Session 429

Director Selection and Influence

Track O

Date: Tuesday, September 23, 2014

 

Time: 15:30 – 16:45

Paper

Room: Roma 2


Session Chair:

  • Razvan Lungeanu, Pennsylvania State University

Title: Director Expertise and Its Influence on Firm Strategy: Theory and Evidence from IPO Firms

Authors

  • Razvan Lungeanu, Pennsylvania State University
  • Edward Zajac, Northwestern University

Abstract: In this study, we offer a theoretical and empirical analysis of how and why outside directors, by virtue of their accumulated strategic expertise, can shape firm strategy. We develop a theory of director expertise as a latent resource, specifying the conditions under which such expertise is more likely to be activated, and thus more influential in driving strategic change. We also offer an original multifaceted conceptualization and measurement of director experience, which we term a director’s strategic profile. We find supportive evidence for our perspective, based on an extensive longitudinal dataset that captures the formation and evolution of boards for firms experiencing IPOs, beginning in 1997 and ending in 2011.

Title: Legitimacy and Credibility of Board Members: Do They Matter?

Authors

  • Kamal Bouzinab, University of Quebec-Montreal
  • Yvan Allaire, HEC-Montreal
  • Mihaela Firsirotu, UQAM

Abstract: This paper investigates how the Legitimacy and Credibility of Board members may enhance the likelihood of making successful strategic decisions, such as acquisitions. We argue that Boards with legitimate and credible directors are more likely to perform efficiently their strategy and advice roles than boards relying on a majority of outside independent directors. Our preliminary findings support the general hypothesis that for discrete events of singular importance, such as acquisitions, a legitimate and credible board will enhance the likelihood of a successful transaction. We test our hypotheses in the context of corporate acquisitions with a sample of 133 Canadian transactions carried out between the years 2000 and 2006.

Title: Under the Microscope: The Effect of Analyst Attention on Outcomes in the Director Labor Market

Authors

  • Steven Boivie, Texas A&M University
  • Joseph Harrison, Texas A&M University

Abstract: Research on the director labor market has primarily focused on internal factors driving director exit, such as firm performance or director characteristics, but has mostly overlooked how external factors may influence director exit and other labor market outcomes. We argue that external attention, in the form of analyst recommendations and earnings surprises, leads to various labor market outcomes for directors based on the nature of that attention. Negative attention should decrease directors’ willingness to serve and may threaten prestige, leading to director exit. Positive attention should increase directors’ willingness to serve and should enhance prestige, decreasing exit and leading to other positive outcomes. Further, we argue that these effects will be intensified by analyst reputation and directors’ level of involvement on board committees.

Title: Who Shall Serve (and Why)? A Behavioral Exchange Perspective on Board Service

Authors

  • Miriam Flickinger, LMU Munich
  • Anja Tuschke, University of Munich

Abstract: An implicit assumption in prior work on corporate boards is that board service results from a rational consideration of whether the benefits outweigh the costs for both the firm and the individual director. We suggest, however, that there is value in analyzing more deeply the multiple components and boundedly rational character of any such cost/benefit calculation. Board service is a complex, time-variant, and two-sided process that we believe lends itself well to a behavioral governance approach. We focus on why certain resources emerge as exchange elements, how the initial and later valuation of these resources may differ, how the uncertain timing of the resource exchange can affect the relationship, and how unintended consequences for both sides of the dyad can emerge from these behavioral elements.

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

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