Director reputation, CEO-board power, and the dynamics of board interlocks

Edward J. Zajac, James D. Westphal*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

259 Scopus citations

Abstract

This study advances research on CEO-board relationships, interlocking directorates, and director reputation by examining how contests for intraorganizational power can affect interorganizational ties. We propose that powerful top managers seek to maintain their control by selecting and retaining board members with experience on other, passive boards and excluding individuals with experience on more active boards. We also propose that powerful boards similarly seek to maintain their control by favoring directors with a reputation for more actively monitoring management and avoiding directors with experience on passive boards. Hypotheses are tested longitudinally using CEO-board data taken from 491 of the largest U.S. corporations over a recent seven-year period. The findings suggest that variation in CEO-board power relationships across organizations has contributed to a segmentation of the corporate director network. We discuss how our perspective can reconcile contrary views and debates on whether increased board control has diffused across large U.S. corporations.

Original languageEnglish (US)
Pages (from-to)507-529
Number of pages23
JournalAdministrative Science Quarterly
Volume41
Issue number3
DOIs
StatePublished - Sep 1996

ASJC Scopus subject areas

  • Arts and Humanities (miscellaneous)
  • Sociology and Political Science
  • Public Administration

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