Political ideology of the board and CEO dismissal following financial misconduct

Park, U. David; Boeker, Warren; Gomulya, David M.

doi:10.1002/smj.3088

Cited by 40 publications

(47 citation statements)

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“…In general, these different aspects of performance tend to be negatively associated with CEO dismissal, although the precise effects vary to some extent across studies 3 . Additional research has shown that financial misconduct increases CEO dismissal (Park, Boeker, & Gomulya, 2020) and that different characteristics of the CEO (e.g., tenure, social status, firm‐specific knowledge) (Flickinger et al, 2016; Shen & Cannella, 2002a; Wang et al, 2017) as well as board characteristics (e.g., outsider directors, board political ideology, CEO overpayment) (Park et al, 2020; Shen & Cannella, 2002a; Wowak et al, 2011) can also influence dismissal, or alter a CEO's likelihood of being dismissed for poor performance or misconduct.…”

Section: Previous Researchmentioning

confidence: 99%

“…Still, as illustrated in Table 1, there has been variance in how scholars have applied these methods across studies. While many (i.e., about 56%) have used both positive and negative indicators of dismissal (e.g., Hubbard, Christensen, & Graffin, 2017; Park et al, 2020; Wang et al, 2017), some have exclusively focused on one or the other type of indicator (e.g., Dwivedi et al, 2018; Gomulya & Mishina, 2017; Worrell et al, 1993; Wowak et al, 2011; Zorn, DeGhetto, Ketchen, & Combs, 2020). Moreover, specific indicators vary between studies, at least in how they are described.…”

Section: Previous Researchmentioning

confidence: 99%

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A database of CEO turnover and dismissal in S&P 1500 firms, 2000–2018

Gentry

Harrison

Quigley

et al. 2021

Strategic Management Journal

106

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Research Summary We introduce an open‐source dataset documenting the reasons for CEO departure in S&P 1500 firms from 2000 through 2018. In our dataset, we code for various forms of voluntary and involuntary departure. We compare our dataset to three published datasets in the CEO succession literature to assess both the qualitative and quantitative differences among them and to explore how these differences impact empirical findings associated with the performance‐CEO dismissal relationship. The dataset includes eight different classifications for CEO turnover, a narrative description of each departure event, and links to sources used in constructing the narrative so that future researchers can validate or adapt the coding. The resulting data are available at (https://doi.org/10.5281/zenodo.4543893). Managerial Summary This article describes the development of an open‐source database of all CEO dismissals and departures in the S&P 1500 between 2000 and 2018. Prior research on CEO turnover either does not capture the cause of departure or has coded the event independently, leading to inconsistencies and a lack of transparency in coding schemes. This has made it difficult to generate knowledge on the causes and consequences of CEO dismissal. We describe how we developed the database, and we explore how our dataset compares to prior CEO dismissal research. The resulting data are available at (https://doi.org/10.5281/zenodo.4543893).

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Section: Previous Researchmentioning

confidence: 99%

Section: Previous Researchmentioning

confidence: 99%

A database of CEO turnover and dismissal in S&P 1500 firms, 2000–2018

Gentry

Harrison

Quigley

et al. 2021

Strategic Management Journal

106

View full text Add to dashboard Cite

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“…Vicarious learning based on sharing tacit knowledge, for example, through mentoring or apprenticeship, is outside the scope of this paper (e.g., Leonard and Sensiper 1998). 3 We may still observe the influence of ideological heterogeneity within capitalism (e.g., Park et al 2020). 4 The importance of communication is also emphasized by related literature on the attention-based view of the firm (Ocasio 1997), absorptive capacity (Cohen and Levinthal 1990), and knowledge transfer (Szulanski 1996).…”

Section: Discussionmentioning

confidence: 88%

“…Instead of treating capitalism or socialism as singular ideologies, future research could investigate its variants, such as libertarian capitalism, welfare-state capitalism, and conscious capitalism, as the ideological foundation of vicarious learning (cf. Park et al 2020) and organizational practices more generally. It would be also interesting to study political ideologies within capitalism and their effects on organizational learning.…”

Section: Discussionmentioning

confidence: 99%

“…Communication practices may, in turn, shape how organizational attention is directed (Ocasio et al 2018) and balance between consensus and dissensus (Abdallah and Langley 2014) and what the organization consequently learns (Fiol 1994, Argote andMiron-Spektor 2011). That organizational behavior is, in general, ideological comes as no surprise to scholars familiar with the relevant literature (e.g., Starbuck 1982, Weiss and Miller 1987, Park et al 2020. However, the ideological dimension of vicarious learning has gone largely unnoticed because firms in an industry tend to be "relatively homogenous in their commitment to capitalism's ideology" (Ingram and Simons 2000, p. 45).…”

Section: Introductionmentioning

confidence: 99%

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Ideology in Vicarious Learning–Related Communication

Lamberg

Luoma

2021

Organization Science

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Organizations often learn vicariously by observing what other organizations do. Our study examines vicarious learning–related communication through which individuals share their observations with other organizational members. Most students and members of present-day organizations would expect that this communication is driven by a prodevelopment logic—that communication serves the purpose of organizational improvement and competitiveness. Our unique historical evidence on learning-related communication over multiple decades shows that the subjective and collective attitude toward prodevelopment communication may be ideologically conditioned. Prodevelopment communication is the norm in capitalist organizations, but competing ideologies may emphasize other goals higher than organizational development. Consequently, increasing challenges to capitalism as the ideological basis of economic organization can have deep impacts on how organizations learn and produce innovations in the future.

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Corporate directors as heterogeneous network pipes: How director political ideology affects the interorganizational diffusion of governance practices

Gupta

Wowak

Boeker

2022

Strategic Management Journal

Self Cite

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Scholars have long recognized that interlocking directors act as conduits (or "pipes") in the interorganizational diffusion of governance practices. Yet, this research generally depicts interlocks as homogenous, overlooking the possibility that directors differ in their beliefs about a given practice. Our study explores this idea in the context of the spread of two practices-lone-insider board structures and CEO-chair separation-across S&P 500 firms from 1997 to 2016. We theorize and show that politically conservative directors are more likely to transmit the lone-insider structure, whereas politically liberal directors are likelier to transmit the CEO-chair separation structure. We further illustrate that these effects are stronger when the focal firm faces shareholder pressure for governance reform, and weaker when the institutional norms curtail director discretion. Managerial Summary: Prior research suggests that corporate directors who sit on multiple boards cause those firms to learn from each other and adopt similar practices. Yet, directors differ in their views on governance practices, which means that they should also differ in their propensity to act as "pipes" in this diffusion process. We argue and show that interlocking directors' political ideologies influence this process, such that conservative directors are likelier to transmit the loneinsider board structure (where the CEO is the only firm

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Political ideology of the board and CEO dismissal following financial misconduct

Abstract: Research Summary: Why do some boards refuse to take serious action against CEOs who have committed financial misconduct? Past work has directed attention to the antecedents of misconduct while largely overlooking this ques-

Cited by 40 publications

References 71 publications

A database of CEO turnover and dismissal in S&P 1500 firms, 2000–2018

A database of CEO turnover and dismissal in S&P 1500 firms, 2000–2018

Ideology in Vicarious Learning–Related Communication

Corporate directors as heterogeneous network pipes: How director political ideology affects the interorganizational diffusion of governance practices

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