Balancing control and delegation: the moderating influence of managerial discretion on performance effects of board monitoring and CEO human capital

Yuliya Ponomareva ()
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Yuliya Ponomareva: Ramon Llull University

Journal of Management & Governance, 2019, vol. 23, issue 1, No 9, 195-225

Abstract: Abstract Building on research within corporate governance and strategic management, this paper explores how managerial discretion stemming from managerial task environment influences the balance between controlling and enabling managerial decision-making. Two sets of alternative hypotheses about the moderating effects of managerial discretion on the performance effects of board monitoring and CEO human capital were formulated. The results indicate partial support for governance-driven explanation showing that the association between board monitoring and market-based performance is strongest in environments characterized by high levels of managerial discretion. The findings also show that CEO human capital is positively associated with market-based performance in low-discretion environments, while in high-discretion environments this relationship turns negative. The central contribution of this paper is to demonstrate that managerial discretion is a useful tool to explain the balance between controlling and enabling managerial decision making.

Keywords: Corporate governance; Board of directors; Managerial discretion; CEO (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (2)

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DOI: 10.1007/s10997-018-9423-y

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