Board composition and bank performance in a small island developing state: The case of Curacao

Based on agency theory, this paper contributes to the literature by assessing the effects of Supervisory Board size, gender diversity, and multiple directorship on performance within the banking industry of the small island developing state: Curacao. The research made use of the data drawn from annual reports of locally generated banks and its subsidiaries. Results from linear regressions indicate a positive relationship between multiple directorship and bank performance, and a negative association between bank outcomes and both gender diversity and board size. According to these results, it is concluded that the legislation on corporate governance for credit institutions in Curacao should incorporate a maximum number of members on the board, as well as promote interlocking directorates and quotas by gender.

Research on Interlocking Directorates in Family Business: Evidence from Scopus Bibliometric Data

We examined the trend of studies on interlocking directorates in family businesses using bibliometric data mined from the Scopus database. Search terms including “family business” and seven other variant terms (including family ownership) plus a wildcard (interlock*) yielded only 17 peer-reviewed papers written in the English Language, published between 1999 and 2020. We used graphical tools to summarise the data. Pearson’s r was employed to analyse the data on three of Scopus’ bibliometric indicators (CiteScore, SCImago Journal Rank, and Source Normalized Impact per Paper) using JASP. The only 17 articles on interlocking directorates in family business poorly compare with the 4,792 articles returned when the wildcard was dropped. Thus, the data show that interlocking directorates in family businesses is a grossly neglected niche in the otherwise steadily maturing field of family business research. The distribution of the scanty literature by country of origin, research purpose pursued, theories employed as explanatory frameworks, the most frequently studied interlocking directorate typologies, and their respective implications were pointed out.

Market ranking and network structure: pathway to dominance

PurposeThe relationship between interlocking directorates and firm performance has been increasingly debated, with a focus on whether firm's centrality in interlock networks is associated with performance. The purpose of this study is to examine not only how a firm's position in this network is associated with performance but also how the performance of network partners can impact a firm's performance. This study examines how firms effectively utilise the interlock network to achieve the goal of higher market capitalisation – termed market capitalisation rank (MCR).Design/methodology/approachThe premise of the study is the UK FTSE 350 firms from 2014 to 2018. The paper makes use of a temporal network autocorrelation model to examine how firm characteristics, the structural position in the interlock network and the performance of network partners affect MCR over time.FindingsThe analysis indicates that firms with ties (via the interlock network) to firms with high market capitalisation are more likely to enhance their own MCR, highlighting network partners have the opportunity to play a critical role in a firm's dominance strategy to optimise firm value.Originality/valueThe value of this research is that it does not only look at the impact of a firm's position in the network on performance, but the impact of the performance of network partners on a firm's market performance as well.

Do Interlocks Lead to the Convergence of Interfirm Innovation Performance? Evidence From China

We examine how interlocking directorates influence innovation performance differentials between firms. Our study offers a new perspective of the effect of interlocking directorate ties upon innovation performance, focusing on network effects on interfirm performance. Using a sample of China’s listed companies for the period 2012–2016, we empirically examined the relationship between board interlocks and interfirm innovation performance differentials. The results demonstrate that the presence of board interlocks reduces interfirm innovation performance differentials and leads to a convergence of innovation performance between the connected companies. Furthermore, cross-level analysis found that the relationship between board interlocks and interfirm innovation performance differentials is moderated by the interfirm industry attributes and demographic characteristics of the board. This study expands the existing research in explaining the driving mechanism of enterprise innovation performance as affected by interlocking directorate ties.

Board Interlocks as a Diffusion of Strategic Information – Does it Work? A Polish Case

Several theories point to the influence of board interlocks on the diffusion of important resources, mainly information. Empirical confirmation of the information functionality of the interlocking directorates network was obtained in the case of network research under the Anglo-Saxon model of corporate governance as well as the continental model in developed countries. Since the early 1990s another model of corporate governance in CEE countries has been developed. The specific determinants of the development of this model do not allow us to unequivocally state similar causes and consequences of interlocking directorates in relation to the most frequently studied western corporate governance models. The aim of this study is to determine the importance managers attach to these relationships within a corporate network as a source of strategic information that is important to the company’s strategic decision-making process, in the context of the Polish governance model. The research employs the case-study method and presents the results of five case studies of companies listed on the Warsaw Stock Exchange. The research, on the one hand, suggests that the network embeddedness of Polish listed companies is of minor significance; on the other hand, it pointed to the existence of two main types of corporate networks: one inwardly directed and focused on supervisory board members’ controlling function performed with a view to protecting the shareholders’ equity ownership, and the other orientated towards external relationships, often distant from the original industry, in order to obtain information that supports new initiatives. What seems to most determine the behaviour of company managers is the corporate culture resulting from the presence of a foreign owner from a Western European country. In general, the findings confirm the importance of the network of interlocking directorates more as an instrument of control than diffusion of strategic information.

Board interlocks and imitation in corporate acquisitions: A literature review and avenues for future research

Interlocking directorates create the conditions for social embeddedness and represent a key driver of the diffusion of strategies and practices (Okhmatovskiy & David, 2012). Among the multiple focuses of analysis, board interlocks have been regarded as a source of inter-organizational imitation in the context of corporate acquisitions (Xia, Ma, Tong, & Li, 2018; de Sousa Barros, Cárdenas, & Mendes-Da-Silva, 2021). Imitation indeed has been acknowledged as one of the primary implications of interlocking directorates (Shropshire, 2010). This study, therefore, offers an in-depth summary and discussion of how interlocks of business elites influence corporate acquisitions. Multiple contributions are provided. First, the paper develops a thematic analysis in which multiple research focuses are identified, namely acquisition activity and emphasis, acquisition timing in mergers and acquisitions (M&A) waves, acquisition process, and acquisition premium. Second, it elaborates on a number of potential avenues for future research. Specifically, it identifies three main lines of inquiry related to the imitation scope, performance at both firm- and industry-level, and potential theoretical cross-fertilizations. Moreover, methodological considerations are discussed especially in terms of operationalization choices and their implications. To the best of the author’s knowledge, this paper represents the first attempt to review the literature on the interlocks-acquisition field.

Corporate law and governance: A case of Tunisia after the Arab Spring

This paper reviews the corporate governance practices of listed Tunisian companies. Besides that, the paper explores the evolution of corporate governance legislation between 2013 and 2017 in order to identify the changes caused by the revolution to accompany the current context’s needs and the democratic transition in Tunisia. Although the most of companies in Tunisia are dominated by family small and medium enterprises (SMEs) and very small enterprises (VSEs) we have chosen to focus on listed companies. These companies present more advanced practices of corporate governance given the legislation in force. Results of this paper shed light on several important features of the Tunisian corporate governance system, for example, interlocking directorates. It is interesting to notice that a limited number of directors control the majority of the market capitalization in Tunisia. The practice of interlocking directorates reflects the Tunisian way of economic lobbying. As for gender diversity, although there are no laws imposing a minimum quota of women directors, the proportion of female board members has slightly increased during the last years, moving from 7.87% in 2013 to 9.92% in 2017. In contrast to Arab and African countries, it should be noted that the majority of women directors sit on boards as members of the family controlling the company or because they are civil servants representing the state’s interests in state-owned enterprises