Doctoral Dissertation Research: Corporate Board Interlocks: Information, Status, and Institutional Context

North Carolina State University, Raleigh NC

Investigators

Abstract

SES-1332034 Steve McDonald Richard Benton North Carolina State University The investigators will study how corporate governance is structurally and institutionally embedded, focusing on the network of board interlocks, inter-organizational ties that form when a corporate director or CEO sits on the board of another firm. The investigators will analyze how corporate governance and board interlocks co-evolve. Specifically, they will study the mutual occurrence of four mechanisms that operate in the coevolution of director interlocks and corporate governance. These mechanisms are diffusion, selection, endogenous network mechanisms, and institutional change. The major research questions are: How do director interlocks spread governance conceptions between firms? and How do existing governance conceptions influence the selection of new directors? Examining each of these mechanisms in concert will provide a holistic picture of corporate governance and board interlocks. Moreover, the study will contribute considerable theoretical insights into issues of organizational change, the effects of legal environments, and micro-macro level interactions. The analysis will use network panel data on board ties and governance provisions for six time points between 1998 and 2006 and recently developed stochastic actor based models. Broader Impacts Research findings will advance theory and research on corporate governance and interlock networks across firms. The findings will be of interest to scholars and policy makers working on issues related to shareholder value and corporate governance. By specifying the mechanisms and conditions under which firms allocate internal power, the research could potentially help policy-makers better design interventions that promote transparency and accountability in corporate governance. Further, the study offers the first application of panel-based network analytic techniques (via stochastic actor-oriented modeling) to the study of dynamic interlocking corporate directorships. The data are gathered from public sources and the analysis will be made available to the scholarly and applied research through an online repository. The investigators will issue a press-release upon research completion through the University news services office.