Institutional Evolution and Corporate Boards

Victor Zitian Chen, Bersant Hobdari, Pei Sun, Jerry Goodstein

    Publikation: Bidrag til bog/antologi/rapportKonferenceabstrakt i proceedingsForskningpeer review

    Resumé

    We argue that corporate boards are a dynamic repository of human- and social capital in response to external institutional evolution. Theoretically, integrating institutional economics, agency theory and resource dependence theory, we explain that evolution of market-, legal- and political institutions restructures the particular context in which board members play their two primary roles: monitoring the CEO on behalf of the shareholders, suggested by the agency theory, and supporting the CEO by providing resources, knowledge and information, suggested by the resource dependence theory. Such particular contexts entail the external competitive environment and the principal-agency relationship in corporate governance, amplify (or weaken) the need for certain type of board roles, and ultimately require corporations to reconfigure the human- and social capital embedded within the board. Additionally, since the board changes are typically proposed by the block shareholders, whose motivation for doing so is closely associated with a corporation’s financial performance, we further argue that financial performance is a key moderator of the relationships between institutional evolution and changes in board makeups. Using an unbalanced panel covering more than 3000 firms from 17 Western European countries (15 European Union countries plus Norway and Switzerland) and 28 emerging economies over the period 2000-2012, we have found supportive empirical evidence.
    OriginalsprogEngelsk
    TitelProceedings of the 56th Annual Meeting of the Academy of International Business : Local Contexts in Global Business
    RedaktørerKlaus Meyer, Tunga Kiyak
    Udgivelses stedEast Lansing, MI
    ForlagAcademy of International Business
    Publikationsdato2014
    Sider237
    StatusUdgivet - 2014
    BegivenhedAIB 2014 Annual Meeting : Local Context in Global Business - Westin Bayshore, Vancouver, Canada
    Varighed: 23 jun. 201426 jun. 2014
    Konferencens nummer: 56
    http://aib.msu.edu/events/2014/

    Konference

    KonferenceAIB 2014 Annual Meeting
    Nummer56
    LokationWestin Bayshore
    LandCanada
    ByVancouver
    Periode23/06/201426/06/2014
    Internetadresse
    NavnAcademy of International Business. Annual Meeting. Proceedings
    Vol/bind56
    ISSN2078-4430

    Citer dette

    Chen, V. Z., Hobdari, B., Sun, P., & Goodstein, J. (2014). Institutional Evolution and Corporate Boards. I K. Meyer, & T. Kiyak (red.), Proceedings of the 56th Annual Meeting of the Academy of International Business: Local Contexts in Global Business (s. 237). East Lansing, MI: Academy of International Business. Academy of International Business. Annual Meeting. Proceedings, Bind. 56
    Chen, Victor Zitian ; Hobdari, Bersant ; Sun, Pei ; Goodstein, Jerry. / Institutional Evolution and Corporate Boards. Proceedings of the 56th Annual Meeting of the Academy of International Business: Local Contexts in Global Business. red. / Klaus Meyer ; Tunga Kiyak. East Lansing, MI : Academy of International Business, 2014. s. 237 (Academy of International Business. Annual Meeting. Proceedings, Bind 56).
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    abstract = "We argue that corporate boards are a dynamic repository of human- and social capital in response to external institutional evolution. Theoretically, integrating institutional economics, agency theory and resource dependence theory, we explain that evolution of market-, legal- and political institutions restructures the particular context in which board members play their two primary roles: monitoring the CEO on behalf of the shareholders, suggested by the agency theory, and supporting the CEO by providing resources, knowledge and information, suggested by the resource dependence theory. Such particular contexts entail the external competitive environment and the principal-agency relationship in corporate governance, amplify (or weaken) the need for certain type of board roles, and ultimately require corporations to reconfigure the human- and social capital embedded within the board. Additionally, since the board changes are typically proposed by the block shareholders, whose motivation for doing so is closely associated with a corporation’s financial performance, we further argue that financial performance is a key moderator of the relationships between institutional evolution and changes in board makeups. Using an unbalanced panel covering more than 3000 firms from 17 Western European countries (15 European Union countries plus Norway and Switzerland) and 28 emerging economies over the period 2000-2012, we have found supportive empirical evidence.",
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    Chen, VZ, Hobdari, B, Sun, P & Goodstein, J 2014, Institutional Evolution and Corporate Boards. i K Meyer & T Kiyak (red), Proceedings of the 56th Annual Meeting of the Academy of International Business: Local Contexts in Global Business. Academy of International Business, East Lansing, MI, Academy of International Business. Annual Meeting. Proceedings, bind 56, s. 237, AIB 2014 Annual Meeting , Vancouver, Canada, 23/06/2014.

    Institutional Evolution and Corporate Boards. / Chen, Victor Zitian; Hobdari, Bersant; Sun, Pei; Goodstein, Jerry.

    Proceedings of the 56th Annual Meeting of the Academy of International Business: Local Contexts in Global Business. red. / Klaus Meyer; Tunga Kiyak. East Lansing, MI : Academy of International Business, 2014. s. 237 (Academy of International Business. Annual Meeting. Proceedings, Bind 56).

    Publikation: Bidrag til bog/antologi/rapportKonferenceabstrakt i proceedingsForskningpeer review

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    Chen VZ, Hobdari B, Sun P, Goodstein J. Institutional Evolution and Corporate Boards. I Meyer K, Kiyak T, red., Proceedings of the 56th Annual Meeting of the Academy of International Business: Local Contexts in Global Business. East Lansing, MI: Academy of International Business. 2014. s. 237. (Academy of International Business. Annual Meeting. Proceedings, Bind 56).