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The COVID-19 pandemic has disrupted nearly every boardroom in the world. However, neither the extant leadership literature nor the corporate governance literature offers succinct guidance on what constitutes effective board leadership during such a calamity. To address this theoretical and practical need, we develop a moderated mediation model, in which directive leadership from the board chair promotes competitive simplification at the onset of the crisis, which in turn promotes firm financial performance during the crisis. Using survey responses from 120 directors of U.S. public firms in Spring of 2020, combined with firm-level archival data from multiple sources and time periods, we find support for this mediated relationship—but only if the chair is not CEO. If the chair is CEO, we find no evidence of a positive relationship between directive leadership and either competitive simplification or firm financial performance; rather, we find some evidence of a negative relationship. We explore the implications of these findings for the theory and practice of corporate governance and crisis management. [ABSTRACT FROM AUTHOR]

Traditional agency theory views the proper role of the board chair exclusively as providing independent oversight to monitor and control the CEO. Recently, firms have introduced innovations in board leadership that have confounded these theoretical expectations. One notable innovation is the executive board chair, a corporate governance hybrid responsible for both oversight and strategic decision-making, challenging agency theory's prescription that the two activities remain separate. In this study, we argue that an executive board chair position can resolve the trade-off between independent oversight and involvement in strategy and therefore generate a performance advantage. We also predict that, owing to the blurring of lines between the CEO and board chair roles that the executive board chair position creates, the relationship will be stronger the greater the need to monitor and control the CEO but weaker when organizational complexity and board leadership demands are greater. Analysis of S&P 1500 firms from 2003 to 2017 provides general support for our arguments. [ABSTRACT FROM AUTHOR]

Research Summary: Human coding of unstructured text can enable scholars to measure complex latent constructs for use in empirical analysis, but also requires substantial time and resources that limit the number and sample sizes of studies using this approach. We demonstrate how supervised machine learning (ML) can overcome these constraints by allowing scholars to scale human‐coded data. Using board leadership as an illustrative context, we apply this method to create a large‐scale dataset (N = 22,388) from smaller scale human codings of CEO duality and board chair orientations from company proxy statements. We further demonstrate the potential value of this approach by using the resulting dataset to examine the relationships among board leadership, firm performance, and CEO dismissal. The ML code and dataset are available at 10.5281/zenodo.7304697. Managerial Summary: Manually converting unstructured text into usable data requires considerable time and resources. This article outlines a replicable process for applying supervised machine learning (ML) to overcome these constraints by scaling manually coded data. While ML is often used to identify patterns or predict relationships within a given dataset, we show how scholars and practitioners can build valuable custom algorithms at an earlier stage in the process—when first building a dataset. We illustrate this approach by training ML algorithms to replicate human codings of CEO duality and board chair control and collaboration orientations from over 22,000 company filings. We then show how this approach can support new knowledge development by using these data to explore the relationships among board leadership, company performance, and CEO dismissal. [ABSTRACT FROM AUTHOR]

Institutional theorists have long recognized that board interlocks serve as conduits of information, which can facilitate mimetic isomorphism under conditions of uncertainty. In contrast, the potential for coercive isomorphism—which is a response to direct coercion rather than uncertainty—to spread through board interlocks remains unknown. Drawing on the forced compliance literature from social psychology, we propose that coercive isomorphism exhibits a ripple effect, whereby conforming to coercive pressures leads directors to internalize their acquiescence and apply it to the other boards on which they sit. We test this relationship in the context of nonprofit interlocks on the boards of 209 publicly traded U.S. firms between 2010 and 2014, predicting that coercive pressure to minimize overhead in the nonprofit sphere—a phenomenon known as the nonprofit starvation cycle—spreads to corporate boards through nonprofit interlocks, leading the corporate boards to reduce firm investment in intangible assets. We find that this relationship manifests across our sample, but is strongest via interlocks held by powerful directors and in industries characterized by high investment in intangible assets. Finally, we also find that the coercive isomorphism ripple effect ultimately decreases firm value. [ABSTRACT FROM AUTHOR]

The authors hypothesize that customer presence in the boardroom of business-to-business (B2B) firms brings customer orientation and customer knowledge to the board of directors and thereby enhances B2B firm performance. Using an objective measure of customer presence in the boardroom and a sample of 329 B2B firms over a nine-year period, the authors find support for this hypothesis. Moreover, relying on the resource-based view, they hypothesize that the performance benefit of customers in the boardroom is contingent on the value, rarity, inimitability, and organizational fit of customer resources. Specifically, they find that a customer on the board is more effective when demand uncertainty is high but is less effective when the firm is highly diversified. Moreover, a board member who is an independent director of the customer firm is less effective than a board member who is an executive at the customer firm. The authors also find that research and development intensity partially mediates the relationship between customer presence on the board and firm performance. [ABSTRACT FROM AUTHOR]

Scholars have expressed concern that marketing’s influence at the strategic levels of the firm is waning. Consistent with this view, only 2.6% of firms’ board members have marketing experience. The authors suggest that this is short-sighted and that including more marketing-experienced board members (MEBMs) will increase firm growth by (1) helping firms prioritize growth as a strategic objective and (2) contributing their expertise to improve the effectiveness of revenue growth strategies. Drawing on the behavioral model of corporate governance, the authors develop a theoretical framework explicating the situational, dispositional, and structural influence moderators that alter the impact of MEBMs on firm growth. Using 64,086 director biographies from S&P 1500 firms, the authors find that MEBMs positively affect firm-level revenue growth and that this relationship is strengthened or weakened by important contingencies that occur in the firm. The findings suggest that the common practice of not including experienced marketers on boards of directors puts firms at a competitive disadvantage. [ABSTRACT FROM AUTHOR]

Board leadership has always been conceptualized as a tradeoff between two desirable yet mutually exclusive organizational attributes. Classical organization theory prescribes unity of command, achieved by combining the chief executive officer (CEO) and board chair positions; in contrast, agency theory prescribes independent monitoring, achieved by separating the CEO and board chair positions. Extant theory does not acknowledge the possibility that a compromise might exist between these competing theoretical prescriptions, one which might reduce their mutual exclusivity. Such a compromise has emerged in practice, however: the lead independent director. In the present research, we initiate theoretical exploration of this compromise between the prescriptions of agency theory and classical organization theory, addressing the questions of when a board will choose to appoint a lead independent director, who among the independent directors will serve in the position, how lead independent director appointment will impact firm performance, and whether this compromise is a permanent solution or a stepping stone to a more extreme outcome. Analysis of S&P 1500 firms from 2002 to 2012 reveals that lead independent director appointment reflects balanced power on the board, impacts firm performance positively under the right conditions, and generally becomes institutionalized as a permanent governance structure. [ABSTRACT FROM AUTHOR]

Research Summary: It is well known in corporate governance scholarship that independent directors differ in the vigilance with which they monitor corporate insiders. This difference depends largely on whether independent directors are concerned more with their public reputation or with their prospects in the director labor market. The explanation for this difference depends on an assumption of information asymmetry, however. In the present study, we relax the assumption of information asymmetry to examine how boardroom transparency affects directors' monitoring behavior. Using a randomized experimental study of actual independent directors, we find that boardroom transparency amplifies the effect of directors' inclinations toward either active or passive monitoring, with directors inclined toward vigilant monitoring becoming even more vigilant, and directors inclined toward passive monitoring becoming even more passive. Managerial Summary: In most advanced economies, the board's internal decision processes are either undisclosed or disclosed only to a very limited extent. It remains unknown, then, whether directors would behave differently if their behaviors were made public. We find that when their actions are disclosed to the public, directors concerned with their public reputations become more vigilant, whereas those concerned with their prospects for additional board seats become more passive in monitoring corporate insiders. Whereas regulatory bodies and corporate governance watchdogs have recently advocated for greater disclosure of the boardroom decision‐making process, our study suggests that such mandatory disclosure requirements can exacerbate, rather than alleviate, the problem of passive director monitoring. [ABSTRACT FROM AUTHOR]

Research summary: Scholars have traditionally conceptualized board leadership as a dichotomous construct. A combined CEO and board chair position is interpreted as reflecting a more collaborative approach to corporate governance, whereas separate positions are interpreted as ensuring greater board control. I challenge this conceptualization and posit that a separate board chair can be oriented toward collaboration as well as-or in place of-control. I analyze newly available data from corporate proxy statements to identify these two board chair orientations and test competing perspectives on how they impact profitability growth in a sample of S&P 500 firms. The results indicate that board leadership is a more nuanced phenomenon than the extant literature would suggest. Managerial summary: What is the role of the board chair when not the CEO? Corporate governance experts assert the board chair's role is to monitor and control the CEO. Yet, board chairs often play another, more collaborative role. Board chairs frequently provide advice and guidance to CEOs and relieve CEOs of board leadership burdens, enabling the CEOs to focus on their primary responsibilities. In this study, I examine the effect of board chair orientations on financial performance and find that, as with separating or joining the CEO and board chair positions, the profitability implications of the selected orientation are far from universal. Board chairs must consider their firm's performance context in order to get the most out of a particular approach to being the CEO's boss. Copyright © 2016 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]

CEO duality—the practice of a single individual serving as both CEO and board chair—has been the subject of academic interest for more than 20 years. In that time, boards’ use of CEO duality has fluctuated and the scholarly conceptualizations of the phenomenon have become more complex. As such, the need to understand CEO duality has only increased with time. We review and integrate the disparate literature on this topic so that future attempts to study it will benefit from a more complete understanding of the knowledge already produced. We review the demonstrated antecedents and consequences of CEO duality, pointing out that while much work has been done in this area, much remains that we do not understand. Finally, we offer new theoretical, methodological, and contextual directions that researchers could explore to extend knowledge about CEO duality. [ABSTRACT FROM AUTHOR]