Search results

This study aims to investigate how audit committee members’ geographical location relative to corporate headquarters affects audit fees. The motivation for the paper rests on the observation that regulatory and market trends have significantly affected the composition of boards of directors and audit committees. To ensure that audit committees play their monitoring role, regulations now require directors’ independence and some level of financial expertise. The need to find directors who meet these requirements, as well as the advent of globalization and technological improvements lead firms to expand their reach when looking for directors.

The authors use a sample of 1,517 firm-year observations of Canadian firms from 2008 to 2017. The study relies on multivariate analyses.

The results show that, among nonlocal audit committee members, the presence of foreign directors is associated with higher audit fees. In contrast, other nonlocal audit committee members do not have a differential impact on audit fees. This effect is more prevalent in large firms. Moreover, having a foreign chair of the audit committee as well as foreign audit committee members who are not accounting experts appear to accentuate the increase in audit fees. A possible explanation for the finding is that, from the supply side, auditors assign a higher risk to firms with a higher percentage of foreign audit committee members. Alternatively, from the demand side, firms with foreign audit committee members may ask for more audit effort. Further analysis indicates that having a higher percentage of foreign audit committee members is associated with a higher likelihood of restatements, an indication of low audit quality.

To the best of the authors’ knowledge, this study is the first to document that auditors price the location of audit committee members and consider it when planning for their audit.

Despite the extensive study of director interlocks very little is known about gendered director networks. Boards of directors are primarily male; globally, only 5‐20 per cent of directors are women and change is described as glacially slow. The extent to which women directors are central to the network, or pushed to the margins, is unknown. Using the tools of social network analysis we extract the components of three director networks, a global and two national networks and locate the women directors. The paper aims to examine the persistence of director networks over time to determine whether gender related differences – apart from size – contribute to the apparent resistance to change.

The paper uses a longitudinal approach, comparing director networks on a global network scale (2004 and 2007 Fortune Global 200) and a national one (2004 and 2007 New Zealand Stock Exchange) with the iconic 1999 Fortune US 1000 dataset. After extracting the largest connected component, the female directors are separated out. From the 2004 and 2007 data director turnover is calculated to determine the stability of the networks.

Female directors are more likely to be found in the largest connected component of the mixed gender network, indicating that they are not marginalised. Despite high turnover rates, director networks are stable over time which may manifest as resistance to change.

The structure of gendered director networks is unknown and the location of women directors in the network components has not been considered in board diversity research. The results point to an underlying gender equity in all director networks. A new theoretical approach, glass network theory, has implications for boardroom diversity interventions.

Despite the growing importance of online word-of-mouth (WOM) with regard to television (TV) ratings, it is usually excluded from early prediction models. The purpose of this paper is to investigate the role of online WOM in TV ratings predictions, focussing on whether the incorporation of online WOM could improve predictions of TV ratings, and extracts meaningful rules for decision-making.

The author uses online WOM as a potential predictive variable in the TV ratings prediction model. The author matches a list of programs based on TV ratings for the movie channel with internet user reviews and TV ratings information from Yahoo! Movies (YM) and XYZ Company. The data set includes 71 movies, for which the data were analyzed with a hybrid model.

Grey relational analysis shows that online WOM is a useful ex ante determinant of TV ratings. As a predictive variable, it plays an essential role in enhancing TV ratings predictions. The experimental results also indicate that the proposed model surpasses other listed methods in terms of both accuracy and reduction of variables, while the proposed procedure yields a set of easily understandable decision rules that facilitate the interpretation of TV ratings information.

This paper identifies critical predictors of TV ratings and suggests that online WOM messages are a credible source. A hybrid model is developed to illustrate an intelligent prediction system for TV ratings.

The study demonstrates the effectiveness of online WOM and its impact on TV ratings. It offers an intelligent prediction system for TV ratings with practical implications for managers within the TV industry.

This paper aims to explore the effects of director network on open innovation. As an informal institutional arrangement, the director network is an important source for the enterprise to obtain external information, which provide resource basis for open innovation. Chief Executive Officer (CEO) as the top of management team could make short-sighted decisions for personal interests; this paper also investigates the moderating role of CEO short-sightedness between director network and open innovation.

This paper takes 4,102 Chinese listed companies from 2007 to 2020 as the research sample. By introducing network centrality and structural hole to measure director network and using data mining to extract key words related to CEO short-sightedness from annual reports, this paper constructs several multiple linear regression models to analyze the impact of director network on open innovation and the moderating role of CEO short-sightedness.

The analysis finds that director network can facilitate corporate open innovation. Enterprises can acquire more external resources in high centrality and structural hole of director network and promote ability for corporate open innovation. The relationship between director network and open innovation is negatively moderated by CEO short-sightedness. When the level of corporate governance and analyst attention is high, the negative effect of CEO short-sightedness on the innovation effect of directors’ networks is suppressed.

This is the first empirical paper to investigate the promotion effect of director network on open innovation as well as the negative moderating role of CEO short-sightedness. The findings bring new perspectives to the open innovation and enlightenments for practical activities from social relationship aspect.

The purpose of this paper is to investigate whether a pattern of interlocking directorates is emerging following reforms in Mexican corporations, and who, if any, are the powerful actors in this network. Drawing on the Bourdieusian notion of social capital, the paper also analyses theoretically the interlocking directorates, networks and powerful actors, and their influences on and potential implications for corporate governance mechanisms.

The data used in the study consisted of 1,442 internal and external board members of the population of 126 Mexican corporations trading on the Mexican Stock Market as of January 2011. Use of social network analysis (SNA) demonstrates individuals’ links with corporations and allows the production of spatial maps to visualise the network structure of interlocking boards.

Using the measures of SNA developed by Freeman (1979 and Bonacich (1972), the authors identify the most powerful and influential directors in the network structure of board members in Mexico. Board members with the greatest number of connections occupy central positions in the network. The authors also find a catalogue of corporate governance scandals. The inclusion of independent directors seems to have had no influence in ensuring better corporate governance.

Mapping out the directors’ links might offer excellent opportunities for policy makers to see how many companies a single director represents, how they share boards, and the implications for minority shareholders of sharing boards, and to understand the workloads of directors in carrying out the monitoring tasks expected of them.

This paper makes an important contribution by employing SNA to illustrate interlocking directorates and the positions of powerful and influential actors. Examining networks of directors from a “social capital” point of view also provides an understanding of why the role of independent directors remains toothless in family-dominated corporations.

This paper aims to investigate the roles of non-CEO inside directors (NCIDs) in the new CEO-firm matching process using the context of unplanned CEO departures when immediate CEO succession planning becomes a sole board responsibility. Although critics argue that inside directors decrease the monitoring effectiveness of a board, inside directors arguably possess superior firm-specific experience and knowledge that can be beneficial during the leadership transition.

The authors use a comprehensive, manually collected data set of unplanned CEO departures from 1993 to 2012.

The authors find that NCIDs play an important role in the CEO transitioning process. They help firms identify qualified inside replacements and provide stability as the new permanent or interim CEO. In addition, NCIDs facilitate the transfer of information and help the new external CEOs succeed. They show that the longer the NCID stays with the company, the longer the tenure of the new CEO. They also document that the presence of NCIDs improves operating and stock performance; especially when the new CEO is hired from outside of the firm.

The impact of NCIDs is particularly important when the firm hires an outsider as the new CEO. These results suggest that board composition affects frictions in the CEO labor market.

The literature has predominantly focused on the downside of having inside directors. Too many inside directors on a firm’s board is often associated with ineffective boards and entrenchment. To the contrary, the authors focus on a potential benefit of having inside directors.

Publishers are producing new reference sources on film at an astonishing rate. Each week reviews and advertisements appear to announce yet another book. Books vary in scope, subject emphasis, size, price, and of course, quality, and represent both new works and revised or added editions. Not only are American publishers active, but European firms are getting on the bandwagon, too.

We study the spatial diffusion of stock backdating, an instance of corporate misconduct about which public information was virtually absent until 2005. Contrary to the findings of Bizjack, Lemmon, and Whitby (2009), our results reveal that this “invisible” practice did not diffuse through board interlocks. Rather, stock backdating spread through geographic proximity: firms were more likely to backdate stock options to the extent that other firms located geographically close to them had done so. Lending support to the importance of localized interactions among members of the local business elite, the effect of geographical proximity was conditional on high levels of local board interlocks. Our findings regarding the differential impact of geographic proximity and board interlocks on the diffusion of this invisible practice are analogous to the diffusion pattern of controversial practices proposed by Davis and Greve (1997).

In remote rural areas such as the Alps, communities present a set of specific laws, norms and rules. According to social capital theory, these idiosyncrasies are founded on the closure of the actors in the community. On the contrary, as tourist destinations develop, enterprises and organizations gradually acquire non‐local directors in the boards, slowly affecting the identity of the local community. The aim of the paper is to analyze whether interlocking directorships with board members, residing outside of the destination, really increases openness in the boards of the organizations.

For a set of salient organizations in six tourism destinations in Austria and in Switzerland, the authors analyzed the networks of interlocks between local and non‐local (outside of the region, outside of the country) board directors.

Chi‐square tests for group differences in tie densities show that, with the exception of the control destination Zürich, intragroup linkages (i.e. locals and non‐locals among their peers) are stronger than intergroup linkages.

Further research must address the operationalization of social capital with a set of variables that could be checked against increasing interlocks with non‐local directors, and the validation of the results of the six case studies with additional tourist destinations and regions and in the context of other industries, where inherently the identity and the underlying social capital may be less developed.

The benefits of interlocking directorships with non‐local board members (i.e. acquisition of knowledge, increase of reputation for the destination) may fail to appear, when these actors do not effectively join with local board directors. In contrast, rather close networks of local board directors may increase the probability of collective action, effective sanctioning, and, generally speaking, the development of social capital.

A tourist destination or generally a community must ponder the benefits of either one of the aspects. That is, a closed community guarantees the preservation of reciprocal trust and the development of locally grown and accepted governance. In contrast, by increasing the organizational connections with external directors in the boards, the enterprises may gain additional knowledge, new financial resources, etc. but they may undermine historically grown rules and norms as well as routines that are founded on reciprocal trust and a common identity.

The functionalities of destination communities are of growing interest for tourism researchers. However, tourism research has never focused on networks of interlocking directorships. By analyzing interlocking directorships in the context of tourist destination communities, this research opens a new stream of discussion for both community research, and the usefulness of research on interlocking directorships.

The study here examines how business actors adapt to changes in networks by analyzing their perceptions or their network pictures. The study is exploratory or iterative in the sense that revisions occur to the research question, method, theory, and context as an integral part of the research process.

Changes within networks receive less research attention, although considerable research exists on explaining business network structures in different research traditions. This study analyzes changes in networks in terms of the industrial network approach. This approach sees networks as connected relationships between actors, where interdependent companies interact based on their sensemaking of their relevant network environment. The study develops a concept of network change as well as an operationalization for comparing perceptions of change, where the study introduces a template model of dottograms to systematically analyze differences in perceptions. The study then applies the model to analyze findings from a case study of Norwegian/Japanese seafood distribution, and the chapter provides a rich description of a complex system facing considerable pressure to change. In-depth personal interviews and cognitive mapping techniques are the main research tools applied, in addition to tracer studies and personal observation.

The dottogram method represents a valuable contribution to case study research as it enables systematic within-case and across-case analyses. A further theoretical contribution of the study is the suggestion that network change is about actors seeking to change their network position to gain access to resources. Thereby, the study also implies a close relationship between the concepts network position and the network change that has not been discussed within the network approach in great detail.

Another major contribution of the study is the analysis of the role that network pictures play in actors' efforts to change their network position. The study develops seven propositions in an attempt to describe the role of network pictures in network change. So far, the relevant literature discusses network pictures mainly as a theoretical concept. Finally, the chapter concludes with important implications for management practice.