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Effects of Executive Characteristics and Venture Capital Involvement on Board Composition and Share Ownership in IPO Firms *
Author(s) -
Filatotchev Igor
Publication year - 2006
Publication title -
british journal of management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.407
H-Index - 108
eISSN - 1467-8551
pISSN - 1045-3172
DOI - 10.1111/j.1467-8551.2005.00455.x
Subject(s) - initial public offering , business , venture capital , executive compensation , independence (probability theory) , incentive , accounting , agency (philosophy) , equity (law) , corporate governance , principal–agent problem , marketing , finance , economics , market economy , epistemology , political science , law , philosophy , statistics , mathematics
Combining the agency perspective, resource‐based view and upper echelon research, this paper examines factors affecting board selection and share ownership in initial public offerings (IPOs). In line with socio‐cognitive and behavioural research, it shows that board independence, cognitive capacity and the incentives of non‐executive directors are negatively associated with the experience and power of executive directors, and that large‐block share ownership is positively associated with the intensity and diversity of non‐executives' experience. However, the retained equity by venture capitalists negatively affects board independence and non‐executive directors' interests. The paper suggests a number of avenues for a future contextual analysis of the board development process in ‘threshold’ firms.