Do Boards with Different Compositions Face Different Organizational Information Contexts?

Anne-Mie Reheul and Ann Jorissen

Review of Business and Economic Literature, 2010, vol. LV, issue 1, 55-75

Abstract: Responding to recent calls in the literature to examine the organizational context of boards of directors, this study investigates whether different board compositions are associated with different organizational information contexts. The results of this study may shed light on the findings of the extant empirical governance literature, revealing that boards with outsiders are more effective in monitoring, despite outside directors’ information asymmetry compared to inside directors. In this study the organizational information context is measured in terms of the availability of management control information in the firm. Our results provide evidence that outsider presence on the board is significantly associated with a more formal and objective information context characterized by a higher availability of formal planning, budgeting and variance analysis information within the firm. Given this available information, which allows comparisons between planned and actual company performance, outside directors’ information seeking behaviour is likely to be productive and to result in a reduction of outside directors’ information asymmetry.

Keywords: Corporate Governance; Board Composition; Organizational Context; Management Control Systems (search for similar items in EconPapers)
JEL-codes: G34 M41 (search for similar items in EconPapers)
Date: 2010
References: Add references at CitEc
Citations:

Downloads: (external link)
https://lirias.kuleuven.be/bitstream/123456789/409 ... +Reheul+Jorissen.doc

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ete:revbec:20100103

Access Statistics for this article

More articles in Review of Business and Economic Literature from KU Leuven, Faculty of Economics and Business (FEB), Review of Business and Economic Literature Contact information at EDIRC.
Bibliographic data for series maintained by library EBIB ().