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Does the Rolodex Matter? Corporate Elite's Small World and the Effectiveness of Boards of Directors

Bang Dang Nguyen
2011 Social Science Research Network  

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This paper investigates the impact of social ties on the effectiveness of boards of directors. When the CEO and a number of directors belong to the same social networks, the CEO is less likely to be dismissed for poor performance. The results are robust to different measures of performance and networks, consistent after controlling for CEO ability, and not due to connected boards' superior information. Socially connected CEOs are also more likely to find new and better employment after a forced
more » ... departure. Evidence from the paper suggests that close social ties among board members impact the workings of the board of directors.
doi:10.2139/ssrn.864184 fatcat:lkl47kzytrepjbwkypz4ojq4ey
Citation

Bang Dang Nguyen. "Does the Rolodex Matter? Corporate Elite's Small World and the Effectiveness of Boards of Directors." Social Science Research Network (2011)