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Investigating the Relationship Between Board Characteristics and Board Information

Author

Listed:
  • Matthew A. Rutherford
  • Ann K. Buchholtz

    (Terry College of Business at the University of Georgia)

Abstract

While corporate governance research has had some success tying boards' demographic characteristics to relatively distant outcomes such as CEO pay and succession, numerous studies have indicated that a major weakness of this research is that it has largely ignored the intervening behaviours associated with board vigilance. This study begins to answer this call by examining the relationship between boards' demographic characteristics and boards' information-gathering behaviour. Using primary and secondary data from 149 firms, this study finds that an increase in the proportion of outside directors on a board is associated with an increase in boards' information quality and proactive information-seeking. In addition, an increase in outside director tenure is associated with boards exchanging information more frequently. Consistent with agency theory predictions, these findings suggest that vigilant boards are likely to take actions aimed at reducing the level of information asymmetry between them and their CEOs. Copyright (c) 2007 The Authors; Journal compilation (c) 2007 Blackwell Publishing Ltd.

Suggested Citation

  • Matthew A. Rutherford & Ann K. Buchholtz, 2007. "Investigating the Relationship Between Board Characteristics and Board Information," Corporate Governance: An International Review, Wiley Blackwell, vol. 15(4), pages 576-584, July.
  • Handle: RePEc:bla:corgov:v:15:y:2007:i:4:p:576-584
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    Citations

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    Cited by:

    1. Balsmeier, Benjamin & Buchwald, Achim & Stiebale, Joel, 2014. "Outside directors on the board and innovative firm performance," Research Policy, Elsevier, vol. 43(10), pages 1800-1815.
    2. Niamh M. Brennan & Collette E. Kirwan & John Redmond, 2016. "Accountability processes in boardrooms: A conceptual model of manager-non-executive director information asymmetry," Accounting, Auditing & Accountability Journal, Emerald Group Publishing, vol. 29(1), pages 135-164, January.
    3. Elizabeth N. K. Lim, 2015. "The role of reference point in CEO restricted stock and its impact on R&D intensity in high-technology firms," Strategic Management Journal, Wiley Blackwell, vol. 36(6), pages 872-889, June.
    4. Astrid Rudyanto, 2017. "State Ownership, Family Ownership, and Sustainability Report Quality, The Moderating Role of Board Effectiveness," GATR Journals afr129, Global Academy of Training and Research (GATR) Enterprise.
    5. repec:eee:reveco:v:50:y:2017:i:c:p:275-304 is not listed on IDEAS
    6. repec:kap:rqfnac:v:49:y:2017:i:4:d:10.1007_s11156-017-0615-3 is not listed on IDEAS
    7. Rahimah Mohamed Yunos Author_Email: rahim221@johor.uitm.edu.my & Malcolm Smith & Zubaidah Ismail & Syahrul Ahmar Ahmad, 2011. "Inside Concentrated Owners, Board Of Directors And Accounting Conservatism," Annual Summit on Business and Entrepreneurial Studies (ASBES 2011) Proceeding 2011-053-178, Conference Master Resources.
    8. Shiang-Min Meng, 2013. "Application of Laozi’s Daodejing to Current Corporate Governance," International Journal of Asian Social Science, Asian Economic and Social Society, vol. 3(10), pages 2114-2133, October.
    9. repec:eee:jbrese:v:80:y:2017:i:c:p:35-44 is not listed on IDEAS

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