Session 337

Power at the Top - The Influence of Directors

Track O

Date: Monday, September 22, 2014

 

Time: 16:30 – 17:45

Paper

Room: Estancia 307


Session Chair:

  • Toru Yoshikawa, Singapore Management University

Title: How Managerial Power and Information Quality Shape the Impact of Board Ties on the Adoption of Stock Option Pay

Authors

  • Toru Yoshikawa, Singapore Management University
  • Jungwook Shim, Kyoto Sangyo University
  • Anja Tuschke, University of Munich

Abstract: We examine how managerial power and information quality affect the adoption of a new practice through board interlocks. Distinguishing between received and sent ties, we argue that the decision-making authority surrounding sent ties has a stronger effect on the adoption than received ties. To further refine the influence of sent ties, we consider to which partner a focal firm is tied-to. We find that a sent tie to a large corporate owner helps to transfer rich and detailed information, and consequently the focal firm translates it into action. Our analysis also shows that a countervailing force represented by large bank owners negatively moderates the power of managers with sent ties. We study these issues in the Japanese context right after stock option pay was legalized.

Title: Inside Knowledge, Outside Expertise: Investigating the Role of Lawyers as Affiliated Directors

Authors

  • Ryan Krause, Texas Christian University
  • Matthew Semadeni, Arizona State University

Abstract: The present research demonstrates that outside counsel can play an important role on boards of directors under certain conditions. Whereas most of the research on affiliated directors has either treated them as a uniform group with questionable value as directors or examined the unique aspects of former executives and family members serving on boards, our research explores the role of affiliated directors who provide the firm with an important professional service. By serving on the board, outside counsel can help firms manage their exposure to lawsuits and environmental uncertainty. Small firms, in particular, seek out such help as the liability of smallness affords them fewer alternatives. This research helps to clarify the unique role that affiliated professionals perform on the boards of their client firms.

Title: The Impact of Directors with VC Experience on Post-IPO Firms

Authors

  • John Berns, University of Mississippi

Abstract: Directors are key influencers of the firms whose boards they serve on. Each director brings with them unique characteristics obtained from previous experiences which impact how and to what extent they are able to influence the firm. This study examines the effects of directors with venture capital experience serving on post-IPO firm boards. Directors with venture capital experience can offer valuable contributions to the firms they serve. They are able to draw upon their unique experiences, tap into their networks, and secure both tangible and intangible resources for the firm. Most importantly, directors with venture capital experience are able to draw upon a wealth of accumulated knowledge on growing firms and increasing firm value.

Title: Topping the Pecking Order: The Positive Effects of High Status Female Directors on Firm Outcomes in China

Authors

  • Livia Markoczy, University of Texas at Dallas
  • Li Sun, University of Missouri-Kansas City
  • Jigao Zhu, University of International Business and Economics

Abstract: Relying on the status perspective we suggest that whether or to what degree boards benefit from having female directors depends on the status of these female directors on these boards. Status affects directors’ ability and motivation to introduce new perspectives into board decisions and to influence board decisions. We use a new measure for informal status ranking and test our hypotheses with a novel sample that covers 48,929 director-year observations for 19,490 directors within 1,555 firms in China during 2006-2011. We find that when female directors have high status in the informal status hierarchy of a board they tend to have a positive effect on monitoring, firm value, and management-employee wage differentials, while they also tend to reduce their firms’ exposure to market risk.

All Sessions in Track O...

Sun: 08:00 – 09:15
Session 311: The Power of Power: The Role of Power and Politics in Strategy Processes
Session 386: Entrepreneurial Corporate Governance
Sun: 11:15 – 12:30
Session 476: The Dark Side of Strategic Leadership and Governance
Sun: 15:45 – 17:00
Session 435: What Happens After the CEO Has (Been) Gone?
Sun: 17:15 – 18:30
Session 611: Strategic Leadership and Governance IG Business Meeting
Mon: 08:00 – 09:15
Session 335: Internationalization and Strategic Decisions
Session 458: Those at the Top Matter!
Mon: 11:00 – 12:15
Session 336: CEO Roles, Frames, and Traits
Mon: 14:45 – 16:00
Session 331: CEO Compensation: What we Know, What we Need to Study
Mon: 16:30 – 17:45
Session 337: Power at the Top - The Influence of Directors
Session 411: Ownership and Governance
Tue: 08:00 – 09:15
Session 428: Managing External Dependencies
Session 467: Putting Pressure on the CEO
Tue: 11:00 – 12:15
Session 465: The Importance of Corporate Governance
Tue: 15:30 – 16:45
Session 429: Director Selection and Influence
Tue: 17:15 – 18:30
Session 431: Agents, Principals, and Owners
Session 432: Upper Echelons Revisited


Strategic Management Society

Madrid