The Composition of Boards of Directors and Strategic Control: Effects on Corporate Strategy

Baysinger, Barry D.; Hoskisson, Robert E.

doi:10.5465/amr.1990.4308231

Cited by 1,032 publications

(647 citation statements)

References 38 publications

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“…Corporate governance can be considered as an integrated set of internal and external controls aiming to harmonize shareholder and manager objectives (Baysinger & Hoskisson, 1990) so that there are no confl icts of interest resulting from the separation between ownership and control (Berle & Means, 1932;Jensen & Meckling, 1976). Th e context of corporate governance practices includes the board of directors as a body that mediates in the confl ict of interests between managers and shareholders.…”

Section: Board Of Director Interlockingmentioning

confidence: 99%

Influence of board interlocking on earnings management

Cunha

Piccoli

2017

Rev. contab. finanç.

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The participation of directors on more than one board is called "board interlocking". This phenomenon contributes to the spread of management and governance practices, through directors sharing their knowledge and experiences on other boards. Thus, directors could "carry" the earnings management practices present in one company into another in which they sit on the board. It is assumed that the greater directors' direct or indirect connections on boards, the greater the sharing of information, especially information that can be reflected in company earnings quality. In light of the above, the aim of this study is to verify the influence of board interlocking on earnings management in companies listed on the São Paulo Stock, Commodities, and Futures Exchange (BM&FBovespa). The study is characterized as descriptive, quantitative, and documentary, and uses a sample of companies listed on the BM&FBOVESPA between 2011 and 2013. For earnings management, the model from Kang and Sivaramakrishnan (1995) was used, while for interlocking, degree centrality measures were used for direct board member connections, and intermediation centrality for indirect connections. The results indicate that earnings management is influenced by the interlocking of board members. It is concluded that the greater the degree centrality, the greater positive earnings management is, and that variations in positive and negative accruals are influenced by board member intermediation. The results reinforce the idea that earnings management behavior can be transferred between companies by the directors that make up their boards.

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Section: Board Of Director Interlockingmentioning

confidence: 99%

Influence of board interlocking on earnings management

Cunha

Piccoli

2017

Rev. contab. finanç.

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“…For example, board networks allow organizations to gain access to strategic advice, counsel, and expertise (Baysinger & Hoskisson, 1990;Carpenter & Westphal, 2001;Westphal, 1999); create linkages to important stakeholders (Burt, 1980); and safeguard their reputation and legitimacy (Bazerman & Schoorman, 1983;Pfeffer & Salancik, 1978). In this manner, networks create a shared social environment (Weick & Roberts, 1993) where organizations convey the value of certain practices to others in the network (Hillman, Shropshire, & Cannella, 2007) regardless of whether or not the practices enhance or diminish social or environmental welfare (Kang, 2008;Pfarrer, Smith, Bartol, Khanin, & Zhang, 2008).…”

Section: Structural Elements: Board Networkmentioning

confidence: 99%

Exceptional boards: Environmental experience and positive deviance from institutional norms

2012

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SummaryThis paper explores the phenomenon of positive organizational deviance from institutional norms by establishing practices that protect or enhance the natural environment. Seeking to explain why some organizations practice positive environmental deviance while others do not, we locate our inquiry on the board of directors-the organizational body that interprets external issues and guides organizational response. We find a strong correlation between positive deviance and the past environmental experience of board directors and the centrality of the organization within field-level networks. Organizations located on the periphery of the network or whose boards possess a high level of environmental experience are more likely to deviate in positive ways. Our conclusions contribute to multiple literatures in behavioral and environmental governance, the role of filtering and enaction in the process of institutional conformity and change, and the mechanisms behind proactive environmental protection strategies within business.

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“…However, whilst outside directors can bring a breadth of knowledge, experience and objectivity to bear upon board decisions, it may be difficult for them to understand the complexities of the company, particularly as outside directors are usually part-time and may sit on a number of other boards. For example, Baysinger and Hoskisson (1990) found that there is no link between board composition and performance when both relate to the same year. They argue that outside directors lacked the information necessary for decisionmaking; did not appear to fully understand the business; and may have too little time to devote to their duties.…”

Section: Outside Directorsmentioning

confidence: 99%