Do the Board of Directors Composition and the Board Interlocking Influence on Performance? Outros Idiomas

This study analyzes the influence of composition of the Board of Directors and their social relations (board interlocking) on performance of Brazilian companies. A descriptive study based on documentary research was conducted with a total of 1,163 companies’ observations and 18,119 standardized observations regarding directors. Simultaneous equations were applied to the data analysis. The survey results showed that, regarding the influence of composition of the Board of Directors on the performance of the companies, among variables used to identify its characteristics, that some showed endogeneity. Among the characteristics of the Board of Directors, the duality of the board was exogenous when comparing market performance (Tobin’s Q) and the outsiders were also exogenous for internal performance (Return on Equity). Thus, the duality of the board is more influenced by the specificities of each company than by the market value of the companies. The characteristic outsiders are more influenced by the institutional environment than by the ROE. The practice of board interlocking proved to be insignificant in relation to the market value, indicating natural selection. Therefore, it is not possible to infer that the board interlocking can increase the dependency of the management, compromising the role of monitoring. Also, it is not possible to state that better positioned and central companies in the corporate relationships network show better performance.
Citação ABNT:
VESCO, D. G. D.; BEUREN, I. M. Do the Board of Directors Composition and the Board Interlocking Influence on Performance? . Brazilian Administration Review, v. 13, n. 2, p. 1-26, 2016.
Citação APA:
Vesco, D. G. D., & Beuren, I. M. (2016). Do the Board of Directors Composition and the Board Interlocking Influence on Performance? . Brazilian Administration Review, 13(2), 1-26.
Link Permanente:
Tipo de documento:
Alchian, A. A. (1950). Uncertainty, evolution, and economic theory. Journal of Political Economy, 58(3), 211-221. doi: 10.1086/256940.

Allen, M. P. (1974). The structure of interorganizational elite cooptation: interlocking corporate directorates. American Sociological Review, 39(3), 393-406. doi: 10.2307/2094297.

Andrade, L. P.; Salazar, G. T.; Calegário, C. L. L.; Silva, S. S. (2009). Governança corporativa: uma análise da relação do conselho de administração com o valor de mercado e desempenho das empresas brasileiras. Revista de Administração Mackenzie, 10(4), 4-31. doi: 10.1590/S167869712009000400002.

Arosa, B.; Iturralde, T.; Maseda, A. (2010). Outsiders on the board of directors and firm performance: evidence from Spanish non-listed family firms. Journal of Family Business Strategy, 1(4), 236-245. doi: 10.1016/j.jfbs.2010.10.004.

Barnhart, S. W.; Rosenstein, S. (1998). Board composition, managerial ownership, and firm performance: an empirical analysis. Financial Review, 33(4), 1-16. doi: 10.1111/j.15406288.1998.tb01393.x.

Barro, J. R.; Barro, R. J. (1990). Pay, performance, and turnover of bank CEOs. Working Paper Nº 3262. National Bureau of Economic Research, Cambridge, MA, USA. doi: 10.3386/w3262.

Baysinger, B. D.; Butler, H. N. (1985). Corporate governance and the board of directors: performance effects of changes in board composition. Journal of Law, Economics, & Organizations, 1(1), 101124.

Bezemer, P.-J.; Maassen, G. F.; Van Den Bosch, F. A. J.; Volberda, H. W. (2007). Investigating the development of the internal and external service tasks of non-executive directors: the case of the Netherlands (1997-2005). Corporate Governance: An International Review, 15(6), 1119-1129. doi: 10.1111/j.1467-8683.2007.00635.x.

Bhagat, S.; Black, B. (1999). The uncertain relationship between board composition and firm performance. The Business Lawyer, 54(3), 921-963.

Black, B. S.; Jang, H.; Kim, W. (2006). Does corporate governance predict firms’ market values?Evidence from Korea. Journal of Law, Economics, and Organization, 22(2), 366-413. doi: 10.1093/jleo/ewj018.

Bohman, L. (2012). Bringing the owners back in: an analysis of a 3-mode interlock network. Social Networks, 34(2), 275-287. doi: 10.1016/j.socnet.2012.01.005.

Burt, R. S. (1983). Firms, directors and time in the directorate tie market. Social Networks, 5(1), 13-49. doi: 10.1016/0378-8733(83)90014-X.

Caswell, J. A. (1984). An institutional perspective on corporate control and the network of interlocking directorates. Journal of Economic, 18(2), 619-626. doi: 10.1080/00213624.1984.11504262.

Chaganti, R. S.; Mahajan, V.; Sharma, S. (1985). Corporate board size, composition and corporate failures in retailing industry. Journal of Management Studies, 22(4), 400-416. doi: 10.1111/j.1467-6486.1985.tb00005.x.

Chahine, S.; Goergen, M. (2013). The effects of management-board ties on IPO performance. Journal of Corporate Finance, 21(3), 153-179. doi: 10.2139/ssrn.2200362.

Cheng, S. (2008). Board size and the variability of corporate performance. Journal of Financial Economics, 87(1), 157-176. doi: 10.1016/j.jfineco.2006.10.006.

Cho, M.-H. (1998). Ownership structure, investment, and the corporate value: an empirical analysis. Journal of Financial Economics, 47(1), 103-121.

Conyon, M. J.; Muldoon, M. R. (2006). The small world of corporate boards. Journal of Business Finance & Accounting, 33(9‐10), 1321-1343. doi: 10.1111/j.1468-5957.2006.00634.x.

Davis, G. F. (1996). The significance of board interlocks for corporate governance. Corporate Governance: An International Review, 4(3), 154-159. doi: 10.1111/j.1467-8683.1996.tb00144.x.

Demsetz, H.; Lehn, K. (1985). The structure of corporate ownership: causes and consequences. Journal of Political Economy, 93(6), 1155-1177. doi: 10.1086/261354.

Donaldson, L.; Davis, J. H. (1991). Agency theory or stewardship theory: CEO governance and shareholder returns. Australian Journal of Management, 16(1), 49-64.

Dooley, P. C. (1969). The interlocking directorate. The American Economic Review, 59(3), 314-323.

Dwivedi, N.; Jain, A. K. (2005). Corporate governance and performance of Indian firms: the effect of board size and ownership. Employee Responsibilities and Rights Journal, 17(3), 161-172. doi: 10.1007/s10672-005-6939-5.

Fama, E. F. (1980). Agency problems and the theory of the firm. Journal of Political Economy, 88(2), 288-307. doi: 10.1086/260866.

Fama, E. F.; Jensen, M. C. (1983). Agency problems and residual claims. Journal of Law and Economics, 26(2), 327-349. doi: 10.2139/ssrn.94032.

Fama, E. F.; Jensen, M. C. (1983). Separation of ownership and control. Journal of Law and Economics, 26(2), 301-325. doi: 10.1086/467037.

Fávero, L. P.; Belfiore, P. P.; Chan, B. L.; Silva, F. L. (2009). Análise de dados: modelagem multivariada para tomada de decisões. Rio de Janeiro: Elsevier, Campus.

Fich, E. M.; Shivdasani, A. (2006). Are busy boards effective monitors? The Journal of Finance, 61(2), 689-724. doi: 10.1111/j.1540-6261.2006.00852.x.

Fich, E. M.; White, L. J. (2005). Why do CEOs reciprocally sit on each other’s boards?. Journal of Corporate Finance, 11(1/2), 175-195. doi: 10.1016/j.jcorpfin.2003.06.002.

Fracassi, C.; Tate, G. (2012). External networking and internal firm governance. The Journal of Finance, 67(1), 153-194. doi: 10.1111/j.1540-6261.2011.01706.x.

Friedman, M. (1953). Part I - The methodology of positive economics. In M. Friedman, Essays in positive economics (pp. 145-178). Chicago: University of Chicago Press.

Ghosh, C.; Sirmans, C. F. (2003). Board independence, ownership structure and performance: evidence from real estate investment trusts. The Journal of Real Estate Finance and Economics, 26(2/3), 287-318. doi: 10.1023/A:1022932326610.

Gondrige, E. O.; Clemente, A.; Espejo, M. M. S. B. (2012). Composition of the board and firm value of Brazilian public companies. Brazilian Business Review, 9(3), 72-95. Retrieved from doi: 10.15728/bbr.2012.9.3.4.

Granovetter, M. (1994). Les institutions économiques comme construction sociales: un cadre d’analyse. In A. Orléans (Org.), Analyse économique des conventions (pp. 79-94). Paris: PUF.

Groβ, K. (2007). Equity ownership and performance: an empirical study of German traded companies. Heidelberg: Physica-Verlag Heidelberg. doi: 10.1007/978-3-7908-1934-2.

Hermalin, B. E.; Weisbach, M. S. (1988). The determinants of board composition. The Rand Journal of Economics, 19(4), 589-606.

Hermalin, B. E.; Weisbach, M. S. (2003). Boards of directors as an endogenously determined institution: a survey of the economic literature. Economic Policy Review, 9(1), 7-26. doi: 10.2469/dig.v34.n1.1410.

Hill, R. C.; Judge, G. G.; Griffiths, W. E. (2010). Econometria; heterocedasticidade; probabilidade - conceitos básicos; regressão linear simples. São Paulo: Saraiva.

Instituto Brasileiro de Governança Corporativa. (2015). Código das melhores práticas de governança corporativa. 5a ed. São Paulo: IBGC. Retrieved from

Jensen, M. C. (1993). The modern industrial revolution, exit, and the failure of internal control systems. The Journal of Finance, 48(3), 831-880. doi: 10.1111/j.1540-6261.1993.tb04022.x.

Jensen, M. C.; Meckling, W. H. (1976). Theory of the firm: managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305-360. doi: 10.1016/0304405X(76)90026-X.

Kandel, E.; Massa, M.; Simonov, A. (2011). Do small shareholders count? Journal of Financial Economics, 101(3), 641-665. doi: 10.1016/j.jfineco.2011.03.018.

Kim, Y. (2005). Board network characteristics and firm performance in Korea. Corporate Governance: An International Review, 13(6), 800-808. doi: 10.1111/j.1467-8683.2005.00471.x.

Klein, H. K.; Myers, M. D. (1999). A set of principles for conducting and evaluating interpretive field studies in information systems. MIS Quarterly, 23(1), 67-93. doi: 10.2307/249410.

Kosnik, R. D. (1987). Greenmail: a study of board performance in corporate governance. Administrative Science Quarterly, 32(2), 163-185. doi: 10.2307/2393124.

Labianca, G.; Brass, D. J. (2006). Exploring the social ledger: negative relationships and negative asymmetry in social networks in organizations. Academy of Management Review, 31(3), 596-614. doi: 10.5465/AMR.2006.21318920.

Lefort, F.; Urzúa, F. (2008). Board independence, firm performance and ownership concentration: evidence from Chile. Journal of Business Research, 61(1), 615-622. doi: 10.1016/j.jbusres.2007.06.036.

Lipton, M.; Lorsch, J. W. (1992). A modest proposal for improved corporate governance. The Business Lawyer, 48(1), 59-77.

Lopes, A. B.; Tukamoto, Y. S. (2007). Contribuição ao estudo do gerenciamento de resultados: uma comparação entre as companhias abertas brasileiras emissoras de ADRs e não-emissoras de ADRs. Revista de Administração, 42(1), 86-96. Retrieved from doi: 10.1590/S0080-21072007000100008.

Martins, O. S.; Mazer, L. P.; Lustosa, P. R. B.; Paulo, E. (2012). Características e competências dos conselhos de administração de bancos brasileiros e sua relação com seu desempenho financeiro. Revista Universo Contábil, 8(3), 24-39. Retrieved from doi: 10.4270/RUC.2012321.

Meckling, W. H. (1976). Values and the choice of the model of the individual in the social sciences. Swiss Journal of Economics and Statistics, 112(4), 545-560.

Mendes-da-Silva, W. (2011). Small worlds and board interlocking in Brasil: a longitudinal study of corporate networks, 1997-2007. Brazilian Review of Finance, 9(4), 521-548. Retrieved from

Mendes-da-Silva, W.; Moraes, W. F. A. (2006). Punidos por baixo desempenho: impactos da governança corporativa sobre o turnover de executivos no Brasil. Organizações & Sociedade, 13(36), 125-143. doi: 10.1590/S1984-92302006000100007.

Mendes-da-Silva, W.; Rossoni, L.; Martin, D. M. L.; Martelanc, R. (2008). A influência das redes de relações corporativas no desempenho das empresas do novo mercado da Bovespa. Revista Brasileira de Finanças, 6(3), 337-358. Retrieved from

Mizruchi, M. S. (1996). What do interlocks do?An analysis, critique, and assessment of research on interlocking directorates. Annual Review of Sociology, 22(1), 271-298. doi: 10.1146/annurev.soc.22.1.271.

Mizruchi, M. S. (2004). Berle and Means revisited: the governance and power of large U.S. corporations. Theory and Society, 33(5), 579-617. doi: 10.1023/B:RYSO.0000045757.93910.ed.

ND. Lei n. 6.404, de 15 de dezembro de 1976. (1976). Dispõe sobre as sociedades por ações. Diário Oficial da União. Brasília, DF: Presidência da República.

Non, M.; Franses, P. H. (2007). Interlocking boards and firm performance: evidence from a new panel database [Tinbergen Institute Discussion Paper TI 2007-034/2]. Tinbergen Institute, Erasmus Universiteit, Universiteit van Amsterdam, Vrije Universiteit Amsterdam, The Netherlands. Retrieved from

Ong, C. H. (1999). Boards of directors and corporate performance: agency or stewardship theory. [Work-in-progress report]. National University of Singapore, Singapore.

Ong, C. H.; Wan, T. W. D. (2001). Board structure, board process and board performance: a review & research agenda. Journal of Comparative International Management, 4(1), 1-25.

Pfeffer, J.; Salancik, G. R. (1978). The external control of organizations: a resource dependence approach. New York: Harper and Row Publishers.

Pombo, C.; Guitiérrez, L. H. (2011). Outside directors, board interlocks and firm performance: empirical evidence from Colombian business groups. Journal of Economics and Business, 63(4), 251-277. doi: 10.1016/j.jeconbus.2011.01.002.

Prevost, A. K.; Rao, R. P.; Hossain, M. (2002). Board composition in New Zealand: an agency perspective. Journal of Business Finance & Accounting, 29(5/6), 731-760. doi: 10.1111/14685957.00448.

Ramos, R. G.; Olalla, M. G. (2011). Board characteristics and firm performance in public founder - and nonfounder - led family businesses. Journal of Family Business Strategy, 2(4), 220-231. doi: 10.1016/j.jfbs.2011.09.001.

Rechner, P. L.; Dalton, D. R. (1991). CEO duality and organizational performance: a longitudinal analysis. Strategic Management Journal, 12(2), 155-160. doi: 10.1002/smj.4250120206.

Rhoades, D. L.; Rechner, P. L.; Sundaramurthy, C. (2000). Board composition and financial performance: a meta-analysis of the influence of outside directors. Journal of Managerial Issues, 12(1), 76-91.

Rosenstein, S.; Wyatt, J. G. (1990). Outside directors, board independence, and shareholder wealth. Journal of Financial Economics, 26(2), 175-192. doi: 10.1016/0304-405X(90)90002-H.

Rossoni, L. (2009). Governança corporativa, legitimidade e desempenho das organizações listadas na Bovespa (Tese de doutorado). Universidade Federal do Paraná, Curitiba, PR, Brasil.

Santos, R. L.; Silveira, A. M. (2007). Board interlocking no Brasil: a participação de conselheiros em múltiplas companhias e seu efeito sobre o valor das empresas. Revista Brasileira de Finanças, 5(2), 125-163. Retrieved from

Santos, R. L.; Silveira, A. M.; Barros, L. A. (2012). Board interlocking in Brazil: directors’ participation in multiple companies and its effect on firm value and profitability. Latin American Business Review, 13(1), 1-28. doi: 10.1080/10978526.2012.673419.

Setia-Atmaja, L.; Haman, J.; Tanewski, G. (2011). The role of board independence in mitigating agency problem II in Australian family firms. The British Accounting Review, 43(3), 230-246. doi: 10.1016/

Shivdasani, A.; Yermack, D. (1999). CEO involvement in the selection of new Board members: an empirical analysis. The Journal of Finance, 54(5), 1829-1853. doi: 10.1111/0022-1082.00168.

Silveira, A Di M da; Barros, L. A. B. C.; Famá, R. (2003). Estrutura de governança e valor das companhias abertas brasileiras. Revista de Administração de Empresas, 43(3), 50-64. doi: 10.1590/S0034-75902003000300005.

Smith, A. (1776). The wealth of nations. New York: Modern Library.

Turki, A.; Sedrine, N. B. (2012). Ownership structure, board characteristics and corporate performance in Tunisia. International Journal of Business and Management, 7(4), 121-132. doi: 10.5539/ijbm.v7n4p121.

Useem, M. (2014). The inner circle: large corporations and the rise of business political activity in the US and UK. Oxford: Oxford University Press.

Warokka, A. (2008). Ownership structures, capital structure, and firm performance: an analysis of post East Asian financial crisis (Doctoral dissertation). Universidad Autónoma de Madrid, Madrid, Espana.

Yermack, D. (1996). Higher market valuation of companies with a small board of directors. Journal of Financial Economics, 40(2), 185-211. doi: 10.1016/0304-405X(95)00844-5.

Zahra, S. A.; Pearce, J. A. (1989). Boards of directors and corporate financial performance: a review and integrative model. Journal of Management, 15(2), 291-334. doi: 10.1177/014920638901500208.

Agrawal, A.; Knoeber, C. R. (1996). Firm performance and mechanisms to control agency problems between managers and shareholders. Journal of Financial and Quantitative Analysis, 31(3), 377397. doi: 10.2307/2331397.

Arosa, B.; Iturralde, T.; Maseda, A. (2010). Ownership structure and firm performance in non-listed firms: evidence from Spain. Journal of Family Business Strategy, 1(2), 88-96. doi: 10.1016/j.jfbs.2010.03.001.