The making of active boards in Swedish public companies
- PDF / 338,387 Bytes
- 33 Pages / 439.37 x 666.142 pts Page_size
- 100 Downloads / 211 Views
The making of active boards in Swedish public companies Karin Jonnerga˚rd • Anna Stafsudd
Published online: 27 October 2009 Springer Science+Business Media, LLC. 2009
Abstract Boards of directors are a vital part of corporate governance systems. In the on-going discussion about the development of national corporate governance systems, however, little interest has been given to the issue of how and why board behavior changes over time. In this article, we use an institutional approach and study the development of board behavior in Sweden between 1994 and 2004 and if it is affected by board composition and board network characteristics. In order to do so, we introduce the constructs of board activities, i.e. what the boards do, and board involvement, i.e. when in the decision process they get involved. Findings show that range of board activities and board involvement have increased drastically during this period, which indicates a change in the logic of appropriateness of Swedish board behavior. There are robust indications that new types of actors affect activities and involvement positively, as do board interlocks, whereas network centrality affects activities and involvement negatively. Keywords Board of directors Board activities Board involvement Board composition Board networks Institutional theory
1 Introduction What boards of directors actually do, why they are doing this and the effects of boards’ activities are central issues in corporate governance research. Earlier research, most often based on agency theory, leaves us with inconsistent results regarding the relation between board composition, board processes and board performance (Dalton et al. 1998; Johnson et al. 1996). Recently, several researchers have, therefore, attempted to integrate more theoretical perspectives in order to K. Jonnerga˚rd A. Stafsudd (&) School of Management and Economics, Va¨xjo¨ University, 351 95 Va¨xjo¨, Sweden e-mail: [email protected]
123
124
K. Jonnerga˚rd, A. Stafsudd
explain board activities such as agency theory, resource dependency, stewardship theory, upper echelons perspective and group process theory (Forbes and Milliken 1999; Hillman and Dalziel 2003; Jensen and Zajac 2004; Nicholson and Kiel 2007; Zona and Zattoni 2007). Thus, complex, but hopefully more realistic, models of the behavior of boards of directors have been constructed (e.g. Huse 2005, 2007; Ingley and Walt 2001). Still, one theory remains largely unexplored when it comes to board work, that of institutional theory. Institutional theory has been used to explain differences across national or legal, institutional settings (Li and Harrison 2008; Luoma and Goodstein 1999). However, there are relatively few studies of national board effects with exceptions such as Judge and Zeithaml (1992) and Peng (2004), where the former studied the impact of external pressure on board involvement given certain organization characteristics and the latter an increase of AngloAmerican corporate governance in another national setting. The purpose of
Data Loading...
