Getting them to think outside the circle: Corporate governance, CEOs' external advice networks, and firm performance

    Authors

    M. L. McDonald; P. Khanna;J. D. Westphal

    Comments

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    Abbreviated Journal Title

    Acad. Manage. J.

    Keywords

    STRATEGIC DECISION-MAKING; AGENCY THEORY PERSPECTIVE; MANAGERIAL; INCENTIVES; FINANCIAL PERFORMANCE; SOCIAL-INFLUENCE; WEAK TIES; OWNERSHIP; MANAGEMENT; DIRECTORS; BOARD; Business; Management

    Abstract

    This article contributes to the social networks literature by examining how corporate governance factors influence CEOs' external advice-seeking behaviors. We incorporate insights from social networks research into an agency theory perspective to predict, and demonstrate empirically, that governance factors recommended by agency theory increase CEOs' tendencies to seek out advice contacts who are likely to offer perspectives on strategic issues that differ from their own; these advice-seeking behaviors ultimately enhance firm performance. Accordingly, this article also contributes to the corporate governance literature by describing how and why CEOs' advice networks mediate the effects of governance factors on firm performance.

    Journal Title

    Academy of Management Journal

    Volume

    51

    Issue/Number

    3

    Publication Date

    1-1-2008

    Document Type

    Article

    Language

    English

    First Page

    453

    Last Page

    475

    WOS Identifier

    WOS:000257297100004

    ISSN

    0001-4273

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