Do the Board of Directors Composition and the Board Interlocking Influence on Performance?
Journal Title: BAR: Brazilian Administration Review - Year 2016, Vol 13, Issue 2
Abstract
This study analyzes the influence of composition of the Board of Directors and their social relations (board interlocking) on performance of Brazilian companies. A descriptive study based on documentary research was conducted with a total of 1,163 companies’ observations and 18,119 standardized observations regarding directors. Simultaneous equations were applied to the data analysis. The survey results showed that, regarding the influence of composition of the Board of Directors on the performance of the companies, among variables used to identify its characteristics, that some showed endogeneity. Among the characteristics of the Board of Directors, the duality of the board was exogenous when comparing market performance (Tobin’s Q) and the outsiders were also exogenous for internal performance (Return on Equity). Thus, the duality of the board is more influenced by the specificities of each company than by the market value of the companies. The characteristic outsiders are more influenced by the institutional environment than by the ROE. The practice of board interlocking proved to be insignificant in relation to the market value, indicating natural selection. Therefore, it is not possible to infer that the board interlocking can increase the dependency of the management, compromising the role of monitoring. Also, it is not possible to state that better positioned and central companies in the corporate relationships network show better performance.
Authors and Affiliations
Dal Vesco, Delci Grapégia; Beuren, Ilse Maria
Keywords
Related Articles
- EP ID EP40618
- DOI -
- Views 257
- Downloads 0
Understanding Interorganizational Learning Based on Social Spaces and Learning Episodes
Different organizational settings have been gaining ground in the world economy, resulting in a proliferation of different forms of strategic alliances that translate into a growth in the number of organizations that ha...
A Visit to the Baron
The towering figure of the Baron of Mauá holds an indisputable place in the economic development of Brazil. His trajectory is widely analyzed not only because of his important achievements, but also because he became t...
How Does National Culture Impact on Consumers’ Decision‐making Styles? A Cross Cultural Study in Brazil, the United States and Japan
This empirical article investigates the relationship between national culture and consumer decision-making styles in the purchase of cell phones, a product category that appears to be required by consumers independent o...
Redefining the Relationship between Intellectual Capital and Innovation: The Mediating Role of Absorptive Capacity
The objective of this study is to analyze the relationship between absorptive capacity, intellectual capital and innovation. The main purpose of this research is to demonstrate that absorptive capacity can leverage the...
Operational Practices and Financial Performance: an Empirical Analysis of Brazilian Manufacturing Companies
In the operations management field, operational practices like total quality management or just in time have been seen as a way to improve operational performance and ultimately financial performance. Empirical support...