Iron fists or velvet gloves: examining antecendents and consequences of board control orientation and collaboration orientation

Abstract

Following corporate scandals of 1990s and early 2000s, corporations in both United States and Europe began to untangle the board leadership structure and separate the Board Chair and the CEO positions. The working relationship between Board Chair and CEO becomes an increasingly vital leadership phenomenon as it has important implications on firms’ strategic choice and performance. Board Chairs can focus on monitoring and control and/or collaborate with the CEO. However, we know relatively little about the antecedents of control and collaboration orientations. Drawing from the relational demography literature, the political ideology literature, and recategorization theory, Study 1 of this dissertation theorizes and empirically tests how the demographic differences between Board Chair and CEO determine the type of orientation(s) a Board Chair may exhibit and how their political ideology congruence may change these relationships. Moreover, given that much of the performance implications of control and collaboration orientations remains unknown, especially in the M&A setting. Drawing from the threat rigidity theory and the resource dependence theory, Study 2 of this dissertation aims to solve this puzzle by examining how these contrasting orientations influence firms’ acquisition activities, target selection approach, subsequent post-acquisition performance, and how absorptive capacity may strengthen or weaken these relationships. Hypotheses are tested based on data selected from publicly traded companies that have separate board leadership structures from 2010-2013 and companies that completed at least one acquisition during those years.