James D. Westphal

Collaboration in the Boardroom: Behavioral and Performance Consequences of CEO-Board Social Ties

Empirical research has typically rested on the assumption that board independence from management enhances board effectiveness in administering firms. The present study shows how and when a lack of social independence can increase board involvement and firm performance by raising the frequency of advice and counsel interactions between CEOs and outside directors. Hypotheses were tested with original survey data from 243 CEOs and 564 outside directors on behavioral processes and dynamics in management-board relationships

Cooperative or Controlling? The Effects of CEO-Board Relations and the Content of Interlocks on the Formation of Joint Ventures

This study examines the influence of the social network of board interlocks on strategic alliance formation. Our theoretical framework suggests how board interlock ties to other firms can increase or decrease the likelihood of alliance formation, depending on the content of relationships between CEOs (chief executive officers) and outside directors. Results suggest that CEO-board relationships characterized by independent board control reduce the likelihood of alliance formation by prompting distrust between corporate leaders, while CEO-board cooperation in strategic decision making appears to promote alliance formation by enhancing trust. The findings also show how the effects of direct interlock ties are amplified further by third-party network ties.

Director Reputation, CEO-Board Power, and the Dynamics of Board Interlocks

Both authors contributed equally to the paper. We are grateful to Jerry Davis, Ranjay Gulati, Paul Hirsch, Willie Ocasio. Toby Stuart, Brian Uzzi, and seminar participants at Carnegie Mellon University, the Harvard Business School, and UCLA for comments and suggestions on earlier versions of this paper. The paper has also benefited from the helpful comments of Mark Mizruchi and the anonymous reviewers for ASO, as well as the editorial assistance of Linda Johanson. This study advances research on CEO-board relationships, interlocking directorates, and director reputation by examining how contests for intraorganizational power can affect interorganizational ties. We propose that powerful top managers seek to maintain their control by selecting and retaining board members with experience on other, passive boards and excluding individuals with experience on more active boards. We also propose that powerful boards similarly seek to maintain their control by favoring directors with a reputation for more actively monitoring management and avoiding directors with experience on passive boards. Hypotheses are tested longitudinally using CEO-board data taken from 491 of the largest U.S. corporations over a recent seven-year period. The findings suggest that variation in CEO-board power relationships across organizations has contributed to a segmentation of the corporate director network. We discuss how our perspective can reconcile contrary views and debates on whether increased board control has diffused across large U.S. corporations.*

Who Shall Succeed? How CEO/Board Preferences and Power Affect the Choice of New CEOs

This study shows how social psychological and sociopolitical factors can create divergence in the preferences of an incumbent CEO and existing board regarding the desired characteristics of a new CEO, and how relative CEO/board power can predict whose preferences are realized. Using extensive longitudinal data, we found that more powerful boards are more likely to change CEO characteristics in the direction of their own demographic profile. Outside successors are also typically demographically different from their CEO predecessors but demographically similar to the boards.

The Other Pathway to the Boardroom: Interpersonal Influence Behavior as a Substitute for Elite Credentials and Majority Status in Obtaining Board Appointments

Using survey data on interpersonal influence behavior from a large sample of managers and chief executive officers (CEOs) at Forbes 500 companies, we examine how ingratiatory behavior directed at individuals who control access to board positions can provide an alternative pathway to the boardroom for managers who lack the social and educational credentials associated with the power elite. Findings show that top managers who engage in ingratiatory behavior toward their CEO, with ingratiation comprising flattery, opinion conformity, and favor-rendering, will be more likely to receive board appointments at other firms where their CEO serves as director and at boards to which the CEO is indirectly connected in the board interlock network. Further results suggest that interpersonal influence behavior substitutes to some degree for the advantages of an elite background or demographic majority status. Our findings help explain why norms of director deference to CEOs have persisted despite increased diversity in the corporate elite and have implications for research on corporate governance, social networks in the corporate elite, and for the sociological question of whether demographic minorities and individuals who lack privileged backgrounds have equal access to positions of leadership in large U.S. companies. Our study ultimately suggests that such individuals face a rather subtle and perhaps unexpected form of social discrimination, in that they must engage in a higher level of interpersonal influence behavior in order to have the same chance of obtaining a board appointment.