Does the Rolodex Matter? Corporate Elite's Small World and the Effectiveness of Boards of Directors

• 成果类型: Article
• 署名作者: Bang Dang Nguyen
• 署名单位: University of Cambridge
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.1110.1457
• 发表日期: 2012
• 页码: 236-252
• 关键词: Social networks; ceo turnover; Board of directors; firm performance; corporate governance

摘要

This paper investigates the impact of social ties on the effectiveness of boards of directors. When the chief executive officer (CEO) and a number of directors belong to the same social networks, the CEO is less likely to be dismissed for poor performance. The results are robust to different measures of performance and networks, and consistent after controlling for CEO ability and connected boards' superior information. Although being ousted is costly for all CEOs-who must then devote time to finding new employment and only succeed in 62% of cases-socially connected CEOs are more likely to find new and better employment after a forced departure. Evidence from this paper suggests that close social ties between board members and CEOs impact the workings of the board of directors.