Meta Analytic Reviews Of Board Composition Leadership Structure And Finan

Topics: Corporate governance, Management, Board of directors Pages: 23 (14343 words) Published: May 6, 2015
Strategic Management Journal, Vol. 19, 269–290 (1998)


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,
Given the...

References: Abrahamson, E. and C. Park (1994). ‘Concealment of
negative organizational outcomes: An agency theory
Alexander, J. A., M. L. Fennell and M. T. Halpern
Anderson, C. A. and R. N. Anthony (1986). The New
Corporate Directors
Bainbridge, S. M. (1993). ‘Independent directors and
the ALI corporate governance project’, George
Washington Law Review, 61, pp. 1034–1083.
Baliga, B. R., N. C. Moyer and R. S. Rao (1996).
Barnard, J. W. (1991). ‘Institutional investors and the
new corporate governance’, North Carolina Law
Review, 69, pp. 1135–1187.
Barnhart, S. W., M. W. Marr and S. Rosenstein (1994).
Bathala, C. T. and R. P. Rao (1995). ‘The determinants
of board composition: An agency theory perspective’, Managerial and Decision Economics, 16,
Baysinger, B. D. and H. H. Butler (1985). ‘Corporate
governance and the board of directors: Performance
Baysinger, B. D. and R. E. Hoskisson (1990). ‘The
composition of boards of directors and strategic
Baysinger, B. D., R. D. Kosnik and T. A. Turk (1991).
Bazerman, M. H. and F. D. Schoorman (1983). ‘A
limited rationality model of interlocking directorates’, Academy of Management Review, 8,
Beatty, R. E. and E. J. Zajac (1994). ‘Managerial
incentives, monitoring, and risk bearing: A study
Strat. Mgmt. J., Vol. 19, 269–290 (1998)
Berg, S. V. and S. K. Smith (1978). ‘CEO and board
chairman: A quantitative study of dual vs
Biggs, J. (November 1995). ‘Why TIAA-CREF is
active in corporate governance’, The Participant,
Bilimoria, D. and S. K. Piderit (1994). ‘Board committee membership: Effects of sex-based bias’, Academy
of Management Journal, 37, pp
Black, B. S. (1990). ‘Shareholder passivity reexamined’, Michigan Law Review, 89, pp. 520–608.
Black, B. S. (1992). ‘Agents watching agents: The
promise of institutional investor voice’, UCLA Law
Boeker, W. (1992). ‘Power and managerial dismissal:
Scapegoating at the top’, Administrative Science
Boeker, W. and J. Goodstein (1993). ‘Performance
and successor choice: The moderating effects of
Podsakoff and S. B. MacKenzie (1995). ‘On the
interchangeability of objective and subjective measures of employee performance: A meta-analysis’,
Borch, O. J. and M. Huse (1993). ‘Informal strategic
Boyd, B. K. (1994). ‘Board control and CEO compensation’, Strategic Management Journal, 15(5),
Boyd, B. K. (1995). ‘CEO duality and firm performance: A contingency model’, Strategic Management
Journal, 16(4), pp
Buchholtz, A. K. and B. A. Ribbins (1994). ‘Role of
chief executive officers in takeover resistance:
Burns, G. and R. A. Melcher (6 November 1995). ‘A
grain of activism at Archer Daniels Midland’, Business Week, p
Burt, R. S. (1983). Corporate Profits and Cooptation.
Cannella, A. A. and M. Lubatkin (1993). ‘Succession
as a sociopolitical process: Internal impediments to
Chaganti, R. S., V. Mahajan and S. Sharma (1985).
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Board Composition Essay
  • Unions and Productivity Growth: a Meta-Analytic Review Chris Doucouliagos, Patrice Laroche Essay
  • Critical Review of Meta Analysis Essay
  • Cohesion and Performance in Groups: A Meta-Analytic Clarification of Construct Relations Essay
  • Essay about leadership
  • Essay about leadership
  • meta-analysis critique cochrane review Essay
  • leadership Essay

Become a StudyMode Member

Sign Up - It's Free