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

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 con...

Descripción completa

Detalles Bibliográficos
Autores Principales: Pombo, C., Gutiérrez, L.H.
Formato: Artículo (Article)
Lenguaje:Inglés (English)
Publicado: 2020
Materias:
Acceso en línea:http://hdl.handle.net/1992/46843
id ir-1992-46843
recordtype dspace
spelling ir-1992-468432020-11-04T20:23:17Z Outside directors, board interlocks and firm performance: Empirical evidence from Colombian business Groups Pombo, C. Gutiérrez, L.H. Outside directors Board interlocks Busy directors Corporate governance Firm performance Control contestability Colombian corporations 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. 2020-10-01T16:46:01Z 2020-10-01T16:46:01Z 2011 article publishedVersion http://hdl.handle.net/1992/46843 10.1016/j.jeconbus.2011.01.002 http://www.sciencedirect.com/science/article/pii/S0148619511000117 eng openAccess application/pdf instname:Universidad de los Andes reponame:Repositorio Institucional Séneca
institution Universidad de los Andes
collection DSpace
language Inglés (English)
topic Outside directors
Board interlocks
Busy directors
Corporate governance
Firm performance
Control contestability
Colombian corporations
spellingShingle Outside directors
Board interlocks
Busy directors
Corporate governance
Firm performance
Control contestability
Colombian corporations
Pombo, C.
Gutiérrez, L.H.
Outside directors, board interlocks and firm performance: Empirical evidence from Colombian business Groups
description 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.
format Artículo (Article)
author Pombo, C.
Gutiérrez, L.H.
author_facet Pombo, C.
Gutiérrez, L.H.
author_sort Pombo, C.
title Outside directors, board interlocks and firm performance: Empirical evidence from Colombian business Groups
title_short Outside directors, board interlocks and firm performance: Empirical evidence from Colombian business Groups
title_full Outside directors, board interlocks and firm performance: Empirical evidence from Colombian business Groups
title_fullStr Outside directors, board interlocks and firm performance: Empirical evidence from Colombian business Groups
title_full_unstemmed Outside directors, board interlocks and firm performance: Empirical evidence from Colombian business Groups
title_sort outside directors, board interlocks and firm performance: empirical evidence from colombian business groups
publishDate 2020
url http://hdl.handle.net/1992/46843
_version_ 1705934333579100160
score 11,828437