Publication Type

Journal Article

Version

publishedVersion

Publication Date

10-2021

Abstract

Drawing on status characteristics theory, we explore how boards’ social structures influence board turnover. We theorize that (1) understanding directors’ relative standing and spheres of influence in the local status hierarchy creates deference structures that reduce conflict and enhance stability, thereby reducing board turnover; and (2) shared performance expectations and attraction based on homophily in the global status hierarchy can also reduce conflict and enhance stability, and thus serve as another means of reducing board turnover. Using data on the five years following the initial public offerings (IPOs) of 218 firms that went public between 2001 and 2005, we find that overlaps in directors’ local status characteristics captured by their tenure and expertise and directors’ global status homogeneity increase the likelihood of director exit. However, the combinations of directors’ local and global shared specific status characteristics shape the relative salience of the positive or negative effects of board’s local status characteristics, leading to different effects on board turnover.

Keywords

Board of Directors, Corporate Governance, Upper Echelons, Board Turnover, IPO, Status

Discipline

Business | Business Law, Public Responsibility, and Ethics | Organizational Behavior and Theory

Research Areas

Strategy and Organisation

Publication

Academy of Management Journal

Volume

64

Issue

5

First Page

1472

Last Page

1496

ISSN

0001-4273

Identifier

10.5465/amj.2017.1144

Publisher

Academy of Management

Embargo Period

3-23-2021

Additional URL

https://doi.org/10.5465/amj.2017.1144

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