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Where do international board members come from? Country-level antecedents of international board member selection in European boards

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  • van Veen, Kees
  • Sahib, Padma Rao
  • Aangeenbrug, Evelien
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    Abstract

    In this paper, it is argued that boards internationalize by recruiting international directors in order to increase companies’ performance. However, increasing nationality diversity on a board can be costly considering that it potentially creates cooperative problems on a board due to fault-lines and separation processes. As a result, boards will prefer international candidates who are more similar to themselves on a variety of ‘distances’. Based on data collected regarding 5683 board members of 361 companies from 15 countries in 2005–2007, we discover that the greater the distance (cultural, institutional and geographical) between the candidates’ and the companies’ country-of-origin, the lower the fraction of board members of that nationality on boards. Subsequently, it is argued that historical ties between countries play a ‘distance compressing’ role and partially compensate for the effects of distance. A colonial tie between countries will make recruitment of these particular nationalities more likely than others.

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    Bibliographic Info

    Article provided by Elsevier in its journal International Business Review.

    Volume (Year): 23 (2014)
    Issue (Month): 2 ()
    Pages: 407-417

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    Handle: RePEc:eee:iburev:v:23:y:2014:i:2:p:407-417

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    Related research

    Keywords: Board of directors; Colonial ties; Cultural distance; Europe; Gravity model; Nationality diversity; Recruitment;

    References

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