Purpose
This paper aims to draw on insights from team learning theory and stakeholder theory to examine the influence of board composition on firms’ stakeholder management practices. The authors posit that board diversity is likely to enhance stakeholder management by shaping organizational goals by placing emphasis on the interests of a wide variety of stakeholders and providing firms with relevant knowledge to enhance their ability manage these interests. The authors further theorize on the moderating role of boards’ learning environment, which they conceptualized as an important complementary governance-related factor, likely to further boards’ ability to enhance stakeholder management.
Design/methodology/approach
The authors test these predictions using the generalized estimating equations (GEE) technique on a panel of S&P 500 firms observed from 2001 to 2011.
Findings
The findings provide evidence that more diverse boards in terms of gender, nationality and race/ethnicity are generally associated with more effective stakeholder management. Further, the findings also suggest that boards’ co-working experience moderates the relationship between gender and national diversity and stakeholder management.
Originality/value
While corporate governance research surveys many strategic implications of board composition, limited attention has been paid to the interplay of board characteristics with stakeholder management. This study is among the first to the authors’ knowledge to explore the impact of board diversity on stakeholder management using team learning research, thus drawing attention to the role of boards’ co-working experience in shaping their ability to impact firms’ outcomes.
Research Summary: The appointment of a new CEO is among the most pivotal and visible decisions made by a board of directors. While prior research has surveyed the impact of performance and governance‐related factors on CEO selection decisions, our understanding of the implications of a firm's global context is limited. This article explores the influence of home country globalization, international diversification, and the undertaking of major cross‐border acquisitions on the appointment of a CEO with a global mind‐set. Using a sample of European and U.S. firms from the Global 500 ranking from 2005 to 2010, we find that companies are likely to match the characteristics of new CEOs with their global strategic contexts.
Managerial Summary: In this article, we highlight the interplay between a firm's global context and CEO selection. Our findings indicate that executives aspiring to reach the C‐suite should be highly attuned to the imperatives of aligning their knowledge bases, mind‐sets, and perspectives to grasp the challenges faced by companies operating within a global context. From the board's perspective, the selection of a new CEO provides the opportunity to assess a firm's future strategic direction and enables the board to select an executive with the managerial capabilities required to address the challenges of globalization.
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