The effects of board size and diversity on strategic change

Goodstein, Jerry; Gautam, Kanak; Boeker, Warren

doi:10.1002/smj.4250150305

Cited by 986 publications

(757 citation statements)

References 33 publications

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“…2 We further added board controls, at firm level, that could affect board group dynamics and subsequent decisions made over environmental practices. We controlled for board size because larger boards tend to have more network ties (Goodstein, Gautam, & Boeker, 1994) and be less effective at decision making and monitoring (Dalton, Daily, Johnson, & Ellstrand, 1999;Judge & Zeithaml, 1992). We also accounted for CEO duality because such powerful CEOs potentially influence board decisions, although this was not found to be relevant to environmental practices in prior studies (Berrone & Gomez-Mejia, 2009;McKendall et al, 1999;Post, Rahman, & Rubow, 2011).…”

Section: Independent Variablesmentioning

confidence: 99%

Exceptional boards: Environmental experience and positive deviance from institutional norms

2012

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SummaryThis paper explores the phenomenon of positive organizational deviance from institutional norms by establishing practices that protect or enhance the natural environment. Seeking to explain why some organizations practice positive environmental deviance while others do not, we locate our inquiry on the board of directors-the organizational body that interprets external issues and guides organizational response. We find a strong correlation between positive deviance and the past environmental experience of board directors and the centrality of the organization within field-level networks. Organizations located on the periphery of the network or whose boards possess a high level of environmental experience are more likely to deviate in positive ways. Our conclusions contribute to multiple literatures in behavioral and environmental governance, the role of filtering and enaction in the process of institutional conformity and change, and the mechanisms behind proactive environmental protection strategies within business.

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Section: Independent Variablesmentioning

confidence: 99%

Exceptional boards: Environmental experience and positive deviance from institutional norms

2012

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“…11; larger the size of the board, the more competent the corporate governance will be owing to the large pool of skills, knowledge and expertise. In addition, bigger boards are more capable of offering diverse assistance to the firm in light of securing resources and decreasing environmental risks (Goodstein et al, 1994;Nazli Anum, 2010;Pearce & Zahra, 1992;Pfeffer, 1987).…”

Section: The Executive Committee Size and Firm Performancementioning

confidence: 99%

“…In sum, common arguments contend that larger board are more diverse and have significant associations to the external environment to assist the firm in obtaining critical resources and ideas for decisions pertaining to corporate policies that are known to improve efficiency (Goodstein et al, 1994; Nanka-Bruce, 2011). Chaganti et al (1985) and Dalton et al (1998), revealed that large boards are significant for the experiences contributed by the members to the board discussions and decision making.…”

Section: The Executive Committee Size and Firm Performancementioning

confidence: 99%

The Effect of Board of Directors Characteristics, Audit Committee Characteristics and Executive Committee Characteristics on Firm Performance in Oman: An Empirical Study

Al-Matar¹,

Al‐Swidi²,

Fadzil³

2014

ASS

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This study is an attempt to achieve the main objective by examining the association between the board of director's characteristics, audit committee characteristics and the executive committee characteristics and the performance of the Oman companies. This study used many assumptions to test the relationship between independent variables and dependent variable as discussed in the section explaining the study method. The data comprised of 162 non-financial companies because financial and non-financial companies employ different methods and they have different structures. As this study attempts to bridge the gap in the existing literature by investigating the association between corporate governance mechanisms and firm performance in the emerging market of Oman, it focuses on adding new important variables of corporate governance mechanisms like board change, the role of secretary on the board, the legal counsel and the executive committee characteristics that improve firm performance.The findings indicated a significantly positive relationship between board size, board meeting, audit committee independence and executive committee independence, and the Tobin`s Q. On the other hand, board independence and legal counsel are significantly and negatively related to Tobin`s Q. Moreover, a positive but insignificant relationship is found between CEO tenure, CEO compensation, audit committee size, and the firm performance (Tobin`s Q). Furthermore, board change, the role of the secretary on the board, audit committee meeting, executive committee size and executive committee meeting are revealed to have a negative but insignificant association with firm performance (Tobin`s Q). Finally, this study provides recommendations for future research.

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“…Although the most important role of the directors is to monitor managers to mitigate agency conflicts between managers and shareholders (Fama & Jesen, 1983), they also provide resources including expertise, advice, and guidance so that the organization can make better strategic choices (Boyd, 1990;Daily & Dalton, 1994;Goodstein, Gautam, & Boeker, 1994;Pfeffer & Salancik, 1978;Shropshire, 2010). The advice, information, and guidance available through the directors can at least partially influence strategic decisions of an organization (Westphal & Fredrickson, 2001).…”

Section: Board Of Directors As An Integration Mechanismmentioning

confidence: 99%

Roles of Board of Directors in Organizational Ambidexterity

Kang

2014

JMS

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Organization theory scholars have identified diverse antecedents to organizational ambidexterity including structure, context, and leadership characteristics. Each antecedent has been conceptualized as an alternative solution to organizational ambidexterity. This study argues that these distinct antecedents can have complementary effects on organizational ambidexterity. Differentiation mechanisms can generate new ideas, which are necessary for change and adaptation. Integration mechanisms make it possible to reconcile and address trade-offs and contradictions to achieve organizational ambidexterity. The aim of this research is to examine the interaction effect of these two distinct mechanisms on organizational ambidexterity in restaurant chain industry. Drawing on franchising and corporate governance literature, this paper proposes that the adoption of the franchising system can work as a differentiation mechanism and board of directors can be an integration mechanism. The results show when the number of outside directors and the average tenure of directors are combined with the adoption of the franchising system, chain performance increases.

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The effects of board size and diversity on strategic change

Cited by 986 publications

References 33 publications

Exceptional boards: Environmental experience and positive deviance from institutional norms

Exceptional boards: Environmental experience and positive deviance from institutional norms

The Effect of Board of Directors Characteristics, Audit Committee Characteristics and Executive Committee Characteristics on Firm Performance in Oman: An Empirical Study

Roles of Board of Directors in Organizational Ambidexterity

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