Alessandro Hinna, Ernesto De Nito, Gianluigi Mangia, Danila Scarozza and Andrea Tomo
In recent years, increasing scholarly attention has been directed towards the field of governing bodies research. However, little attention has been paid to the behavioural…
Abstract
Purpose
In recent years, increasing scholarly attention has been directed towards the field of governing bodies research. However, little attention has been paid to the behavioural perspective on studying public boards. Aiming to fulfil this gap this paper offers a review of the international literature addressing boards behaviour within the unique organizational setting of public sector.
Design/methodology/approach
Considering as behavioural studies those publications focusing on actors, processes, decision-making, relationships and interaction inside and outside the boardroom, 91 papers were analysed. Adopting the framework provided by Huse (2007), the papers are classified following four behavioural dimensions/blocks which are crucial to understand board dynamics: board members, interactions, structures and leadership, decision-making culture.
Findings
The literature review shows the increasing production – in the last years – on the theoretical issues related to the behavioural perspective in public governance literature. The most relevant part of these contributions addresses the theoretical dimensions of the board member’s characteristics and of structural leadership.
Originality/value of the chapter
The manuscript reveals the need to adopt a more organizational approach for studying the behavioural categories and levels of analysis proposed by public governance literature. Moreover, the article evidences some possible directions for future research that might further contribute to enrich the ‘behavioural governance perspective’ in public organizations.
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R. Greg Bell, Abdul A. Rasheed and Sri Beldona
To date there is little understanding of the factors that impact the survival of foreign IPOs after they list on US stock exchanges. In this study, we examine how foreign IPO…
Abstract
To date there is little understanding of the factors that impact the survival of foreign IPOs after they list on US stock exchanges. In this study, we examine how foreign IPO survival is contingent on institutional factors associated with the firm’s home country. We also explore how corporate governance and organizational identity influence the survival of foreign IPOs in the United States. Results suggest that the US institutional environment supports foreign firms with more independent and professional leadership, and that knowledge-intense organizations have higher chances of long-term success after listing on US exchanges.
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Fadi Shehab Shiyyab, Abdallah Bader Alzoubi and Leena Abdelsalam Almajaly
Corporate governance research suggests that board structure can impact organizational outcomes such as financial performance and executive remuneration. Agency theory posits that…
Abstract
Corporate governance research suggests that board structure can impact organizational outcomes such as financial performance and executive remuneration. Agency theory posits that a board composed of independent directors and chaired by an independent chairperson can provide effective control over agency costs, while stewardship theory suggests that effective decision-making is facilitated when the board is chaired by the CEO and majority of directors are from the executive team. Empirical research into the association between board structure and performance in Jordan has provided mixed results, with no consensus supporting either theory. This study takes a different approach to researching the assumed association between board structure and performance by surveying directors’ perspectives on such assumed relationship between financial performance and four of boards’ characteristics (i.e., board independence, CEO duality, board size, and female ratio on board). Findings of this research indicate that Jordanian directors perceive a medium to strong association between financial performance and each of board independence, independent chair of board, and female ratio on board. However, directors of Jordanian boards perceive no association between financial performance and board size.
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Jeremy D. Mackey, Charn P. McAllister, Liam P. Maher and Gang Wang
Recently, there has been an increase in the number and type of studies in the organizational sciences that examine curvilinear relationships. These studies are important because…
Abstract
Recently, there has been an increase in the number and type of studies in the organizational sciences that examine curvilinear relationships. These studies are important because some relationships have context-specific inflection points that alter their magnitude and/or direction. Although some scholars have utilized basic techniques to make meta-analytic inferences about curvilinear effects with the limited information available about them, there is still a tremendous opportunity to advance our knowledge by utilizing rigorous techniques to meta-analytically examine curvilinear effects. In a recent study, we used a novel meta-analytic approach in an effort to comprehensively examine curvilinear relationships between destructive leadership and followers' workplace outcomes. The purpose of this chapter is to provide an actionable guide for conducting curvilinear meta-analyses by describing the meta-analytic techniques we used in our recent study. Our contributions include a detailed guide for conducting curvilinear meta-analyses, the useful context we provide to facilitate its implementation, and our identification of opportunities for scholars to leverage our technique in future studies to generate nuanced knowledge that can advance their fields.
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Leticia Pérez-Calero Sánchez, Jaime Guerrero-Villegas and José Manuel Hurtado González
Using a contingency approach, the purpose of this paper is to study how organizational factors (such as the organizational life cycle, firm size, firm ownership concentration and…
Abstract
Purpose
Using a contingency approach, the purpose of this paper is to study how organizational factors (such as the organizational life cycle, firm size, firm ownership concentration and firm technology) determine the relative importance of the monitoring and provision of resources roles provided by board members.
Design/methodology/approach
This paper highlights the importance of contingency factors in carrying out board’s roles using a sample of 579 European firms registered in the STOXX Europe 600 index. The authors used a longitudinal analysis for the period from 2002 through to 2011.
Findings
The results show that the monitoring role is more relevant for companies that are large, are operating at the mature and stagnant stages, have a dispersed ownership and are low-technology. However, the provision of resources role is more relevant for companies that are in the growth and stagnant stages, and have a concentrated ownership.
Originality/value
The traditional analysis that relates the board’s structure and composition to the board’s roles focuses on determining what board should be the best. It plays little attention to analyzing which organizational factors affect the importance and presence of monitoring or resource dependence roles. In this regard, this work adds significant insights to agency theory and resource dependence theory as, with a contingency framework, the research aims to find what functions the board needs to develop in order to get better firm performance.
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Ron Sanchez, Jeremy Galbreath and Gavin Nicholson
In this paper we develop a model for researching the influence that a board of directors can have on improving an organization’s sustainability performance. Our model explores…
Abstract
In this paper we develop a model for researching the influence that a board of directors can have on improving an organization’s sustainability performance. Our model explores sources of cognitive flexibility of boards needed to recognize and respond to the need for improved sustainability performance. We first define concepts of sustainability, sustainability competence, and sustainability performance. We then analyze two forms of board capital (a board’s human capital and its social capital) and three aspects of a board’s information processing (its patterns of information search, discussion and debate, and information absorption) that we suggest affect a board’s cognitive flexibility and thereby influence whether a board decides to adopt sustainability performance goals. Our model also suggests that an organization’s strategic flexibility – as represented by its current endowments of resource flexibilities and coordination flexibilities – will moderate the relationship between a board’s decision to adopt sustainability performance goals and an organization’s subsequent achievement of those goals. We also suggest that our model is generally relevant to any research seeking to predict the influence of boards on strategic change in many forms, not just to research focused on sustainability issues.
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Roberto Pascual and Martí Larraza‐Kintana
The control role of the Board of Directors is aimed at monitoring the decisions and actions undertaken by managers in order to protect stockholders’ interests. Considerable…
Abstract
The control role of the Board of Directors is aimed at monitoring the decisions and actions undertaken by managers in order to protect stockholders’ interests. Considerable theoretical and empirical research has analyzed whether directors’ behavior is consistent with their fiduciary responsibility, but this research has reported inconsistent findings. This paper offers a comprehensive review of both theoretical and empirical literature on the control role of the board and suggests several guidelines for future research.
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This paper aims to provide a twofold empirical comparison: first, a comparison between the impact of corporate governance mechanisms on agency costs proxies and firm performance…
Abstract
Purpose
This paper aims to provide a twofold empirical comparison: first, a comparison between the impact of corporate governance mechanisms on agency costs proxies and firm performance measures, and second, this comparison was used before and after the 2008 financial crisis, capturing two different economic states.
Design/methodology/approach
Panel regression methods were applied to two data sets of non-financial firms incorporated in the FTSE ALL-Share index over the period 2005-2011.
Findings
The results provide evidence that not all mechanisms lead to lower agency conflicts and/or higher firm performance. Ownership identity has a significant impact and the role of the governance mechanisms changes with the changes in the economic conditions surrounding the firm.
Research limitations/implications
The results lend support to the notion that forcing a certain code of practice on firms to follow could compel them to move away from conflict reduction governance structures.
Originality/value
To the best of the authors’ knowledge, this is the first paper to provide a comparison of empirical evidence for the impact of board characteristics and ownership identity on agency costs and firm performance by using a comprehensive set of corporate governance mechanisms. This comparison challenges the prior studies that use performance as an indirect proxy for lower agency costs. Additionally, it compares the impact of the governance mechanisms during two different economic conditions.
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Stewardship theory is an emergent approach for explaining leadership behavior, challenging the assumptions of agency theory and its dominance in corporate governance literature…
Abstract
Purpose
Stewardship theory is an emergent approach for explaining leadership behavior, challenging the assumptions of agency theory and its dominance in corporate governance literature. This study revisits the agency and stewardship theories by seeking to answer whether chief executive officers (CEOs) in China are committed stewards or opportunistic agents.
Design/methodology/approach
Based on 5,165 observations of 1,036 listed companies in China over the period 2005–2010, the results suggest that the corporate governance mechanisms developed from the agency theory in the West are not necessarily applicable in the Chinese context.
Findings
This study supports the stewardship theory in its findings that empowering CEOs through the practice of CEO duality and longer CEO tenure have a positive effect on firm value in China. Additionally, the positive relationships between CEO duality, CEO tenure and firm value are strengthened by the number of executive directors on the board, and weakened by the number of independent directors on the board.
Practical implications
One size does not fit all. Leadership behaviors in China do not follow the agency assumptions inherent in Western practices, rather they favor the conditions of positive leadership expressed by the stewardship theory. Assuming that the motivations of managers in emerging markets such as China are similar to those in the West may lead to a poor fit between governance policies and the institutional context.
Originality/value
As one of the few studies to connect the theoretical debate between the agency and stewardship theories, this study presents new evidence to support the stewardship theory, thereby strengthening its theoretical importance and relevance in corporate governance literature.
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Dawna L. Rhoades and Paula L. Rechner
Shareholders are demanding that firms change their ownership and corporate governance structures to improve accountability and corporate performance. This study examined the…
Abstract
Shareholders are demanding that firms change their ownership and corporate governance structures to improve accountability and corporate performance. This study examined the influence of ownership and governance on entry mode selection, considered a key decision for international firms and one with important financial implications. Results indicate that owner control is related to the selection of higher risk and higher control forms of entry. Partial support was found for the effects of other governance mechanisms.