Firm Complexity and Board of Director Composition

Détails

ID Serval
serval:BIB_1EE93AE20A61
Type
Article: article d'un périodique ou d'un magazine.
Collection
Publications
Institution
Titre
Firm Complexity and Board of Director Composition
Périodique
Corporate Governance: An International Review
Auteur⸱e⸱s
Markarian Garen, Parbonetti Antonio
ISSN
0964-8410
Statut éditorial
Publié
Date de publication
12/12/2007
Volume
15
Numéro
6
Pages
1224-1243
Langue
anglais
Résumé
This paper examines the relationship between firm complexity and board of director composition. Utilising the board typology of Baysinger and Zardkoohi (1986), we classify board members either as insiders, business experts, support specialists, or community influentials, and examine board composition in relation to firm internal and external complexity. Internal complexity refers to the sophistication of internal work processes (proxied by firm R&D expenditures, and the amount of invested capital), while external complexity relates to the external competitive structure (proxied by the number of business and geographic segments, and industrial leadership). Utilising a random sample of 150 firms drawn from six industries over the 2003–2005 time period, and after classifying 4,408 directors to one of our board categories, multivariate results confirm conjectures that complexity is related to the specific capabilities that each board member brings to the firm. We find that externally complex firms substitute community influentials for insiders. Additionally, internally complex firms have lower levels of community influentials, which are substituted by insiders and support specialists. This study adds to a small but growing literature that examines the economic determinants of board structure (Boone et al., 2007; Coles et al., 2005; Gillan et al., 2003; Linck et al., 2005), by providing a unique lens in examining board characteristics that goes beyond the traditional insider/independent classification.
Mots-clé
Management of Technology and Innovation, Strategy and Management, General Business, Management and Accounting
Web of science
Création de la notice
05/05/2021 10:04
Dernière modification de la notice
06/05/2021 6:35
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