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The effect of board capital and CEO power on strategic change
Author(s) -
Haynes Katalin Takacs,
Hillman Amy
Publication year - 2010
Publication title -
strategic management journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 11.035
H-Index - 286
eISSN - 1097-0266
pISSN - 0143-2095
DOI - 10.1002/smj.859
Subject(s) - moderation , capital (architecture) , business , construct (python library) , on board , power (physics) , social capital , industrial organization , sample (material) , political science , engineering , psychology , computer science , social psychology , chemistry , physics , archaeology , chromatography , quantum mechanics , law , history , programming language , aerospace engineering
We develop the construct of board capital, composed of the breadth and depth of directors' human and social capital, and explore how board capital affects strategic change. Building upon resource dependence theory, we submit that board capital breadth leads to more strategic change, while board capital depth leads to less. We also recognize CEO power as a moderator of these relationships. Our hypotheses are tested using a random sample of firms on the S&P 500. We find support for the effect of board capital on strategic change, and partial support for the moderating effect of CEO power. Copyright © 2010 John Wiley & Sons, Ltd.