CEO ownership and effective boards: Impacts on firm outcomes

Strategic Organization

Volumn 6, Issue 3, 2008, Pages 259-283

  Walters, Bruce A ^a   Kroll, Mark ^a   Wright, Peter ^b  

^a LOUISIANA TECH UNIVERSITY   (United States)

^b UNIVERSITY OF MEMPHIS   (United States)

Author keywords

Agency theory; Boards of directors; CEO ownership; Corporate governance; Resource dependence theory

Indexed keywords

EID: 48749123109     PISSN: 14761270     EISSN: 1741315X     Source Type: Journal    
DOI: 10.1177/1476127008093519     Document Type: Article

References (85)

1. Agrawal, A., Jaffe, J.F. and Mandelker, G.N. (1992) 'The Post-Merger Performance of Acquiring Firms: A Re-Examination of an Anomaly', Journal of Finance 47: 1605-21.
2. Agrawal, A. and Mandelker, G. (1987) 'Managerial Incentives and Corporate Investment and Financing Decisions', Journal of Finance 42: 223-37.
3. Aiken, L.S. and West, S.G. (1991) Multiple Regression: Testing and Interpreting Interactions. Newbury Park, CA: Sage.
4. Amihud, Y. and Lev, B. (1981) 'Risk Reduction as a Managerial Motive for Conglomerate Mergers', Bell Journal of Economics 12: 605-17.
5. Arthur, M.M. (2003) 'Share Price Reactions to Work-Family Initiatives: An Institutional Perspective', Academy of Management Journal 46: 497-505.
6. Asquith, P. (1983) 'Merger Bids, Market Uncertainty, and Stockholder Returns', Journal of Financial Economics 11: 51-83.
7. Barkema, H.G. and Gomez-Mejia, L.R. (1998) 'Managerial Compensation and Firm Performance: A General Research Framework', Academy of Management Journal 41: 135-45.
8. Baysinger, B. and Hoskisson, R.E. (1990) 'The Composition of Boards of Directors and Strategic Control: Effects on Corporate Strategy', Academy of Management Review 15: 72-87.
9. Beatty, R.P. and Zajac, E.J. (1994) 'Managerial Incentives, Monitoring, and Risk Bearing: A Study of Executive Compensation, Ownership, and Board Structure in Initial Public Offerings', Administrative Science Quarterly 39: 313-35.
10. Bethel, J.E. and Liebeskind, J. (1993) 'The Effects of Ownership Structure on Corporate Restructuring', Strategic Management Journal 14: 15-31.
11. Black, F. and Scholes, M. (1973) 'The Pricing of Options and Corporate Liabilities', Journal of Political Economy 81: 637-54.
12. Boyd, B. (1990) 'Corporate Linkages and Organizational Environment: A Test of the Resource Dependence Model', Strategic Management Journal 11: 419-30.
13. Boyd, B. (1995) 'CEO Duality and Firm Performance: A Contingency Model', Strategic Management Journal 16: 301-12.
14. Brown, S.J. and Warner, J.B. (1985) 'Using Daily Stock Returns', Journal of Financial Economics 14: 3-31.
15. Bruton, G.D., Oviatt, B.M. and White, M.A. (1994) 'Performance of Acquisitions of Distressed Firms', Academy of Management Journal 37: 972-89.
16. Carpenter, M. and Westphal, J. (2001) 'The Strategic Context of External Network Ties: Examining the Impact of Director Appointments on Board Involvement in Strategic Decision-Making', Academy of Management Journal 44: 639-60.
17. Chang, S.J. (2003) 'Ownership Structure, Expropriation, and Performance of Group-Affiliated Companies in Korea', Academy of Management Journal 46: 238-53.
18. Chatterjee, S. (1986) 'Types of Synergy and Economic Value', Strategic Management Journal 7: 119-40.
19. Dalton, D.R., Daily, C.M., Johnson, J.L. and Ellstrand, A.E. (1999) 'Number of Directors and Financial Performance: A Meta-Analysis', Academy of Management Journal 42: 674-86.
20. Dalton, D.R., Daily, C.M., Certo, S.T. and Roengpitya, R. (2003) 'Meta-Analyses of Financial Performance and Equity: Fusion or Confusion?', Academy of Management Journal 46: 13-26.
21. Datta, D.K., Pinches, G.E. and Narayanan, V.K. (1992) 'Factors Influencing Wealth Creation from Mergers and Acquisitions: A Meta-Analysis', Strategic Management Journal 13: 67-84.
22. Fama, E. (1970) 'Efficient Capital Markets: A Review of Theory and Empirical Work', Journal of Finance 25: 383-97.
23. Fama, E. (1980) 'Agency Problems and the Theory of the Firm', Journal of Political Economy 88: 288-307.
24. Fama, E. and MacBeth, J. (1973) 'Risk, Return and Equilibrium: Empirical Tests', Journal of Political Economy 81: 607-36.
25. Fernandez, C. and Arrondo, R. (2005) 'Alternative Internal Controls as Substitutes of the Board of Directors', Corporate Governance: An International Review 13: 856-66.
26. Filatotchev, I. and Bishop, K. (2002) 'Board Composition, Share Ownership, and "Underpricing" of UK IPO Firms', Strategic Management Journal 23: 941-55.
27. Finkelstein, S. and D'Aveni, R.A. (1994) 'CEO Duality as a Double-Edged Sword: How Boards of Directors Balance Entrenchment Avoidance and Unity of Command', Academy of Management Journal 37: 1079-108.
28. Fowler, K.L. and Schmidt, D. (1989) 'Determinants of Tender Offer Post-Acquisition Financial Performance', Strategic Management Journal 10: 381-98.
29. Franks, J., Harris, R. and Titman, S. (1991) 'The Postmerger Share-Price Performance of Acquiring Firms', Journal of Financial Economics 29: 81-96.
30. Freund, R.J. and Littell, R.C. (1991) SAS System for Regression. Cary, NC: SAS Institute Inc.
31. Fulmer, R.M. and Gilkey, R. (1988) 'Blending Corporate Families: Management and Organization Development in a Postmerger Environment', Academy of Management Executive 2: 275-83.
32. Galai, D. and Masulis, R.W. (1976) 'The Option Pricing Model and the Risk Factor of Stock', Journal of Financial Economics 3: 53-81.
33. Ghosh, A., Moon, D. and Tandon, K. (2007) 'CEO Ownership and Discretionary Investments', Journal of Business Finance and Accounting 34: 819-39.
34. Gibbs, P.A. (1993) 'Determinants of Corporate Restructuring: The Relative Importance of Corporate Governance, Takeover Threat, and Free Cash Flow', Strategic Management Journal 14: 51-68.
35. Hahn, A.L. (2005) 'The Long Slide Stops for M&A Driven by a December Frenzy: US Volume Climbs 46% in 2004', Investment Dealers Digest 17 January: 1-2.
36. Haleblian, J. and Finkelstein, S. (1999) 'The Influence of Organizational Acquisition Experience on Acquisition Performance: A Behavioral Learning Perspective', Administrative Science Quarterly 44: 29-56.
37. Hambrick, D.C. and Jackson, E.M. (2000) 'Outside Directors with a Stake: The Linchpin in Improving Governance', California Management Review 42(4): 108-127.
38. Harrison, J. and Godfrey, P.C. (1997) 'Do Event Studies Predict Acquisition Success?: An Empirical Test', paper presented at the Annual Academy of Management Conference, Boston.
39. Hayward, M. (2002) 'When Do Firms Learn from their Acquisition Experience? Evidence from 1990-1995', Strategic Management Journal 23: 21-39.
40. Hayward, M. (2003) 'Professional Influence: The Effects of Investment Banks on Clients' Acquisition Financing and Performance', Strategic Management Journal 24: 783-801.
41. Hayward, M. and Hambrick, D. (1997) 'Explaining the Premiums Paid for Large Acquisitions: Evidence of CEO Hubris', Administrative Science Quarterly 42: 103-27.
42. Healy, P.M., Palepu, K.G. and Ruback, R. (1992) 'Does Corporate Performance Improve after Mergers?', Journal of Financial Economics 31: 135-75.
43. Hillman, A.J. and Dalziel, T. (2003) 'Boards of Directors and Firm Performance: Integrating Agency and Resource Dependence Perspectives', Academy of Management Review 28: 383-96.
44. Hoskisson, R.E., Johnson, R.A. and Moesel, D.D. (1994) 'Corporate Divestiture Intensity in Restructuring Firms: Effects of Governance, Strategy, and Performance', Academy of Management Journal 37: 1207-51.
45. Jarrell, G.A. and Poulsen, A.P. (1989) 'The Return to Acquiring Firms in Tender Offers: Evidence from Three Decades', Financial Management Autumn: 12-19.
46. Jensen, M.C. (1986) 'Agency Costs of Free Cash Flow, Corporate Finance and Takeovers', American Economic Review 76: 323-9.
47. Jensen, M.C. (1988) 'Takeovers: Their Causes and Consequences', Journal of Economic Perspectives 2: 21-48.
48. Jensen, M.C. (1993) 'The Modern Industrial Revolution, Exit and the Failure of Internal Control Systems', Journal of Finance 48: 831-80.
49. Jensen, M.C. and Meckling, W.H. (1976) 'Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure', Journal of Financial Economics 3: 305-60.
50. Jensen, M.C. and Murphy, K. (1990) 'CEO Incentives: It's Not How Much You Pay, But How', Harvard Business Review 68: 138-49.
51. Johnson, R.A., Hoskisson, R.E. and Hitt, M.A. (1993) 'Board of Director Involvement in Restructuring: The Effects of Board versus Managerial Controls and Characteristics', Strategic Management Journal 14: 33-50.
52. Jones, G.R. and Butler, J.E. (1992) 'Managing Internal Corporate Entrepreneurship: An Agency Theory Perspective', Journal of Management 18: 733-49.
53. Kaplan, S.N. and Weisbach, M. (1992) 'The Success of Acquisitions: Evidence from Divestitures', Journal of Finance 47: 107-38.
54. King, D.R., Dalton, D.R., Daily, C.M. and Covin, J.G. (2004) 'Meta-Analyses of Post-Acquisition Performance: Indications of Unidentified Moderators', Strategic Management Journal 25: 187-200.
55. Kroll, M., Wright, P., Toombs, L. and Leavell, H. (1997) 'Form of Control: A Critical Determinant of Acquisition Performance and CEO Rewards', Strategic Management Journal 18: 85-96.
56. Lang, L.H.P., Stulz, R.M. and Walkling, R.A. (1991) 'A Test of the Free Cash Flow Hypothesis: The Case of Bidder Returns', Journal of Financial Economics 29: 315-35.
57. Lintner, J. (1965) 'The Valuation of Risk Assets and the Selection of Risky Investments in Stock Portfolios and Capital Budgets', Review of Economics and Statistics 47: 13-37.
58. Loughran, T. and Vijh, A.M. (1997) 'Do Long-Term Shareholders Benefit from Corporate Acquisitions?', Journal of Finance 52: 1765-90.
59. McWilliams, A. and Siegel, D. (1997) 'Event Studies in Management Research: Theoretical and Empirical Issues', Academy of Management Journal 40: 626-57.
60. Meulbroek, L.K. (2001) 'The Efficiency of Equity-Linked Compensation: Understanding the Full Cost of Awarding Executive Stock Options', Financial Management 30(2): 5-44.
61. Morck, R., Shleifer, A. and Vishny, R. (1988) 'Management Ownership and Market Valuation: An Empirical Analysis', Journal of Finance 20: 293-315.
62. Morck, R., Shleifer, A. and Vishny, R. (1990) 'Do Managerial Objectives Drive Bad Acquisitions?', Journal of Financial Economics 45: 31-48.
63. Myers, S.C. and Majluf, N.S. (1984) 'Corporate Financing and Investment Decisions when Firms Have Information that Investors do not Have', Journal of Financial Economics 14: 47-60.
64. Oler, D.K., Harrison, J.S. and Allen, M.A. (2008) 'The Danger of Misinterpreting Short-Window Event Study Findings in Strategic Management Research: An Empirical Illustration Using Horizontal Acquisitions', Strategic Organization 6: 151-84.
65. Paine, F.T. and Power, D.J. (1984) 'Merger Strategy: An Examination of Drucker's Five Rules for Successful Acquisitions', Strategic Management Journal 5: 99-110.
66. Palepu, K. (1985) 'Diversification Strategy, Profit Performance and the Entropy Measure', Strategic Management Journal 6: 239-55.
67. Pfeffer, J. (1972) 'Interorganizational Influence and Managerial Attitudes', Academy of Management Journal 15: 317-30.
68. Pfeffer, J. and Salancik, G.R. (1978) The External Control of Organizations: A Resource-Dependence Perspective. New York: Harper and Row.
69. Porac, J.F., Ventresca, M.J. and Mishina, Y. (2002) 'Interorganizational Cognition and Interpretation', in J. Baum (ed.) Blackwell Companion to Organizations, pp. 579-598. Malden, MA and Oxford: Blackwell.
70. Rediker, K.J. and Seth, A. (1995) 'Boards of Directors and Substitution Effects of Alternative Governance Mechanisms', Strategic Management Journal 16: 85-99.
71. Schleifer, A. and Vishny, R.W. (1991) 'Takeovers in the '60s and the '80s: Evidence and Implications', Strategic Management Journal 12: 51-9.
72. Subramaniam, C. (2001) 'Are Golden Parachutes an Optimal Contracting Response or Evidence of Managerial Entrenchment? Evidence from Successful Takeovers', Journal of Business Finance and Accounting 28: 1-34.
73. Sundaramurthy, C. and Lewis, M. (2003) 'Control and Collaboration: Paradoxes of Governance', Academy of Management Review 28: 397-415.
74. Tosi, H. and Gomez-Mejia, L. (1989) 'The Decoupling of CEO Pay and Performance: An Agency Theory Perspective', Administrative Science Quarterly 34: 169-89.
75. Tosi, H., Werner, S., Katz, J.P. and Gomez-Mejia, L.R. (2000) 'How Much Does Performance Matter? A Meta-Analysis of CEO Pay Studies', Journal of Management 26: 301-39.
76. Westphal, J.D. (1999) 'Collaboration in the Boardroom: Behavioral and Performance Consequences of CEO-Board Social Ties', Academy of Management Journal 42: 7-24.
77. Wright, P. and Ferris, S. (1997) 'Agency Conflict and Corporate Strategy: The Effect of Divestment on Corporate Value', Strategic Management Journal 18: 77-83.
78. Wright, P. and Kroll, M. (2002) 'Executive Discretion and Corporate Performance as Determinants of CEO Compensation, Contingent on External Monitoring Activities', Journal of Management and Governance 6(3): 189-214.
79. Wright, P., Ferris, S., Sarin, A. and Awasthi, V. (1996) 'The Impact of Corporate Insider, Blockholder, and Institutional Equity Ownership on Firm Risk-Taking', Academy of Management Journal 39: 441-63.
80. Wright, P., Kroll, M. and Elenkov, D. (2002a) 'Acquisition Returns, Increase in Firm Size and Chief Executive Officer Compensation: The Moderating Role of Monitoring', Academy of Management Journal 45: 599-608.
81. Wright, P., Kroll, M., Lado, A. and Elenkov, D. (2005) 'Influences of Relative Rewards of Top Managers on Firm Performance', Strategic Organization 3: 311-35.
82. Wright, P., Kroll, M., Lado, A. and van Ness, B. (2002b) 'The Structure of Ownership and Corporate Acquisition Strategies', Strategic Management Journal 23: 41-53.
83. Zahra, S.A. and Pearce, J.A. (1989) 'Boards of Directors and Corporate Financial Performance: A Review and Integrative Model', Journal of Management 15: 291-334.
84. Zajac, E.J. and Westphal, J. (1994) 'The Costs and Benefits of Managerial Incentives and Monitoring in Large US Corporations: When is More not Better?', Strategic Management Journal 15: 121-42.
85. Zajac, E.J. and Westphal, J. (2004) 'The Social Construction of Market Value: Institutionalization and Learning Perspectives on Stock Market Reactions', American Sociological Review 69: 433-57.