Strategic Management Journal, Vol. 19, 269–290 (1998)
META-ANALYTIC REVIEWS OF BOARD
COMPOSITION, LEADERSHIP STRUCTURE, AND
DAN R. DALTON1, CATHERINE M. DAILY1*, ALAN E. ELLSTRAND2 AND JONATHAN L. JOHNSON3
School of Business, Indiana University, Bloomington, Indiana, U.S.A. College of Business Administration, California State University, Long Beach, California, U.S.A. 3
School, of Business Administration, University of Arkansas, Fayetteville, Arkansas, U.S.A. 2
Careful review of extant research addressing the relationships between board composition, board leadership structure, and firm financial performance demonstrates little consistency in results. In general, neither board composition nor board leadership structure has been consistently linked to firm financial performance. In response to these findings, we provide metaanalyses of 54 empirical studies of board composition (159 samples, n = 40,160) and 31 empirical studies of board leadership structure (69 samples, n = 12,915) and their relationships to firm financial performance. These—and moderator analyses relying on firm size, the nature of the financial performance indicator, and various operationalizations of board composition— provide little evidence of systematic governance structure/financial performance relationships. 1998 John Wiley & Sons, Ltd.
Strat. Mgmt. J. Vol. 19 269–290 (1998)
There is a distinguished tradition of conceptualization and research arguing that boards of directors’ composition and leadership structure (CEO/chairperson roles held jointly or separately)
can influence a variety of organizational outcomes. This attention continues to be apparent in the academic literature (e.g., Baliga, Moyer, and
Rao, 1996; Beatty and Zajac, 1994; Boyd, 1995;
Buchholtz and Ribbins, 1994; Daily and Dalton,
1994a, 1995; Donaldson and Davis, 1991; Finkelstein and D’Aveni, 1994; Hoskisson, Johnson, Key words: board composition; board leadership
structure; firm performance; meta-analysis
*Correspondence to: Catherine M. Daily, School of Business,
Indiana University, Bloomington, IN 47405, U.S.A.
CCC 0143–2095/98/030269–22 $17.50
1998 John Wiley & Sons, Ltd.
and Moesel, 1994; Main, O’Reilly, and Wade,
1995; Ocasio, 1994), as well as the business
press (e.g., Burns and Melcher, 1995; Lesly,
1995; Lublin, 1995a, 1995b; Maremont, 1995;
Melcher, 1995; Simison and Blumenstein, 1995).
It is also notable that these governance elements
have been at the point of corporate reform efforts
by large-scale institutional investors and shareholder activists (e.g., see Davis and Thompson, 1994, for an overview of corporate governance
and shareholder activism; see also Barnard, 1991;
Black, 1990; Fligstein, 1990; O’Barr and Conley, 1992).
While the focus on these two governance issues
is prominent in the popular press, guidance from
the academic literature as to the superiority of
specific board composition configurations or
board leadership structures is unclear, especially
Received 27 February 1996
Final revision received 9 May 1997
D. R. Dalton et al.
with respect to firm performance. The following
sections provide an overview of suggested board
composition and leadership structure configurations. We focus, in particular, on research which assesses the relationship between these aspects of
corporate governance and firm financial performance. Such a focus is appropriate given the stated expectations of governance activists, especially
institutional investors, regarding their board
reform activities. John Biggs, CEO and chairperson of TIAA-CREF, has strongly defended his institution’s focus on governance reform, including reapportionment of the board of directors and separation of the positions of CEO and board
chairperson, as a means for improving the performance of firms in his institution’s portfolio (Biggs, 1995; see also, Black, 1992; Gordon,
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