emergence and worldwide diffusion of Codes of Corporate Governance among nations and transnational institutions such as the World Bank and the Organization for Economic Cooperation and Development (OECD) has also highlighted the importance of corporate governance for the development of countries and their host firms. The financial crisis, the latest development in the recurrent crisis of corporate governance, has not only renewed attention to the efficacy of corporate governance mechanisms and reform, but also promises to reshape the corporate governance agenda and ideology going forward. While relations between managers, directors, boards, and shareholders will remain core to the subject these relations will be conducted within a context wherein issues such as: the balance of law versus self‐regulation; the belief in the primacy of (short‐term) shareholder value; the governance responsibilities of shareholders and financial intermediaries; the morality of executive pay and reward; the representativeness of boards; the relationship between the corporation and the rest of society, are all subject to renewed scrutiny.

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Integration of Micro and Macro Studies in Governance Research: CEO Duality, Board Composition, and Financial Performance

Abstract: The authors provide two examples of contemporary and contentious issues related to the gover

Cited by 236 publications

References 41 publications

When Experts Become Liabilities: Domain Experts on Boards and Organizational Failure

When Experts Become Liabilities: Domain Experts on Boards and Organizational Failure

First and Second Drafts of History: The Case of Trump, Foucault and Pre-Modern Governance

Corporate Governance and Boards of Directors

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