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Robert C. Pozen, Chairman Emeritus of MFS Investment Management and a long-time scholar of corporate governance, has proposed a model of professional board directorship that responds to the three main factors he believes underpin ineffective board decision making: the large size of boards; the lack of specific industry expertise; and inadequate director time commitment. The paper aims to discuss these issues.

The authors critically evaluate the efficacy of Pozen's proposed corporate governance model, addressing the three main factors underpinning ineffective board decision making.

A professional board consisting of retired executives with industry-specific expertise is vulnerable to a groupthink mentality, as well as to the availability of such individuals for board directorship seats. Moreover, while industry-specific expertise is a desired attribute of an independent board director, there are other attributes that firms are looking for, including international, regulatory/governmental, risk, technology, and marketing expertise. Lastly, Pozen's recommendations to reduce board size to seven members, as well as increasing the number of hours that independent directors spend on board-related activities (and commensurate compensation received), should be seriously considered as potential value-adding, corporate governance improvements.

The authors critically evaluate a corporate governance model that, based on director-related issues arising from the recent global financial crisis, has resurrected the concept of a “professional board” of directors. The authors utilize state-of-the-art academic literature from the fields of corporate governance and organizational behavior to evaluate the merits and de-merits of the proposed corporate governance model, and present their findings (and recommendations) for improvements in corporate governance practices.

The purpose of this paper is to examine the impact of high‐level‐executives joining the Board of another US company on the shareholder wealth of the firms in which these executives work.

The “event‐study” methodology is used first to estimate the shareholder effects and then, through multivariate regression analysis, establish a relationship of these effects with executive characteristics.

The paper documents that the abnormal return becomes more positive the closer the executive is to retirement and more negative as the number of other corporate Boards the executive already sits on increases. Unlike previous research, it is not found that prior performance of the employing company helps explain the cross‐sectional variation in the announcement day abnormal returns.

The result supports the concerns of shareholder activists that key executives joining the Boards of other companies do their home shareholders a disservice by being spread too thin. It supports the hypothesis that investors interpret a CEO joining the Board of another firm as value decreasing.

The paper provides a link between managerial labor and shareholder wealth. Important and high‐level‐executives, while attempting to enhance their own personal benefits by joining other Boards, can destroy shareholder value of the company for which they work.

We survey board practices in Brazil. Brazilian companies are commonly controlled by family groups or through shareholders agreements. Controlling shareholders hold a very large portion of voting shares, much more than the minimum necessary to retain control. There is widespread evidence of shareholder expropriation, legal protection is weak, and stock issuance has been halted by low valuations and tax avoidance. Half of the boards are either too small or too big. Board committees are ineffective. Board procedures are rarely formalized and board members and CEOs are not evaluated in most cases. Most board members are not shareholders. No more than 21 percent of board members are independent and only 2 percent of them are elected by independent shareholder groups. It is likely the improvements in board structure and procedures will be restricted to large public corporations with foreign stock ownership while most companies avoid going public.

The paper aims to at CEO succession in light of regulations and post‐SOX dynamics.

The paper examines CEO succession in light of regulations and post‐SOX dynamics.

It has been increasingly argued that the formal CEO succession process is in disrepair. The post‐SOX dynamics described in previous sections promise to even further confound boards of directors' responsibilities for succession planning and execution.

The paper provides executives with information on issues boards must consider in succession planning.

The paper is of particular value to CEOs and other board members.

Boards presently are considered the most critical component in improving corporate governance (CG). Board diversity is increasingly being recommended as a tool for enhancing firm performance. Academic research and regulatory action regarding board diversity are focussed mainly on gender and ethnic composition of boards. However, the perspective of board members on board diversity and its impact is mostly missing. Moreover, while strategic leadership perspective suggests that a broader set of upper echelon’s characteristics may shape their actions, empirical evidence investigating the impact of less-explored attributes of diversity is almost non-existent. While the research on the input–output relationship between board diversity and firm performance remains equivocal, an intervening relationship between board diversity and board effectiveness needs to be understood. The purpose of this paper is to address all three limitations and explore the subject from board members’ perspective.

The paper presents the findings of qualitative, exploratory research conducted by interviewing 42 board members of FTSE 350 companies. The data are analysed thematically.

The findings of the research suggest that board members of FTSE 350 companies consider the diversity of functional experience to be a critical requirement for boards’ role-effectiveness. Functionally diverse boards manage external dependencies more effectively and challenge assumptions of the executive more efficiently, thus improving CG. The findings significantly contribute to the literature on board diversity, as well as to strategic leadership theory and other applicable theories. The research is conducted with a relatively small but elite and difficult to approach set of 42 board members of FTSE 350 companies.

The paper makes a unique and significant contribution to praxis by presenting the perspective of practitioners of CG – board members. The findings may encourage board nomination committees to seek board diversity beyond the gender and ethnic characteristics of directors. The findings may also be relevant for policy formulation, as they indicate that functionally diverse boards have improved effectiveness in a range of board roles.

Board diversity is about building a board that accurately reflects the make-up of the population and stakeholders of the society where the company operates. The aim of board diversity is to cultivate a broad range of attributes and perspectives that reflects real-world demographics as boards need to continue to earn their “licence to operate in society” as organisations have a responsibility to multiple constituents and stakeholders, including the community and the wider society within which they exist. Building social capital through diversity has value in the wider context of modern society and achieving social justice.

The paper makes an original and unique contribution to strategic leadership theory by strengthening the argument of the theory. The paper explores beyond widely researched attributes of gender and ethnicity on boards and explores the impact of a less-researched characteristic of directors – their functional experience. Moreover, the paper opens the “black box” of CG – boards, and presents the perspectives of board members. The findings indicate that board members in FTSE 350 boards define diversity more broadly than academics and regulatory agencies often do.

The purpose of this paper is to investigate the effect of board diversity on firm performance.

From different theories perspective and based on data collected about the composition of board of directors in Spanish non-financial firms, the paper determines statistically the relationship between board diversity and performance for the period 2005-2015.

The results reveal differences between inside and outside board members in terms of the performance impact of board diversity. Thus, while age diversity has a positive effect on firm performance in both, insider and outsider directors, nationality mix is associated with higher performance levels just in the case of insiders. In addition, educational diversity seems to have a negative effect on performance for supervisory directors. On the contrary, the authors do not find any evidence about a possible influence of gender diversity on performance.

The authors are just taking some board’s attributes, but the concept of board diversity is a very wide one. In this regard, less traditional methodologies that do not rely on extant archival databases may be necessary to get a deeper understanding of the impact of boards on firm’s performance.

This study demonstrates that the claim of “one size fits all” often implicitly stated by regulators and advisors is misleading. Board’s attributes analysis over the boardroom as a whole turns out in too simplistic conclusions. This is particularly important for regulators: a rigorous analysis should be performed before including general recommendations about, for instance, the age or the board tenure in corporate governance codes.

As diverse boards contribute to a greater social value, the paper analyses the performance consequences of demographic diversity.

The paper analyses the firm performance impact of diversity among insider directors, on the one hand, and outsider directors, on the other. Although there is a clear difference between the roles assigned to insider and outsider directors, to the authors’ knowledge, there has been no analysis of the firm performance effect of the diversity of each type of director using the same sample and methodology.

By looking at both theoretical and empirical findings, this study aims to investigate whether gender diversity results in improved corporate governance and financial performance for companies.

An analysis of the board composition of the Johannesburg Securities Exchange Top 40 companies as at 30 June 2013 and a comparison of the financial performance of the company were conducted.

Female directors were found to make up, on average, 18.78 per cent of the board of directors, with the majority of these women being in non-executive positions. Women representation appears to influence company performance positively when using accounting-based measures of performance (such as return on assets and return on equity), but negatively when using market-based measures (such as Tobin’s Q). The critical mass concept is also assessed and is found to have a positive effect.

These findings are of relevance to the boards of directors adhering to corporate governance requirements by challenging the role of women on the board of directors, as well as that of investors and those in practice, to understand the current status of women representation.

The purpose of this paper is to investigate whether ex ante board connections and director retention result in agency costs to target company shareholders in the form of reduced payment in mergers and acquisitions transaction.

The authors employ detailed data of ex ante board connection and director retention in the mergers and acquisition in the UK from 1999 to 2015. Ex ante board connections are measured as proportion of target and acquirer companies’ directors worked on the same board at any time prior to the takeover, while director retention is measured as proportion of target companies’ directors remains on board after the takeover is completed. For mergers and acquisition payment characteristics, the authors examine takeover premium, cash payment percentage and offer price adjustment.

The authors find that ex ante board connections and director retention lead to reduced offer prices and lower proportions of cash payment. Notably, when there is no connection and target directors are not retained, the authors find that the bidding companies increase their final offer by £14m more than in other scenarios. The authors also document strong evidence that ex ante board connections lead to a higher probability of director retention.

The paper highlights that ex ante board connections and director retention will lead to a significant cost on target company shareholders. The authors recommend that a more detailed set of information on ex ante board connections and intended target board retention should be disclosed.

This paper aims to combine the agency theory and efficiency wage theory to explore the effects of relative compensation for executive directors with marketing experience on two marketing outcomes (marketing efficiency and market share) and the moderating roles of ownership type (private vs state-owned enterprises) and market concentration in this process.

A total of 2,753 firm-year observations from Chinese listed companies (from 2010 to 2014) were retrieved from China Stock Market and Accounting Research database and analyzed using firm random-effects with industry, year and region fixed effects.

Relative compensation has a positive effect on both marketing efficiency and market share, and these effects are moderated by ownership type and market concentration. Specifically, the positive effect of relative compensation on marketing efficiency and market share are stronger for central state-owned enterprises (SOEs) compared to local SOEs and private-owned enterprises but the results are mixed for market concentration.

This study shows that paying higher compensation to the executive directors with marketing experience can enhance marketing performance, but the data does not allow identification of the actual actions taken by these directors for this.

This study highlights the importance of appropriate compensation for directors with marketing experience to motivate them to make better marketing decisions to overcome the challenges posed by market concentration and agency conflicts.

This paper points out the importance of having directors with marketing experience and paying them suitable compensation to motivate them to be more effective.

The purpose of this study is twofold: to evidence the disclosure practices of Spanish companies in relation to a voluntary typology of strategic information; and to determine the factors that explain these practices. Among the factors considered, the study seeks to focus on the role of the Board of Directors in depth. According to Agency Theory, strategic information has positive consequences on external funds costs. On the other hand, Proprietary Costs theory limits these practices, given that they can lead to competitive disadvantages.

First, online strategic information disclosure practices are analysed by examining non‐financial quoted Spanish firms. A disclosure index is created, and subsequently, certain factors related to corporate governance – Activity, Size and Board Independence – as well as other factors traditionally analysed, are used to explain the volume of strategic information disclosed on the internet.

The results indicate that Spanish companies, on average, give out little strategic information, mainly related to objectives, their mission, and the company's philosophy. “Company annual planning” and “Information on risks” are scarcely disclosed. The findings also emphasise that companies where the Chairperson of the Board is the same person as the CEO and, moreover, in which there is a lower frequency of meetings, disclose a greater amount of strategic information on their web sites.

The findings suggest that the disclosure of strategic information is a decision taken by executives with the aim of satisfying the demands of creditors and investors. The Board of Directors represents the shareholders' interests, but it does not participate in strategic decision‐making disclosure, maybe due to the fact that the proprietary costs lack influence.

The link between corporate governance and strategic information disclosed online has scarcely been analysed in previous literature. This study provides interesting insights into how several Board characteristics can affect the disclosure of strategic information on the internet.