BOARD COMPOSITION FROM A STRATEGIC CONTINGENCY PERSPECTIVE

This study examined the association between corporations’environments, strategies, and past performance and the composition of their boards of directors as measured by size and outside director representation. The environment, strategy and past performance were viewed as posing a strategic contingency; each of these sets could determine the success or failure of the company. Data on 119 Fortune 500 industrial companies for the 1983-9 period were used. Canonical analysis showed that increased uncertainty of a firm's environment, use of external growth and diversification; reliance on leverage as a means of finance, and poor past financial performance were associated with large board size and increased outside representation in subsequent years. Most important, board composition was positively associated with future measurements of corporate financial performance.

[1]  W. Judge,et al.  Institutional and Strategic Choice Perspectives on Board Involvement in the Strategic Decision Process , 1992, Academy of Management journal. Academy of Management.

[2]  Shaker A. Zahra,et al.  The relative power of ceos and boards of directors: Associations with corporate performance , 1991 .

[3]  I. Kesner,et al.  An investigation of the relationship between board composition and stockholder suits , 1990 .

[4]  Rita D. Kosnik.  Effects of Board Demography and Directors' Incentives on Corporate Greenmail Decisions , 1990 .

[5]  Harbir Singh,et al.  MANAGEMENT BUYOUTS: DISTINGUISHING CHARACTERISTICS AND OPERATING CHANGES PRIOR TO PUBLIC OFFERING , 1990 .

[6]  Robert E. Hoskisson,et al.  The Composition of Boards of Directors and Strategic Control: Effects on Corporate Strategy , 1990 .

[7]  I. Kesner,et al.  Crisis in the boardroom: fact and fiction , 1990 .

[8]  Vasudevan Ramanujam,et al.  Research on corporate diversification: A synthesis , 1989 .

[9]  Ahmad Tashakori,et al.  Board of Director Composition, Shareholder Wealth, and Dividend Policy , 1989 .

[10]  Charles R. Schwenk.  Devil's advocacy and the board: A modest proposal , 1989 .

[11]  Harbir Singh,et al.  Top management tenure, corporate ownership structure and the magnitude of golden parachutes , 1989 .

[12]  Shaker A. Zahra,et al.  Boards of Directors and Corporate Financial Performance: A Review and Integrative Model , 1989 .

[13]  Harbir Singh,et al.  Management-Board Relationships, Takeover Risk, and the Adoption of Golden Parachutes , 1989 .

[14]  R. Molz.  Managerial domination of boards of directors and financial performance , 1988 .

[15]  I. Kesner,et al.  Directors' Characteristics and Committee Membership: An Investigation of Type, Occupation, Tenure, and Gender , 1988 .

[16]  R. Daft,et al.  Chief executive scanning, environmental characteristics, and company performance: An empirical study , 1988 .

[17]  Benjamin E. Hermalin,et al.  The Determinants of Board Composition , 1988 .

[18]  M. Weisbach.  Outside directors and CEO turnover , 1988 .

[19]  R. Bettis,et al.  Boards of Directors, Top Management Compensation, and Shareholder Returns , 1987 .

[20]  J. Harrison.  The Strategic Use of Corporate Board Committees , 1987 .

[21]  I. Kesner,et al.  Directors' Stock Ownership and Organizational Performance: An Investigation of Fortune 500 Companies , 1987 .

[22]  R. Gaedeke,et al.  Fortune 500 list revisited 12 years later: Still an endangered species for academic research? , 1987 .

[23]  J. Rosenstein.  Why don't U.S. boards get more involved in strategy? , 1987 .

[24]  Rita D. Kosnik.  Greenmail: A Study of Board Performance in Corporate Governance , 1987 .

[25]  Christopher M. James,et al.  The Takeover Market, Corporate Board Composition, and Ownership Structure: The Case of Banking , 1987, The Journal of Law and Economics.

[26]  J. Pearce,et al.  The impact of grand strategy and planning formality on financial performance , 1987 .

[27]  Bart Victor,et al.  Research Notes: Board Composition and the Commission of Illegal Acts: An Investigation of Fortune 500 Companies , 1986 .

[28]  J. Barney.  Strategic Factor Markets: Expectations, Luck, and Business Strategy , 1986 .

[29]  Cynthia A. Montgomery,et al.  Product-Market Diversification and Market Power , 1985 .

[30]  Dan R. Dalton,et al.  Organizational performance as an antecedent of inside/outside chief executive succession: An empirical assessment. , 1985 .

[31]  Philip L. Cochran,et al.  The Composition of Boards of Directors and Incidence of Golden Parachutes , 1985 .

[32]  V. Mahajan,et al.  CORPORATE BOARD SIZE, COMPOSITION AND CORPORATE FAILURES IN RETAILING INDUSTRY[1] , 1985 .

[33]  G. Huber,et al.  Retrospective reports of strategic‐level managers: Guidelines for increasing their accuracy , 1985 .

[34]  H. N. Butler,et al.  Corporate Governance and the Board of Directors: Performance Effects of Changes in Board Composition , 1985 .

[35]  B. Thompson.  Canonical Correlation Analysis: Uses and Interpretation , 1984 .

[36]  R. J. House,et al.  Organizations: A Quantum View , 1984 .

[37]  P. Birnbaum.  The choice of strategic alternatives under increasing regulation in high technology companies. , 1984, Academy of Management journal. Academy of Management.

[38]  Ralph Nader,et al.  Reforming Corporate Governance , 1984 .

[39]  Robert A. Burgelman.  Corporate Entrepreneurship and Strategic Management: Insights from a Process Study , 1983 .

[40]  J. Pearce.  The relationship of internal versus external orientations to financial measures of strategic performance , 1983 .

[41]  Mark S. Mizruchi,et al.  Who Controls Whom? An Examination of the Relation Between Management and Boards of Directors in Large American Corporations , 1983 .

[42]  E. Fama,et al.  Separation of Ownership and Control , 1983, The Journal of Law and Economics.

[43]  F. Schoorman,et al.  A Limited Rationality Model of Interlocking Directorates. , 1983 .

[44]  Henry Mintzberg,et al.  Power in and Around Organizations , 1983 .

[45]  W. Boulton,et al.  A look at the Board's role in planning. , 1983, The Journal of business strategy.

[46]  S. Vance,et al.  Corporate leadership : boards, directors, and strategy , 1983 .

[47]  Peter R. Richardson,et al.  Implementing the unrelated product strategy , 1982 .

[48]  M. Hitt,et al.  Industrial Firms' Grand Strategy and Functional Importance: Moderating Effects of Technology and Uncertainty , 1982 .

[49]  K. A. Palia.  Grand corporate strategy and critical functions : interactive effects of organizational dimensions , 1982 .

[50]  E. Herman.  Corporate Control, Corporate Power , 1982 .

[51]  A. Tezel,et al.  Research notes and communications. Some connections between corporate‐level planning and diversity , 1981 .

[52]  Donald C. Hambrick,et al.  Strategic awareness within top management teams , 1981 .

[53]  R. T. Lenz.  ‘Determinants’ of organizational performance: An interdisciplinary review , 1981 .

[54]  K. Provan,et al.  Board power and organizational effectiveness among human service agencies. , 1980, Academy of Management journal. Academy of Management.

[55]  K. N. M. Dundas,et al.  Corporate strategy and the concept of market failure , 1980 .

[56]  R. Golembiewski.  Macro organizational behavior , 1980 .

[57]  Robert N. Stern,et al.  The External Control of Organizations: A Resource Dependence Perspective. , 1979 .

[58]  Richard C. Schmidt.  The Board of Directors and Financial Interests , 1977 .

[59]  R. Rumelt.  Strategy, structure, and economic performance , 1974 .

[60]  J. Pfeffer.  Size, Composition, and Function of Hospital Boards of Directors: A Study of Organization-Environment Linkage , 1973 .

[61]  J. Pfeffer.  Size and Composition of Corporate Boards of Directors: The Organization and its Environment , 1972 .

[62]  K. Andrews.  The Concept of Corporate Strategy , 1971 .

[63]  Myles L. Mace,et al.  Directors: Myth and Reality , 1971 .

[64]  Mayer N. Zald,et al.  The Power and Functions of Boards of Directors: A Theoretical Synthesis , 1969, American Journal of Sociology.

[65]  Ross Elliott Lanser.  Visible traits of boards of directors of new enterprise , 1969 .

[66]  D. Stewart,et al.  A general canonical correlation index. , 1968, Psychological bulletin.

[67]  Mayer N. Zald,et al.  Urban Differentiation, Characteristics of Boards of Directors, and Organizational Effectiveness , 1967, American Journal of Sociology.

[68]  P. Lawrence,et al.  Organization and environment , 1967 .

[69]  Alfred Dupont Chandler,et al.  战略与结构 : 美国工商企业成长的若干篇章=strategy and structure : chapters in the history of the American industrial enterprise , 1962 .