Stewardship Theory and Board Structure: a contingency approach

The purpose of this study was to investigate the validity of several theoretical frameworks which make different predictions about the effect of board structures on firm performance. The choice of theories was based on recognition of their prominence in governance research. The empirical analysis first tested board independence hypotheses based on two competing theories: agency and stewardship. Agency theory, with its origins in finance and economics, has received much support in academic circles. However, recently it has been challenged by stewardship theory (Donaldson & Davis 1991), which is derived from the disciplines of sociology and psychology. Stewardship predictions regarding board independence are directly opposed to those of agency theory.

[1]  Richard L. Priem,et al.  Top Management Team Characteristics and Corporate Illegal Activity , 1995 .

[2]  C. Daily,et al.  SEPARATE, BUT NOT INDEPENDENT: BOARD LEADERSHIP STRUCTURE IN LARGE CORPORATIONS. , 1994 .

[3]  Kanak Gautam,et al.  The effects of board size and diversity on strategic change , 1994 .

[4]  E. M. Meyerson.  The Impact of Ownership Structure and Executive Team Composition on Firm Performance: The Resolution of a Leadership Paradox , 1992 .

[5]  M. Wiersema,et al.  Top Management Team Demography and Corporate Strategic Change , 1992 .

[6]  Robert T. Hamilton,et al.  THE RELATIONSHIP BETWEEN STRATEGY‐STRUCTURE FIT AND FINANCIAL PERFORMANCE IN NEW ZEALAND: EVIDENCE OF GENERALITY AND VALIDITY WITH ENHANCED CONTROLS* , 1992 .

[7]  Lex Donaldson,et al.  Stewardship Theory or Agency Theory: CEO Governance and Shareholder Returns , 1991 .

[8]  Paula L. Rechner,et al.  CEO duality and organizational performance: A longitudinal analysis , 1991 .

[9]  S. Jackson,et al.  Top management and innovations in banking: Does the composition of the top team make a difference? , 1989 .

[10]  A. Murray.  Top management group heterogeneity and firm performance , 1989 .

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

[12]  W. P. Barnett,et al.  Work group demography, social integration, and turnover. , 1989 .

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

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

[15]  Robert E. Hoskisson,et al.  Multidivisional Structure and Performance: The Contingency of Diversification Strategy , 1987 .

[16]  D. Hambrick,et al.  Managerial discretion: A bridge between polar views of organizational outcomes. , 1987 .

[17]  L. Donaldson.  STRATEGY AND STRUCTURAL ADJUSTMENT TO REGAIN FIT AND PERFORMANCE: IN DEFENCE OF CONTINGENCY THEORY , 1987 .

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

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

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

[21]  Philip L. Cochran,et al.  Corporate Social Responsibility and Financial Performance , 1984 .

[22]  Marite Sapiets.  Separate but not independent , 1983 .

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

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

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

[26]  R. Katz.  The Effects of Group Longevity on Project Communication and Performance. , 1982 .

[27]  Henry Mintzberg,et al.  The Structuring of Organizations , 1979 .

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

[29]  Amitai Etzioni,et al.  A Comparative Analysis of Complex Organisations , 1977 .

[30]  Amitai Etzioni.  A comparative analysis of complex organizations: On power, involvement, and their correlates , 1975 .

[31]  J. Child.  MANAGERIAL AND ORGANIZATIONAL FACTORS ASSOCIATED WITH COMPANY PERFORMANCE PART I , 1974 .

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

[33]  C. Perrow.  Complex Organizations: A Critical Essay , 1975 .

[34]  M. E. Shaw.  Group dynamics : the psychology of small group behavior , 1971 .

[35]  D. Mcgregor.  The professional manager , 1968 .

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

[37]  H. Triandis,et al.  Work and the Nature of Man. , 1967 .

[38]  James L. Price,et al.  The Impact of Governing Boards on Organizational Effectiveness and Morale , 1963 .

[39]  Robert C. Davis,et al.  The Achieving Society , 1962 .

[40]  J. James.  A Preliminary Study of the Size Determinant in Small Group Interaction , 1951 .