Corporate Governance Propagation through Overlapping Directors Academic Article

abstract

• How are governance practices propagated across firms? This article proposes, and empirically verifies, that observed governance practices are partly the outcome of network effects among firms with common directors. While firms attempt to select directors whose other directorships are at firms with similar governance practices ("familiarity effect"), this matching of governance practices is imperfect because other factors also affect the director choice. This generates an "influence effect" as directors acquainted with different practices at other firms influence the firm's governance to move toward the practices of those other firms. These network effects cause governance practices to converge. 2011 The Author. Published by Oxford University Press on behalf of the Centre for Crime and Justice Studies (ISTD). All rights reserved.

authors

• Bouwman, Christa

published proceedings

• Review of Financial Studies

altmetric score

• 3.5

author list (cited authors)

• Bouwman, C.

citation count

• 140

complete list of authors

• Bouwman, Christa HS

publication date

• July 2011

publisher

• Oxford University Press (OUP)  Publisher

published in

• The Review of Financial Studies  Journal

keywords

• 35 Commerce, Management, Tourism And Services
• 3501 Accounting, Auditing And Accountability
• 3502 Banking, Finance And Investment
• 3507 Strategy, Management And Organisational Behaviour

Digital Object Identifier (DOI)

• 10.1093/rfs/hhr034

start page

• 2358

end page

• 2394

volume

• 24

issue

• 7

URL

• http%3A%2F%2Fdx.doi.org%2F10.1093%2Frfs%2Fhhr034