Do Boards with Different Compositions Face Different Organizational Information Contexts?
AbstractResponding to recent calls in the literature to examine the organizational context of boards of directors, this study investigates whether different board compositions are associated with different organizational information contexts. The results of this study may shed light on the findings of the extant empirical governance literature, revealing that boards with outsiders are more effective in monitoring, despite outside directors’ information asymmetry compared to inside directors. In this study the organizational information context is measured in terms of the availability of management control information in the firm. Our results provide evidence that outsider presence on the board is significantly associated with a more formal and objective information context characterized by a higher availability of formal planning, budgeting and variance analysis information within the firm. Given this available information, which allows comparisons between planned and actual company performance, outside directors’ information seeking behaviour is likely to be productive and to result in a reduction of outside directors’ information asymmetry.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Katholieke Universiteit Leuven, Faculteit Economie en Bedrijfswetenschappen in its journal Review of Business and Economics.
Volume (Year): LV (2010)
Issue (Month): 1 ()
Corporate Governance; Board Composition; Organizational Context; Management Control Systems;
Find related papers by JEL classification:
- M41 - Business Administration and Business Economics; Marketing; Accounting - - Accounting - - - Accounting
- G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
You can help add them by filling out this form.
reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Hilde Roos) The email address of this maintainer does not seem to be valid anymore. Please ask Hilde Roos to update the entry or send us the correct address.
If references are entirely missing, you can add them using this form.