Outside directors, board interlocks and firm performance: Empirical evidence from Colombian business groups

Carlos Pombo, Luis H. Gutiérrez

Producción científica: Contribución a una revistaArtículo de Investigaciónrevisión exhaustiva

91 Citas (Scopus)

Resumen

We investigate the relation of board structure through the appointments of outside directors and the role of busy directors on firm return on assets within an environment of no regulation for privately held firms and voluntary adoption of corporate best practices for security issuers with family controlling blockholders. This study relies on a sample of an average of 335 firms per year for the 1996-2006 period, where 244 are private firms and 285 are affiliated to one of the seven largest non-financial business groups in the country. Five of these groups were, in 2006, still family-controlled. We find a positive relation between both the ratio of outside directors, and the degree of board interlocks, with firm return-on-assets. Outside busy directors turned out to be key drivers of improved firm performance. Appointments of outsiders are endogenous to firm ownership structure. Blockholder activism as well as contestability becomes an internal mechanism that improves director monitoring and ex-post firm valuation.

Idioma originalInglés estadounidense
Páginas (desde-hasta)251-277
Número de páginas27
PublicaciónJournal of Economics and Business
Volumen63
N.º4
DOI
EstadoPublicada - jul. 2011

Áreas temáticas de ASJC Scopus

  • Administración de Empresas y Contabilidad General
  • Economía y econometría

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