Stealthy Footsteps to the Boardroom: Executives' Backgrounds, Sophisticated Interpersonal Influence Behavior, and Board Appointments

Abstract

Drawing from theory and research on interpersonal attraction, as well as interviews with 42 directors of large U.S. industrial and service fi rms, we identifi ed a set of social infl uence tactics that are less likely to be interpreted by the infl uence target as manipulative or political in intent and are therefore more likely to engender social infl uence. We consider who among top managers and directors of large fi rms is most likely to exercise such tactics and how their use affects the likelihood of garnering board appointments at other fi rms. An analysis of survey data on interpersonal infl uence behavior from a large sample of managers and chief executive offi cers (CEOs) at Forbes 500 companies strongly supports our theoretical arguments: managers' and directors' ingratiatory behavior toward colleagues is more likely to yield board appointments at other fi rms to the extent that it comprises relatively subtle forms of fl attery and opinion conformity, which our theory suggests are less likely to elicit cynical attributions of motive. Supplementary analyses also indicate that these relationships are mediated by an increased likelihood of receiving a colleague's recommendation for the appointment. Moreover, we theorize and fi nd that managers and directors who have a background in politics, law, or sales, or an upper-class background, are more sophisticated and successful in their ingratiatory behavior. • Political perspectives on corporate leadership and governance have traditionally focused on structural sources of power. Studies have examined, for instance, how variation in the formal and social structure of boards of directors can help explain the level and form of chief executive offi cer (CEO) compensation, perquisites, and other outcomes that indicate the power of top managers to satisfy their personal preferences (for a review, see Finkelstein, Hambrick, and Cannella, 2009). Many studies have also suggested how managers and directors who occupy central positions in the board interlock network can leverage their social structural power to acquire a range of benefi ts, including higher levels of pay, additional board seats, and prestigious positions in the public sphere (Useem, 1984;Davis, 2003Davis, , 2005; for a review, see Finkelstein, Hambrick, and Cannella, 2009). A growing literature has complemented the traditional focus on structural sources of power in corporate governance by examining managers' use of social infl uence tactics to further their personal interests or benefi t their fi rms. For example, several studies have examined whether ingratiation and persuasion tactics by managers can explain positive performance evaluations and generous pay increases (e.

Psyched-up to Suck-up: Self-regulated Cognition, Interpersonal Influence, and Recommendations for Board Appointments in the Corporate Elite

“…Our theory and findings complement a recent study by Stern and Westphal (2010), which demonstrated that ingratiatory behavior by top managers and directors was more successful to the extent that it included relatively sophisticated forms of flattery, such as framing flattery as advice seeking. Stern and Westphal (2010) suggested that these behaviors, though they involve exaggerated praise, are relatively subtle and thus less likely to be recognized as insincere.…”

“…In a recent study, Stern and Westphal (2010) showed that ingratiatory behavior by top managers and directors was more likely to engender social influence to the extent that it was comprised of relatively subtle or sophisticated behaviors, such as framing flattery as advice seeking, or framing a compliment as likely to make the influence target uncomfortable. Although effective in general, such tactics are unlikely to resolve the ingratiator's dilemma.…”

Obscured transparency? Compensation benchmarking and the biasing of executive pay

“…Moreover, even though boards and compensation committees should push back and correct biases initiated or supported by the CEO (Shleifer and Vishny 1997, Iliev et al 2015, Dicks 2012, there are various reasons why that may not be the case. For example, board members have incentives to maintain cordial social relations with the CEO (Gulati and Westphal 1999, Khurana 2011, Stern and Westphal 2010. Also, board members are often executives in their own right, and biased peer groups provide an indirect justification for a rise in their own compensation (Westphal and Zajac 1995).…”

Conflict in the boardroom: a participant observation study of supervisory board dynamics

“…Some persons are more conflict avoiding than others. From the work of Westphal andStern (2006, 2007), Stern and Westphal (2010), we know that personality traits such as opinion conformity and a tendency to use flattery are beneficial to individual board members because it increases the chances of receiving board appointments. The tendency to appoint and retain conforming, non-critical board members with similar views (Westphal and Zajac 1995)-even when they are demographically different (Zhu et al 2014)-can be an important driver for conflict avoidance.…”