Faleye, O., Hoitash, R., Hoitash, U. (2011). The Costs of Intense Board Monitoring. Journal of Financial Economics, 101 (1), 160-181.
We study the effects of the intensity of board monitoring on directors’ effectiveness in performing their monitoring and advising duties. We find that monitoring quality improves when a majority of independent directors serve on at least two of the three principal monitoring committees. These firms exhibit greater sensitivity of CEO turnover to firm performance, lower excess executive compensation, and reduced earnings management. The improvement in monitoring quality comes at the significant cost of weaker strategic advising and greater managerial myopia. Firms with boards that monitor intensely exhibit worse acquisition performance and diminished corporate innovation. Firm value results suggest that the negative advising effects outweigh the benefits of improved monitoring, especially when acquisitions or corporate innovation are significant value drivers or the firm’s operations are complex.
For additional information contact Rani Hoitash (email@example.com)
Adams, S. M., Wolfman, T. G, Wells, R. (2010). Guys Who Get It: Business Leaders Who Understand the Value of Diversity at the Top. InterOrganization Network.
Conducted for the ION alliance, the authors collected date on women director and executive officers of public companies. The authors concluded that the doors to public company boardrooms and executive suites remain closed to too many talented women who have the experience and skill sets to make valuable contributions in both settings, although a number of women managed to attain corporate leadership positions during the past year. The data reported are consistent with those found in national studies: the numbers have stayed more or less the same, with small variations from year to year. And those numbers are way too low.
Adams, S.M. (2009) “Enabling or Facilitating Discriminatory Board Practices in Board Appointments: Where Are the Women?” In Board Members and Management Consultants: Redefining Boundaries (Pierre-Yves Gomez and Rickie Moore, Eds.), Research in Management Consulting series, Greenwich, Conn.: Information Age Publishing, 193-201.
The role consultants can play in promoting women on corporate boards is presented. Three arguments from existing literature for women on boards are described: firm performance, social justice and potential legal penalties. Ways are presented for consultants to facilitate getting more women on boards and to overcome barriers blocking progress to diversifying the composition of boards.
For additional information contact: Susan Adams (firstname.lastname@example.org).
Hoitash, U., Hoitash, R. (2009). Conflicting objectives within the board: evidence from overlapping audit and compensation committee members. Group Decision and Negotiation, 18(1), 57-73.
The board of directors is an elite group that faces multifaceted tasks. The board needs to implement decisions on a wide variety of subject matter. These decisions are often delegated to specialized sub-committees within the board. The different objectives of each sub-committee can result in conflicting interests leading to decisions that are sub-optimal. For example, at times, the objectives of the compensation and the audit committee are not aligned. The objective of compensation committees is to grant CEOs compensation packages reflective of their performance. Yet, these compensation packages might contain incentives that could motivate CEOs to influence the financial reporting process in order to reflect better performance, increasing the risk of poor quality financials. In contrast, the objective of audit committees is to oversee the quality of the financial reports and the process that leads to them. Therefore, they would favor compensation packages that reduce the risk of earnings manipulation. We examine public companies that have overlapping compensation and audit committee members and find a higher proportion of CEO incentive compensation in companies with less overlap among audit and compensation committee members. These results suggest that separating the members within these committees might contribute to the effectiveness of board decisions.
For additional information contact Rani Hoitash (email@example.com)
Adams, S.M., Flynn, P.M., and Wolfman, T. G. (2008) “ION: Organizational Networking to Harness Local Power for National Impact.” In Ron Burke, Val Singh, Diane Bilimoria, Morten Huse and Susan Vinnicombe (Eds.) Women on Corporate Boards of Directors: Research and Practice, Cheltenham, U.K.: Edward Elgar Publishing, 198-209.
The InterOrganizational Network (ION) is a collection of member organizations in the United States that share the mission of advancing women to positions of power in the business world, primarily to boards of directors and executive suites. ION’s history, structure, practices and accomplishments are described.
Adams, S.M. and Flynn, P.M. (2005) Actionable knowledge: Consulting to promote women on boards. Journal of Organizational Change Management, 18 (5), 435-450.
Efforts by The Boston Club to promote women on corporate boards are examined from multiple theoretical perspectives to identify a realistic theory that can be used. Findings suggest the need for a push/pull approach that addresses perceived social constraints and psychological needs using specified sequencing to promote readiness and action.
A copy of the article can be downloaded from the journal website.
Adams, S.M. and Flynn, P.M. (2005) Local knowledge advances women’s access to corporate boards. Corporate Governance: An International Review, 13 (6), 836-846.
The paper examines the status of women on corporate boards compared to other regions in the United States and around the world. Focusing on change efforts to overcome barriers to the boardroom, the role of local knowledge is highlighted to guide effective change. The data demonstrate that a local pool of women candidates in academia and consulting provide an alternative route to the boardroom than traditionally the case. Practical implications are discussed for women seeking board seats and for firms seeking qualified women director candidates.
A copy of the article can be downloaded from the journal website:
Flynn, P.M. and Adams, S. M. (2004) Corporate governance: Changes will bring more women to boards. Financial Executive, 20 (2), 32-35.
The presence of women in the boardroom varies by industry and by company size, Overall, however, women corporate directors continue to be rare. Changes in the corporate governance environment, such as the need for companies to document minimum director requirements and the steps taken to identify candidates, the push for more directors who are financial experts, and the demand for other types of functional expertise on the board, may help to bolster the number of corporate women directors.
Flynn, P.M. and Adams, S. M. (2004) A ‘perfect storm’ may lead to gains for women directors.Director’s Monthly, December, 15-18.
The expanding clout of women in the economy, the changing corporate governance climate, and the growing pool of women qualified to become directors may trigger a ‘perfect storm’ of opportunity to increase the number of women corporate directors. Women advocacy groups are combining their efforts, both to better benchmark statistical findings and to advance the status of women on corporate boards.
Flynn, P.M. and Adams, S. M. (2004) Women on board. BizEd, 3 (6), 34-39.
Women have made great strides in business, but their progress stops suddenly at the corporate boardroom door. Business schools must look beyond the discouraging statistics, help prepare women to become viable candidates for directors and executive officers, and educate business leaders more generally on the benefits of having women in the boardroom.
InterOrganization Network Regional Comparisons of Women on Corporate Boards, (Annually since 2004) ION publication.
The InterOrganization Network (ION) consists of regional organizations in the United States that combine their energies in advocating the advancement of women to positions of power in the business world, especially to boards of directors and executive suites. This report comparing statistics among ION member organizations is published each year.
See the ION website to download copies of the reports:
Census of Women Directors and Executive Officers in the Largest 100 Public Companies of Massachusetts, (Annually since 2003). Boston, Mass.: The Boston Club.
The status of women directors and executive officers in the state of Massachusetts is examined each year to assess the progress of advancing women in business leadership positions. Annual special topics explore key governance trends and barriers to diversifying these corporate boards.
See The Boston Club website to download copies of the annual census reports: