Does the Team Leverage the Board’s Decisions?

Depósi o de In es igación de la Uni e sidad de Se illa h ps://idus.us.es/ This is he pee e iewed e sion o he ollowing a icle: Cas o, C. B., De La Concha, M. D., G a el, J. V., & Pe iñan, M. M. V. (2009). Does he eam le e age he boa d's decisions?. Co po a e Go e nance: An In e na ional Re iew, 17(6), 744-761, which has been published in inal o m a h ps://doi.o g/10.1111/j.1467-8683.2009.00772.x. This a icle may be used o non-comme cial pu poses in acco dance wi h Wiley Te ms and Condi ions o Use o Sel -A chi ed Ve sions. This a icle may no be enhanced, en iched o o he wise ans o med in o a de i a i e wo k, wi hou exp ess pe mission om Wiley o by s a u o y igh s unde applicable legisla ion. Copy igh no ices mus no be emo ed, obscu ed o modi ied. The a icle mus be linked o Wiley’s e sion o eco d on Wiley Online Lib a y and any embedding, aming o o he wise making a ailable he a icle o pages he eo by hi d pa ies om pla o ms, se ices and websi es o he han Wiley Online Lib a y mus be p ohibi ed." 1 DOES THE TEAM LEVERAGE THE BOARD’S DECISIONS? CARMEN BARROSO CASTRO* MARTA DOMINGUEZ DE LA CONCHA JULIO VECINO GRAVEL Mª MAR VILLEGAS PERIÑAN Depa men o Business Managemen and Ma ke ing, Uni e si y o Se ille, Se ille, Spain Ca men Ba oso is Senio P o esso o Business a he Uni e si y o Se ille, Spain. She is he au ho o a icles and pape s o se e al academic na ional and in e na ional jou nals and p oceedings. A p esen , he main esea ch opics a e ela ed o esou ce-based heo y and boa d beha iou , including boa d dynamics. She has published a conside able numbe o a icles abou boa ds, s a egic and en ep eneu ial managemen pe spec i e. Depa men o Business Managemen and Ma ke ing, A . Ramón y Cajal 1, 41018 Se ille (Spain), Phone:+ 34 954557521, Fax:+ 34 954556989 (email: [email p o ec ed]). Ma a Dominguez de la Concha is Associa e P o esso a he Uni e si y o Se ille. A p esen , he main esea ch opics a e ela ed o s a egic change. (email: [email p o ec ed]) Julio Vecino G a el is Associa e P o esso a he Uni e si y o Se ille. A p esen , his cu en esea ch in e es s include s a egic change and boa d. (email: [email p o ec ed]) Mº Ma Villegas Pe iñan is Associa e P o esso a he Uni e si y o Se ille. He main esea ch opics a e ela ed o s a egic change, boa d capabili y and boa d dynamics. (email: [email p o ec ed]) * Co esponding au ho . Email: ba [email p o ec ed] 2 Manusc ip Type: Empi ical Resea ch Ques ion /Issue: This s udy analyses he in luence o he co po a e go e nance ( he boa d o di ec o s and TMT) on he i m’s s a egic change, using he p emise ha his impo an e en o he o ganiza ion occu s as a esul o an app op ia e ela ionship/ i ing be ween bo h go e nance mechanisms. Resea ch Findings/Insigh s: Using a chi al da a om a sample o 119 i ms in he pe iod 1993- 2000, we ound ha when a syne gy exis s be ween he boa d and he TMT, he e will be a g ea e inclina ion o s a egic change. The esul s indica e ha a boa d’s inclina ion o con ibu e o s a egic change inc eases as he boa d size inc eases. Equally, i is possible o accep ha he ela ionship be ween boa d enu e and hei inclina ion owa ds s a egic change is no linea . Finally, he simul aneous analysis o boa d composi ion and he a io o di ec o s on he TMT, demons a es ha he in e ac ion o bo h a iables has e ec s on he i m’s s a egic change. Theo e ical/Academic Implica ions: This s udy p o ides empi ical suppo in a ou o an ac i e ole o he boa d shaping he i m’s s a egic decisions. We ha e de eloped and es ed a se o a gumen s ega ding wi h he ole o he boa d on he i m’s change in s a egy. We ha e in es iga ed as well, he le e aging e ec o one o he a iables ha de ine he composi ion o he managemen eam on he ela ionship boa d-change in s a egy. P ac i ione /Policy Implica ions: In o de o c ea e an e ec i e boa d, a b oade go e nance s uc u e mus be examined wi h a de ailed s udy o aspec s o he composi ion o he boa d and he TMT (p e ious esea ch has only conside ed cha ac e is ics linked o he CEO). The dynamics o he ela ionships be ween bo h go e nance mechanisms a e essen ial and le e age he boa d capabili y. Keywo ds: Co po a e Go e nance, TMT-Boa d ela ionship, S a egic Change, Boa d In ol emen . 3 DOES THE TEAM LEVERAGE THE BOARD’S DECISIONS? INTRODUCTION The cu en li e a u e on co po a e go e nance highligh s he impo ance o boa d e ec i eness o he success o a company (Pe o ic, 2008). Howe e , he e olu ion o esea ch on boa ds appea s o ollow a dialec ical sequence om a hesis (manage s domina e di ec o s) o an an i hesis (di ec o s should con ol manage s). Ea ly esea ch on boa d oles emb aced a manage ial dominance pe spec i e and p oposed ha boa ds a e ine ec i e go e ning s uc u es because incumben manage s con ol hem (Mace 1986; Vance, 1983; Lo sch and Macl e , 1989). In con as , he p ima y esea ch o agency heo y a gued ha boa ds a e an e icien mechanism o moni o ing a i m's manage s (Baysinge and Bu le , 1985). The e o e, a hi d s age o syn hesis (di ec o s and manage s wo k oge he owa d o ganiza ional success) can be expec ed o wo k (Rindo a, 1999). Bo h g oups –TMT and boa ds– ha e a di ec esponsibili y o he decision- making p ocess, which has p omp ed a signi ican body o esea ch (Ocasio, 1994; Pea ce and Zah a, 1992; Zah a and Pea ce, 1989). This s age o syn hesis de end an ac i e boa d o di ec o s (Demb and Neubaue , 1992; Wes phal, 1999) and elies on s ewa dship (Donaldson, 1990), agency (Eisenha d , 1989) and esou ce dependence (P e e , 1973) heo ies. This line o a gumen unde s ands ha he boa d is a aluable esou ce (Macus, 2008; McIn y e, Mu phy and Mi chell, 2007), which should be exploi ed when he i m needs o ake impo an decisions –such as a change in s a egy– (Ginsbe g, 1994; Rindo a, 1999). The boa d o di ec o s is he e o e pa o a collec i e, oge he wi h he op managemen , which should wo k oge he , o he sake o imp o ing he o ganiza ion’s pe o mance (Ande son, Melanson and Maly, 2007). Ou in es iga ion, in he ac i e school, s udies i does he eam le e age he boa d’s decision o e s a egic change. We a gue ha he boa d and managemen o mula e s a egy in a pa ne ship app oach (Hend y and Kiel, 2004). As And ews (1980) al eady poin ed ou , i is ad isable ha di ec o s wo k wi h manage s on de ising s a egic plans o wo easons: (1) di ec o s can con ibu e o c ea i e s a egizing because hey can o e a a ie y o expe iences and; (2) di ec o s can be e pe o m hei unc ions i hey unde s and in dep h a i m's s a egy. Despi e he cu en de elopmen o he ac i e school, esea ch ca ied ou on joined in luence o TMT and boa ds, ega ding decisions aken, a e sca ce (T icke , 1996). In his sense, p e ious esea ch ocuses wi h ew excep ions, in he analysis o one ype o go e nance mechanism, while excluding o he s (Daily and Dal on, 1993; Fo bes and Miliken, 1999; Johnson, 4 Daily and Ells and, 1996). As B unninge, No dq is and Wiklund (2007) poin ou , go e nance esea ch would bene i om s udies ha in es iga e how boa d and managemen a e in e ela ed in c ea ing key o ganizacional ou comes. On he o he hand, and in keeping wi h his ac i e school o hough , he mos ecen s udies abou boa ds ha e adop ed a mul i heo y pe spec i e, as hey ha e become awa e ha he ac i e ole o his go e nmen mechanism en ails mul iple ask and ha his implies, in u n, an explici ecogni ion o he boa d’s p ocesses ha ake place wi hin boa d ha in luence on his ou comes. (Fo bes and Milliken, 1999; Golden and Zajac, 2001; Macus, 2008). Gi en he complexi y o his concep , a good s a ing poin would be examining he ela ionship wi hin he boa ds as he building blocks o any boa d p ocess. We belie e ha he co ec app oach o any esea ch on boa ds mus ocus on i s ela ionships. These ela ionships can a ise, among o he s, be ween di ec o s and op manage s. The e ec i eness o he boa d may also be d i en by he na u e o in e -g oup dynamics be ween he boa d and he op managemen eam. A heal hy dialogue be ween he eam and he boa d can con ibu e o he quali y o he s a egic decisions, whe eas con lic s and powe s uggles can c ea e nega i e dynamics and an inapp op ia e decision-making en i onmen . We a gue ha o his ela ional dynamics o be p esen , i is necessa y ha he composi ion o bo h bodies o go e nmen be ela ed. Fo his eason, ou wo k is cen ed in s udying he composi ion o he boa ds as well as i s in luence on he composi ion o TMT, conc e ely he weigh o he boa d di ec o on o he TMT. Ra he han dynamics wi hin he boa d, his pape in es iga es how he in e ac ions be ween he managemen eam and he boa d may in luence he go e nance ole wi h espec o s a egic change. This is whe e we make ou con ibu ion. Thus, ollowing Ko (2006), his pape examines whe he bo h op managemen eam and boa d ha e di ec addi i e e ec s on i ms’ s a egic change. This examina ion is supe io o examining managemen and boa d e ec s as sepa a e sys ems o cons uc s because i allows us o unde s and whe he managemen eams and boa d go e nance play unique oles in shaping a i m’s s a egy change. In addi ion, his pape heo izes abou and es s complex in e ac ion e ec s o he dynamics be ween he managemen eam and he boa d. These in e ac ion e ec s demons a e when con lic s be ween managemen eams and boa ds wi h speci ic composi ions may unde mine he e ec i eness o boa d. The esul s o his in es iga ion show ha he p esence o boa d membe s on he managemen eam a ec s he de elopmen o hese ela ionships, in such a way ha he boa d’s composi ion has a le e aging e ec on s a egic change. In he subsequen sec ions o his a icle we conduc a li e a u e e iew, and p opose a se ies o hypo heses ela ing o he di ec e ec s o and he in e ac ion be ween di e en a iables ha 5 de ine a i m’s co po a e go e nance (boa ds o di ec o s and TMT) on i s s a egic changes. A e p esen ing and discussing ou empi ical esul s, we conclude by ou lining he implica ions o heo y and manage ial p ac ice o ou indings. THEORY AND HYPOTHESES In his sec ion, we de elop he a gumen ha he boa d composi ion may a ec he boa d’s inclina ion owa ds he i m’s s a egic change. Fu he mo e, we sugges ha an app op ia e combina ion o boa d and managemen eam composi ion can le e age his inclina ion. Boa d in ol emen in he i m’s s a egy The li e a u e adi ionally desc ibes wo b oad schools o hough ega ding he boa d’s in ol emen in s a egy, e e ed o as ac i e and passi e (Golden and Zajac, 2001; Hend y and Kiel, 2004). Acco ding o he passi e school, boa ds a e a legal ic ion, domina ed by managemen (P e e , 1972) and he CEO in pa icula (Mace, 1972). This school o hough is suppo ed by he heo e ical pe spec i e o manage ial hegemony. On one hand, he p esence o inside di ec o s (i.e., execu i e di ec o s) who epo o he CEO con e s powe and con ol on o he chie execu i e (Baliga, Moye and Rao, 1996; Boeke and Goods ein, 1993; Hill and Snell, 1988; Kesne , Vic o and Lamon , 1986; Malle e and Fowle , 1992; Wade, O’Reilly and Chand a a , 1990); on he o he hand, ou side di ec o s a e o en appoin ed by he managemen and he e o e managemen again con ols he boa d (P e e , 1972). F om his pe spec i e, s a egy is he esponsibili y o he TMT and he boa d’s only ole is o e iew and app o e ( ubbe -s amps unc ion) (He man, 1981; Rosens ein, 1987). In con as o he passi e school, he ac i e school sees he boa d’s di ec o s as independen hinke s who shape he s a egic di ec ion o hei o ganiza ion (Walsh and Sewa d, 1990; Da is and Thompson, 1994; Finkels ein and Hamb ick, 1996). F om his pe spec i e, s a egy is he esponsibili y o bo h he TMT and he boa d o di ec o s. Some s udies a gue ha he boa d should pa icipa e as an equal pa ne wi h managemen , while o he s sugges ha he boa d should only p o ide o e sigh in his a ea (Hend y and Kiel, 2004). This e olu ion o he boa d o s a egic managemen pa ne p esen s an oppo uni y o p oduce a supe io go e nance egime. The boa d as s a egic pa ne can b ing di e ing pe spec i es o he planning o s a egy, isk managemen and execu ion, po en ially leading o be e decision ou comes and imp o ed company pe o mance (Ande son e al., 2007). Johnson e al. (1996), in hei ex ensi e li e a u e e iew, indica e he p og essi e g ow h o he in ol emen o he boa d on ques ions o s a egy (Judge and Zei haml, 1992; Fo bes and Milliken, 1999). Ande son e al. (2007), in a su ey o co po a e di ec o s in ou coun ies, indica e a undamen al shi in he posi ion o he boa d owa ds becoming a s a egic 6 pa ne wi h managemen . Robe s, McNul y and S iles (2005) p opose a mo e inclusi e ole o he boa d, enhancing s a egy discussions, wi h non-execu i e di ec o s in ol ed in a wide ange o beha iou s ha combine elemen s o con ol and collabo a ion. In ou in es iga ion we ha e chosen o posi ion ou sel es wi hin he ac i e school, as we pe cei e he boa d o di ec o s as an asse , wi h he po en ial o gene a e s a egic bene i s o he i m, wo king oge he wi h he managemen . The ac i e school assumes ha he boa d and managemen o mula e s a egy h ough a pa ne ship app oach (Hend y and Kiel, 2004). The ac i e school elies on s ewa dship, agency and esou ce dependence heo ies. These pe spec i es a ise om he h ee main oles iden i ied by he li e a u e wi hin boa ds o di ec o s: con ol, se ice and esou ce dependence (Johnson e al., 1996). In gene al, each o hese oles has been independen ly analysed and is based on di e en heo e ical pe spec i es (Benne and Robson, 2004). Agency heo is s ha e emphasised he boa ds’ con ol ole as moni o ing he beha iou and pe o mance o manage s, ac ing as iducia ies o s ockholde s (Le za, Sun and Ki kb ide, 2004). S ewa dship heo y ela es o he boa d’s ask o p o iding suppo and ad ice o managemen (Da is, Schoo man and Donaldson, 1997). Resou ce dependence heo is s (Hend y and Kiel, 2004) a gue he boa d is a co-op a i e mechanism o ex ac i al esou ces o company pe o mance, h ough i s membe s’ ne wo ks wi h o he o ganiza ions and by linking he i m o i s o e all en i onmen (P e e , 1972; 1973; P e e and Salancik, 1978; Pea ce and Zah a, 1991; Ko ac-Kakabadse, Kakabadse and Kouzmin, 2001; Hillman, Cannella and Pae zold, 2000). The dominan heo e ical lens o examining co po a e go e nance has been agency heo y. Fama and Jensen (1983) indica e ha he boa d o di ec o s is he co e o co po a e go e nance and ha he s uc u e o boa d o di ec o s is in luen ial o he unc ions o he boa d. They a gue ha ou side di ec o s a e mo e e icien in moni o ing he managemen and will no collude wi h he managemen . The e o e, unde he sepa a ion o owne ship and con ol, ou side di ec o s acili a e he go e nance unc ions o he boa d. They a gue ha he boa d o di ec o s is he highes in e nal con ol mechanism esponsible o moni o ing he ac ions o op managemen . The con ol ole ha agency heo y g an s he boa d also ex ends o he ole o he boa d in he i m’s s a egy. Following a sequen ial p ocess, manage s gene a e s a egic al e na i es and di ec o s selec om hose al e na i es, manage s pu he chosen al e na i es in o p ac ice and di ec o s e alua e he ou comes. Rindo a (1999) demons a es he limi a ions o agency heo y in his espec . In eali y, s a egic decisions e ol e h ough complex, non-linea and agmen ed p ocesses (Cohen, Ma ch and Olsen, 1972; Hickson, Bu le , C ay, Mallo y and Willson, 1986; Min zbe g, Raisinghani and Theo e , 1976). Di ec o s can con ibu e o he s a egic wo k o he i m, beyond a con ol ole, using he 7 in o ma ion, expe ise and o he cogni i e esou ces ha hey posses o enhance he unde s anding, c ea i i y and cohe ence o he i m’s decisions (Rindo a, 1999; Ginsbe g, 1994). In con as o he oppo unis ic sel -in e es assump ion o agency heo y, he s ewa dship pe spec i e (Sunda amu hy and Lewis, 2003; Fo bes and Milliken, 1999) posi s ha manage s a e us wo hy indi iduals and good s ewa ds o he i m’s esou ces (Donaldson, 1990; Donaldson and Da is, 1991, 1994). This pe spec i e ecognises a ange o non- inancial mo i es o manage s’ beha iou (Da is e al., 1997). Manage s eel commi men o he o ganiza ion, ac ing in he bes in e es o he i m and i s sha eholde s. The implica ions o s ewa dship heo y o co po a e go e nance a e signi ican , i emphasises a di e en se ice and ad iso y ole o he boa d: he boa d ac s as pa o he collec i e wi h managemen , wo king oge he h ough co-ope a ion and enabling managemen o enhance o ganiza ional ou comes (Ande son e al., 2007). The collabo a i e model sugges s ha boa d’s ole should cen e on ad ising managemen and enhancing s a egy discussion (K oll, Wal e s and Lee, 2007; Wal e s, K oll and W igh , 2008). F om his pe spec i e, di ec o s and manage s migh also sha e social ies and in o mal wo king ela ionships, which make i mo e likely o di ec o s o p o ide candid eedback o manage s and imp o e pe o mance. Inside s on he boa d a e iewed as impo an con ibu o s as hey a e knowledgeable abou he i m’s ope a ions. A esul o close boa d-managemen ies migh be o p omo e he boa d’s in ol emen : allowing space o ad ice-seeking on he pa o he managemen and/o o educe de ensi e and poli ical beha iou wi hin he boa d (Wes phal, 1999). Finally, om he pe spec i e o esou ce dependence heo y, di ec o s may be ac i ely in ol ed in he i m’s s a egy h ough counsel and ad ice o he CEO (Zah a and Pea ce, 1989). The boa d’s bounda y-spanning ac i i y con ibu es o he s a egy ole by b inging in new s a egic in o ma ion and educing unce ain y (Hend y and Kiel, 2004). S a egic decisions mo e be ween en e p ises h ough in e locking di ec o a es (Da is, 1991; Johnson e al., 1996; Palme , Jennings and Zhou, 1993; Wes phal and F edickson, 2001). The s a egic con ex o ex e nal ne wo k ies may de e mine he boa d’s in ol emen and abili y o con ibu e o he i m’s s a egic decisions (Ca pen e and Wes phal, 2001). The mos ecen s udies ha e adop ed a mul i heo e ical pe spec i e, combining di e en heo ies in hei app oach o boa d esea ch (Macus, 2008). In his sense, Sunda amu hy and Lewis (2003) p opose he simul aneous need o con ol (agency pe spec i e) and collabo a ion (s ewa dship pe spec i e) in he wo king s yle and dynamics o boa ds. O ganiza ional ailu e may esul when one pe spec i e gains dominance o e he o he (Ande son e al., 2007). Robe s e al. 8 (2005) ake a simila app oach when hey s a e ha in o de o c ea e accoun abili y; non-execu i e di ec o s combine elemen s o con ol and collabo a ion. Alongside his mul i heo e ical iew, we would poin ou he need o conside ha in p ac ice, boa ds ul il se e al asks simul aneously (S ebel, 2004; Hillman and Dalziel, 2003) and ha his implies an explici ecogni ion o he boa d’s p ocesses (Fo bes and Milliken, 1999; Golden and Zajac, 2001). The boa d’s p ocess e e s o decision-making ac i i ies; he s yles o boa d; he equency and he leng h o boa d mee ings; he o mali y o boa d p oceedings and boa d cul u e on he e alua ion o he di ec o ’s pe o mance (Ko ac-Kakabadse e al., 2001). Gi en he complexi y o his concep , we belie e, as Macus (2005, 2008) sugges s, ha we could s a by examining he ela ionships wi hin he boa ds as he building blocks o any boa d p ocess. These ela ionships, as he mos basic elemen o boa d p ocesses, a e he in e pe sonal ac i i ies ha occu wi hin a g oup and which in luence he g oup’s esul s (Hopkins and Hopkins, 2002). Fo hese easons, and ollowing he mos ecen ecommenda ions in he ield, ou s udy is a gued om he mul i heo e ical pe spec i e. Likewise, we belie e ha he co ec app oach o any esea ch on boa ds mus ocus on i s ela ionships. These ela ionships can a ise among di ec o s, be ween di ec o s and op manage s and be ween di ec o s and indi iduals ex e nal o he i m. F om his mul i heo e ical pe spec i e, ou s udy aims o be a i s a emp a he analysis o he ela ionships ha a e equi ed be ween he boa d and he TMT. In o de o do his, we s a wi h he composi ion o bo h go e nance mechanisms (Lan , Milliken and Ba a, 1992; Wie sema and Ban el, 1992; 1993; Boeke , 1997; Go don, S ewa , Sweo and Luke , 2000; Ca pen e , 2002; Rindo a, 1999; Wes phal and F edickson, 2001) as p oxy a iables o he in ended objec i e. Following P e e (1983), we a gue ha demog aphic a iables p o ide pa simonious and objec i e ep esen a ions o he cons uc ha a e o he wise di icul o collec . The demog aphic a iables used in his s udy o de e mine he boa d’s composi ion a e size, he pe cen age o ou side s and boa d enu e (Wes phal, 1999; Rindo a, 1999). Take in Table 1 abou he e Take in Table 2 abou he e Boa d Composi ion The composi ion o he boa d has been examined in nume ous s udies (Pe ig ew, 1992; Wes phal, 1999). Boa d composi ion subsumes he indi idual di ec o ’s po en ial o sol e he a ious asks (Daily, Johnson and Dal on, 1999) and has gene ally been analysed by examining he demog aphic cha ac e is ics o he boa d (Rindo a, 1999). 15 A e a u he si ing o he da a by annual compa ison, i was possible o iden i y he di ec o s boa d who emained on he i m’s boa d yea a e yea (di ec o s’ enu e), he size o bo h go e nance mechanisms ( aking in o accoun po en ial depa u es o appoin men s each yea ), as well as iden i ying hose di ec o s on he managemen eam and manage s on he boa d. We also ca ied ou a de ailed e iew o he in o ma ion published in he p ess ega ding he selec ed i ms, using he Ba a z da abase and he Mad id S ock Exchange’s own da abase, which p o ided ‘impo an e en s’, epo ing a change in he company’s s a egy. Ba a z p o ides a summa y o he a icles published in he Spanish newspape s and jou nals. Fi s ly, we g ouped oge he a icles ela ing o each i m and hen analysed he con en s o each a icle. I he in o ma ion was epea ed, i was only coun ed once. The in o ma ion ob ained om he a icles was classi ied acco ding o a change model ha cap u es possible changes in a i m’s s a egy (Lan e al., 1992; Go don e al., 2000) (see Table 3). The e iew o he 101,100 published a icles ela ing o he i ms wi hin ou s udy was ca ied ou independen ly by a leas wo people. Each e iewe used a “s a egic change diagnos ic” empla e (Table 3). I was he e o e easy o alloca e each i em. Regula mee ings we e also held o esol e any possible doub s he e iewe s may ha e had. The esul s o bo h e iewe s we e c oss-checked and in he e en o disc epancies, an expe analyzed he di e ences. One a icle could be assigned o mo e han one change. The i s 10 i ms we e e iewed by h ee people: wo expe analys s and one junio , achie ing a minimum ag eemen be ween he expe s o 99.6%. The diagnos ic o e lap be ween he expe s and he junio a ied be ween 89% and 99%. Gi en he e y high numbe o a icles s udied, he change diagnos ic p ocedu e was e y leng hy; his phase o he in es iga ion ook six mon hs. Tele ónica dese es a special men ion, since, o he pe iod in ques ion, i appea ed in o e 14,000 published a icles, all o which we e e iewed and analyzed by he same pe son. Only he 961 a icles om 1993 we e c oss-checked, achie ing a 90% consensus (see Table 5). The sample consis ed o 1032 obse a ions company-yea (119 i ms 1993-2000). Finally, we excluded om he s udy hose obse a ions epo ing a change o CEO. As Golden and Zajac (2001) sugges , his is c ucial, gi en ha ou analysis o he in luence o he boa d o di ec o s on s a egic change. Ou inal sample includes 862 obse a ions on 119 i ms. Take in Table 3 abou he e Take in Table 4 abou he e Take in Table 5 abou he e 16 Dependen a iable The dependen a iable in his s udy is he s a egic change chosen by he i m. We subsc ibe o a b oad iew o s a egic change. S a egic change is a p ocess in ol ing mos pa s o a i m and i s ela ionship wi h he en i onmen . Some s udies on go e nance and s a egic change ake a much na owe app oach (B unninge e al., 2007). They concep ualize s a egic change as ei he he change om one gene ic s a egy o ano he (Boeke , 1989; Na anjo-Gil and Ha mann, 2007) o only include se ice addi ions, di es u es and/o indus y changes (Golden and Zajac, 2001; Goods ein e al., 1994). We a gue ha his gi es oo simplis ic and limi ed a iew on s a egic change. As wi h p io in es iga ions (Lan e al., 1992; Go don e al., 2000), ou ope a ionaliza ion o s a egic change includes changes in a ious dimensions (see Table 3). Recen in es iga ions ha e highligh ed he need o e alua e he pe o mance o he boa d, no ing how e ec i ely i ca ies ou i s unc ions (Zona and Za oni, 2007; Van Ees, Van de Laan and Pos ma, 2008; Wang and Ong, 2005; Huse, 2005). In his sense, he cu en school o hough ega ding boa d in ol emen ocuses on he boa d’s collabo a ion wi h he managemen eam and he de elopmen o i s du y o se e, as well as o con ol, when deciding he i m’s s a egy (Huse, 2005). I is ue ha he e a e wo ks ha use he i m’s pe o mance as a dependen a iable; bu he esul s ob ained a e con adic o y, making i impossible o d aw any clea conclusions (Daily e al., 2002; Dal on e al., 1999; Johnson e al., 1996). By elimina ing changes o CEO om he sample, we can p edic ha he changes in s a egy a e as a esul o he boa d ul illing i s unc ions. On he o he hand, s a egic change has s ong epe cussions wi hin he i m, which undamen ally a ec i s pe o mance. By s udying his a iable we can ake an ini ial s ep owa ds seeing he boa d’s e ec i eness e lec ed in he i m’s pe o mance (Mu phy and McIn y e, 2007). As wi h p io in es iga ions, we ha e used a iables o measu e a change in s a egy (see Table 3). A change in s a egy is deemed o ha e aken place when any o hese a iables changes. The s a egic change dependen a iable is ob ained om he quo ien o he o al numbe o changes ha ha e aken place in a i m du ing one yea o e he o al numbe o changes wi hin i ms in he sec o in he same yea . The li e a u e ega ding he pe o mance-s a egic change ela ionship ecognises a ime lag e ec (Bomme and Ells and, 1996; Kesne and Dal on, 1994; Pi che , Ch eim and Kis al i, 2000; Shen and Canella, 2002), so we collec ed da a o he dependen a iable wi h a wo-yea lag. We belie e ha his will sa egua d agains a po en ial e e se causali y and will also allow o he ime i akes o he i m’s pe o mance o in luence he decisions o change (Melin and Hellg en, 1994; B unninge e al., 2007). 17 Independen a iables Boa d size was de ined as he numbe o di ec o s on he boa d om yea o yea (Ocasio, 1994; K oll e al. 2007), aking in o accoun possible inco po a ions and depa u es du ing he yea . The a io o ou side s was calcula ed as he numbe o ou side di ided by he size o he boa d. In acco dance wi h ea lie in es iga ions (Daily and Dal on, 1992; Goods ein e al., 1994; Ko , 2006) and aking in o accoun he speci ica ions in Spain (Good Go e nance Code, 2006; Aldama Repo , 2003), we ha e de ined ou side boa d membe s as hose boa d membe s wi h a non-execu i e ole in he i m. P io s udies (Sunda amu hy, Mahoney and Mahoney, 1997; Ko , 2006) ha e used his measu emen as an app oxima e indica o o he ou side di ec o s as a go e nance mechanism, as i is no possible o iden i y which o he ou side boa d membe s may be di ec ly in luenced by he CEO, who ook an ac i e ole in hei appoin men s. The a io o ou side s squa ed was calcula ed as he squa e o he a io o ou side boa d membe s and was used o es ou p edic ion o a cu ilinea ela ionship be ween he a io o ou side boa d membe s and he i m’s s a egic change. Boa d enu e was calcula ed as he numbe o boa d membe s who ha e s ayed om one yea o he nex , di ided by he size o he boa d (Hamb ick, Cho and Chen, 1996; Michel and Hamb ick, 1992; Ko , 2006). Boa d enu e squa ed was calcula ed as he squa e o boa d enu e and was used o es ou p edic ion o a cu ilinea ela ionship be ween boa d enu e and he i m’s s a egic change. Finally, he pe cen age o boa d membe s on he TMT was calcula ed as he quo ien o he numbe o inside boa d membe s on he boa d o di ec o s each yea o e he size o he managemen eam. Con ol a iables Finally, and in line wi h p e ious s udies on he go e nance o i ms, his in es iga ion includes h ee con ol a iables in he analysis: i m size (Ha ison, To es and Kukalis, 1988; Ha eman, 1993; Ko , 2006), exp essed by he na u al loga i hm o sales; i m’s p e ious pe o mance, measu ed by he indica o o economic p o i abili y and duali y. We include a dummy a iable (duali y) in o de o e i y whe he he sepa a ion o he posi ions o CEO and chai man o he boa d a ec s s a egic change. This a iable akes a alue o one i he chai man o he boa d and he CEO a e he same pe son, and ze o i hey a e sepa a e pos s. The sepa a ion o he oles o CEO and chai man o he boa d is pe sis en ly ecommended in nume ous co po a e go e nance codes (Fe nández and A ondo, 2007) 18 Da a analysis Ou heo e ical discussion indica es he need o es ou p edic ions ega ding he ela ionship be ween he boa d’s inclina ion and s a egic change, using mul iple eg ession analysis. Take in Table 6 abou he e RESULTS The esul s o his in es iga ion a e se ou in Table 7. This shows he p incipal e ec s, as well as he in e ac ions, acco ding o he di e en models ha we e calcula ed. As he base model, model A shows only he con ol a iables. Models B and C include he i s h ee hypo heses o he s udy and models D and E show he in e ac ion be ween he composi ion o he boa d and he TMT. Hypo hesis 1 sugges s ha boa d size is posi i ely ela ed o he i m’s change in s a egy. The analysis suppo s his p edic ion (Model B, z = 5.76, p < .001; Model C, z = 5.35, p < .001; Model D, z = 5.78, p < .001; Model E, z = 6.49, p < .001). Equally, Hypo hesis 2 sugges s a cu ilinea ela ionship be ween membe s’ enu e on he boa d and hei inclina ion o s a egic change. The esul s con i m his p edic ion. The oo e m is signi ican ly nega i e (Model C, z = - 2.10, p < .01; Model D, z = -2.10, p < .01; Model E, z = -2.01, p < .01) , while he squa ed e m is signi ican ly posi i e (Model C, z = 2.28, p < .01; Model D, z = 2.29, p < .01; Model E, z = 2.12, p < .01). Thus, as p edic ed, boa d membe enu e can be seen o be posi i ely associa ed wi h s a egic change o highe le els o enu e, and nega i ely associa ed wi h s a egic change o lowe le els o enu e. Hypo hesis 3, which es ablishes a U-shaped ela ionship be ween he pe cen age o ou side s and s a egic change, was pa ially suppo ed. The esul s e eal a nega i e ela ionship be ween bo h a iables, wi hou in e ing he sign o he ela ionship, as sugges ed (Model C, z = -1.08; Model D, z = -1.06; Model E, z = -2.34, p < .05). We will examine his u he in he Discussion sec ion. Hypo hesis 4 sugges s ha he pe cen age o boa d membe s who a e also on he i m’s managemen eam s eng hens he ela ionship be ween he size o he boa d and s a egic change. The esul s se ou in Table 7 con i m his p edic ion (Model E, z = 3.11, p < .001). The in e ac ion be ween bo h a iables demons a es a posi i e and signi ican ela ionship wi h he i m’s change in s a egy. Finally, Hypo hesis 5 posi ed a simila si ua ion wi h ega d o boa d membe s’ enu e, sugges ing ha he pe cen age o boa d membe s on he managemen eam has a le e aging e ec 19 on he ela ionship be ween boa d enu e and s a egic change. On his occasion, he esul s achie ed a e no signi ican , al hough hey ollow he di ec ion we ha e se ou , and so do no suppo ou p edic ions (Model E, z = -0.55). The e ec s o he in e ac ion a e shown in he igu es below. Take in Table 7 abou he e Take in Figu e 1 abou he e DISCUSSION Ou s udy ollows he line o in es iga ion ha s esses he ac i e pa icipa ion o boa ds in impo an decisions o hei i ms, o mo e speci ically, in hose decisions ha in ol e s a egic change. Ou s a ing poin is o conside he boa d as an ac i e pa icipan in co po a e go e nance, and we sugges he e is a need o u he in es iga ion in o he ela ionships be ween he di e en agen s in ol ed in he di ec ion o he company, namely he TMT and he boa d. Ou a gumen highligh s he need o a close s udy o he ole o he boa d, and shows he many and di e se asks assigned o i , which need o be ca ied ou in ag eemen wi h he managemen eam o i o be mos e ec i e. This idea is based on he need o analyse in g ea e de ail he ag eemen be ween bo h go e ning bodies. The e o e, his wo k sugges s ha one o he condi ions equi ed o he ela ionship be ween TMT and boa d o unc ion is i s composi ion. In o he wo ds, when a syne gy exis s be ween he boa d and he TMT, he e will be a g ea e inclina ion o s a egic change. This is whe e we make ou con ibu ion. In his wo k we ha e made he i s a emp a he analysis o he cohe ence be ween boa d and TMT. We ha e de eloped and es ed a se o a gumen s ega ding he ole o he boa d in a i m’s s a egic change, as well as in es iga ing he le e aging e ec o one o he a iables ha de ine he composi ion o he managemen eam on ha ela ionship. Di ec e ec s o boa d composi ion The i s h ee o ou hypo heses s a e ha he demog aphic cha ac e is ics o boa ds help o explain whe he o no hey a e likely o change he i m’s s a egy. We ha e used a iables such as boa d size, o cha ac e is ics ha de ine hei composi ion, as p oxys o he g oup’s beha iou . Many in es iga ions ha e conside ed boa ds as “black boxes” and assign hei beha iou o “ he usual suspec s” (Finkels ein and Mooney, 2003). We a e well awa e o he deba e in he li e a u e abou his, which has been domina ed by con lic ing a gumen s and inconsis en indings. F om ou pe spec i e, and, wi h Golden and Zajac (2001), we sugges ha i is necessa y o bea in mind ha 20 e ec s may a y ac oss he ange o alues o he demog aphic a iable o in e es . In he same way, mo e ecen sugges ions (Macus, 2005; 2008) sugges ha he composi ion o he boa d, measu ed h ough demog aphic a iables, is an essen ial elemen o he boa d’s capabili ies. Ou esul s demons a e he impo ance o demog aphic a iables, in acco dance wi h he a gumen s se ou . The esul s indica e ha a boa d’s inclina ion o con ibu e o s a egic change wi hin a i m inc eases as he boa d size inc eases. This esul is consis en wi h he a gumen ha bigge boa ds a e mo e he e ogeneous in he knowledge, alues and expe ience o i s membe s, which enables in o ma ion om di e en sou ces o be unde s ood, and di e en esou ces o be exploi ed, which imp o es he condi ions o change. Equally, ou indings show ha i is possible o accep ha he ela ionship be ween boa d membe s’ leng h o enu e and hei inclina ion owa ds s a egic change is no linea . In his sense, new membe s o he boa d, o hose who ha e been on he boa d o a long ime, a e mo e likely o a ou change. In he o me ins ance, hey wish o p o e hemsel es as being compe en . In he la e case, hei ex ensi e expe ience and b oad knowledge o he i m’s en i onmen and i s esou ces, inclines hem owa ds change. Con e sely, boa d membe s in he in e media e s ages o enu e a e mo e isk-a e se, as he e is less p essu e on hem o demons a e hei alue. The a gumen s pu o wa d on bo h sides in he li e a u e a e alid, bu a di e en le els wi hin he demog aphic a iable in ques ion (Golden and Zajac, 2001). One o he ad an ages o sugges ing a non-linea ela ionship is he abili y o see p ecisely when he ela ionship changes om nega i e o posi i e. F om he e alua ion o ou model, i is possible o calcula e ha he nega i e impac o enu e on s a egic change occu s in hose boa d membe s whose enu e is sligh ly less han wo yea s. F om his poin , highe alues in boa d enu e p oduce a posi i e ela ionship. On he o he hand, he esul s do no allow us o con i m he non-linea ela ionship be ween he pe cen age o ou side boa d membe s and hei inclina ion owa ds s a egic change. We ound ha he ela ionship was nega i e and linea . This inding uns coun e o a gumen s ha ou side s a e a sou ce o cogni i e di e si y in he ask o decision-making; s imula ing mo e inno a i e decisions. Ra he , ou inding is consis en wi h he a gumen ha o impel s a egic change, boa ds should no ha e many ou side s. Gi en he composi ion o ou sample, we can explain he esul s achie ed by demons a ing ha he p esence o ou side s on ou boa ds is ele an , bu no su icien ly impo an o he ad an ages o his composi ion o ou weigh he possible disad an ages, and posi i ely a ec s a egic change. 21 In e ac ion e ec s o he op managemen eam and boa d composi ion This s udy also examines he in e ac ion be ween he TMT and he boa d in o de o explain he i m’s s a egic change, as we p edic ha bo h go e nance mechanisms o he o ganiza ion mus ac join ly when making impo an decisions. In o he wo ds, he boa d’s e ec i eness in i s moni o ing and ad iso y oles may be d i en no only by i s independence bu also by he na u e o he g oup dynamics be ween he boa d and he TMT. The p esence o boa d membe s on he managemen eam a ec s he de elopmen o hese ela ionships, in such a way ha he boa d’s composi ion has a le e aging e ec on s a egic decisions. I an inc ease in he numbe o boa d membe s, which a ou s i s he e ogenei y, is accompanied by an inc ease in boa d membe s on he managemen eam, i is mo e likely o o e come he po en ial s a egic pe sis ence o he TMT and, when he ci cums ances a e a ou able, o ini ia e s a egic change. Ou esul s p o e his ela ionship. Un o una ely, he esul s a e inconclusi e wi h ega d o boa d membe s’ enu e so ha , al hough he ela ionship ollows he gene al end we posi , i does no achie e signi ican alues. In his wo k we ha e conduc ed a se ies o impo an s udies in o he ela ionship be ween bo h go e ning bodies. Table 7 and Figu e 1 demons a e ha when he e is a highe numbe o a boa d membe on he managemen eam, he i m may o may no ini ia e s a egic change. Tha is o say, he p esence o boa d membe s on he TMT does no in i sel explain he inclina ion o change o no change he i m’s s a egic di ec ion (Model D). Howe e , when he numbe o boa d membe s on he managemen eam is lowe , a end owa ds s a egic change can be seen, which is e y sligh in he case o small boa ds and sligh ly mo e no iceable in i ms wi h bigge boa ds. Finally, a i m’s inclina ion owa ds s a egic change is e y ma ked when he boa d is la ge and he e a e a high numbe o boa d membe s on he managemen eam. Finally, he simul aneous analysis o he e ec s o he composi ion o a i m’s boa d o di ec o s and i s managemen eams demons a es ha bo h ha e e ec s on he i m’s s a egic change. Fi ms a e mo e likely o change hei s a egy when: (i) hey ha e a la ge boa d o di ec o s; (ii) boa d membe s ha e a e y sho enu e o , con e sely a e y long enu e; (iii) he size o he boa d and he numbe o boa d membe s on he TMT inc ease a he same ime. These esul s ein o ce he hypo hesis ha in o de o c ea e an e ec i e boa d, a de ailed s udy o aspec s o he composi ion o he boa d and he TMT is equi ed, which should no only conside he cha ac e is ics linked o he CEO, as has been done in he majo i y o adi ional s udies. A mo e de ailed s udy o he dynamics o he ela ionships be ween bo h go e nance mechanisms is also essen ial. 22 In conclusion, we ecognise ce ain limi a ions o his wo k. Fi s ly, he di icul y in es ablishing an indica o o he i m’s s a egic change has led us o conside his a iable as he sum o he di e en changes ha occu in any o he pa ame e s ha o m pa o he i m’s s a egy. I is necessa y o seek al e na i e measu emen s o his a iable. Secondly, he exclusion om he sample o hose cases whe e he e has been a change o CEO could also a ec he inal esul s. Thi dly, he i ms used in he sample a e only Spanish i ms, so i is doub ul whe he hey could be gene alised o o he coun ies. Finally, he choice o i ms lis ed on he s ock exchange p e en s us om s udying i ms wi h ac i e boa ds, bu which a e s ill oo small o be lis ed. Implica ions o u u e esea ch and p ac ice Despi e he abo e limi a ions, ou s udy has impo an implica ions o u u e esea ch and p ac ice. Fi s , i con ibu es o he li e a u e on co po a e go e nance ha in es iga es how boa d and managemen a e in e ela ed in he c ea ion o key o ganisa ional ou comes, as ea lie s udies ha e sough o do (B unnige e al., 2007). In ou wo k we highligh he s a e o ‘syn hesis’ eached in he in es iga ion in o boa ds o di ec o s (Rindo a, 1999), in which his go e ning body should be conside ed as a aluable esou ce o he i m and as such, should be exploi ed. Ou wo k demons a es he need o u he esea ch in his ield, aking a mul i heo e ical pe spec i e, combining di e en heo ies in he app oach o boa d esea ch. We would poin ou he need o conside ha , in p ac ice, boa ds ul il se e al asks simul aneously. The e o e, he ine i able symbiosis ha a ises be ween he TMT and he boa d o di ec o s when deciding on s a egy acili a es he de elopmen o he o he unc ions alloca ed o he boa d, as his body unde s ands and pa icipa es in he di ec ion he i m will ake. Secondly, ou s udy has implica ions o u u e esea ch. We belie e ha he co ec app oach o any esea ch in his ield mus ocus on he ela ionships wi hin he boa ds and ecognise ha he e ec i eness o boa ds may also be d i en by he na u e o in e -g oup dynamics be ween he boa d and TMT. We a gue ha o his ela ional dynamic o be p esen , he composi ion o bo h go e ning bodies mus be ela ed. Fu u e esea ch can examine o he a iables ela ing o he composi ion o hese bodies, and en ich he s udy by making p og ess in ela ionship dynamics. Thi dly, ou wo k shows ha he impo ance o he in e ac ion be ween boa d size and he p esence o boa d membe s on he managemen eam is much mo e ma ked when he size o he boa d is g ea e . Gi en he cu en economic condi ions, we belie e ha ou conclusions a e o g ea p ac ical in e es o i ms compe ing in u bulen sec o s and which need o eo ien a e hei business. 23 Ne e heless, in esponse o he ques ion o whe he he boa d o di ec o s plays an ac i e pa in a i m’s s a egic decision-making, ou answe is yes, and ha his ole is mo e ma ked when e ec i e dynamics a e es ablished be ween he di e en pa s ha comp ise he go e nance mechanisms. These dynamics, oge he wi h he boa d’s s uc u e and composi ion, allow us o speak o a i m’s dis inc i e capabili y. ACKNOWLEDGEMENTS This esea ch was suppo ed by he Minis e io de Ciencia e Inno ación, Spain (SEJ2006- 14369/ECON). We a e hank ul o he chie edi o William Judge, associa e edi o and wo anonymous e iewe s o hei help ul commen s du ing he e iew p ocess. BIBLIOGRAPHY Aldama Repo (2003) In o me de la comisión especial pa a el omen o de la anspa encia y segu idad, CNMV, Spain Alexande , J. A., Fennell, M. L. and Halpe n, M. T. (1993) Leade ship Ins abili y in Hospi als: The In luence o Boa d-CEO Rela ions and O ganiza ional G ow h and Decli e, Adminis a i e Science Qua e ly, 38: 74-99. Amason, A. C. and Sapienza, H. J. (1997) The E ec s o Top Managemen Team Size and In e ac ion No ms on Cogni i e and A ec i e Con lic , Jou nal o Managemen , 23: 495-516. Ande son, D. W., Melanson, S. J. and Maly, J. (2007) The e olu ion o co po a e go e nance: powe edis ibu ion b ings boa d o li e, Co po a e Go e nance: An In e na ional Re iew, 15: 780-797. And ews, K. (1980) Responsibili y o co po a e s a egy, Ha a d Business Re iew:104-118 Baliga, B. R., Moye , R. C. and Rao, R. S. (1996) CEO duali y and i m pe o mance: Wha 's he uss?, S a egic Managemen Jou nal, 17: 41-53. Ban el, K. A. and Jackson, S. E. (1989). Top managemen and inno a ions in banking: Does he composi ion o he op eam make a di e ence? S a egic Managemen Jou nal, 10:107-124. Ba ke , V. L. III and Duhaime, I. (1997) S a egic change in he u na ound p ocess: heo y and empi ical e idence, S a egic Managemen Jou nal, 18: 3-38. Ba nha , S. and Rosens ein, S. (1998) Boa d composi ion, manage ial owne ship, and i m pe o mance: an empi ical analysis, Financial Re iew, 33 (4):1-36. Baysinge , B. and Bu le , H. (1985) Co po a e go e nance and boa ds o di ec o s: pe o mance e ec s o changes in boa ds composi ion, Jou nal o Law, Economics and O ganiza ion, 1:101-124 Baysinge , B. and Hoskisson, R.E (1990) The composi ion o he boa ds o di ec o s and s a egic con ol: e ec s on co po a e s a egy, Academy o Managemen Re iew, 15: 72-87. Baysinge , B. D., Kosnik, R. D. and Tu k, T. A. (1991) E ec s o boa d and owne ship s uc u e on co po a e R&D s a egy, Academy o Managemen Jou nal, 34: 205-214. Beekun R., S edham, Y and Young, G. (1998) Boa d Cha ac e is ics, manage ial con ols and co po a e s a egy: a s udy o U.S. hospi als, Jou nal o managemen 24: 3-19. Benne , R.J. and Robson, P.J.A. (2004) The ole o boa ds o di ec o s in small and medium-sized i ms, Jou nal o Small Business and En e p ise De elopmen , 11: 95-113. Bhaga , S. and Black, B. (2002) The non-co ela ion be ween boa d independence and long- e m i m pe o mance, Jou nal o Co po a ion Law, 27 (2): 231-274. Boeke , W. (1989) S a egic change: he e ec s o ounding and his o y, Academy o Managemen Jou nal, 32 (3): 489-515. Boeke , W. (1997) S a egic change: he in luence o manage ial cha ac e is ics and o ganiza ional g ow h, Academy o Managemen Jou nal, 40: 152-170. Boeke , W. and Goods ein, J. (1993) Pe o mance and successo choice: The mode a ing e ec s o go e nance and owne ship, Academy o Managemen Jou nal, 36: 173-186. Bomme , W. H. and Ells and, A. F. (1996) CEO succeso choice, i s an eceden s and in luence on subsequen i m pe o mance: an empi ical analysis. G oup & O ganiza ion Managemen , 21: 105-123. B unninge, O. No dq is , M. and Wiklund, J. (2007) Co po a e Go e nance and S a egic Change in SMEs: The E ec s o Owne ship, Boa d Composi ion and Top Managemen Teams, Small Business Economics, 29: 295-308. Ca pen e , M. A. (2002) The implica ions o s a egy and social con ex o he ela ionship be ween op managemen eam he e ogenei y and i m pe o mance, S a egic Managemen Jou nal, 23: 275-284. Ca pen e , M. A. and Wes phal, J.D. (2001) The s a egic con ex o ex e nal ne wo k ies: examining he impac o di ec o appoin men s on boa d in ol emen in s a egic decision making, Academy o Managemen Jou nal, 44: 639-660. Cohen, J. and Cohen, P. (1983). Applied mul iple eg ession/co ela ion analysis o he beha io al sciences (2nd edi ion). Hillsdale, NJ: E lbaum. Cohen, M., Ma ch, J. and Olsen, J. (1972) A ga bage can model o o ganiza ional choice, Adminis a i e Science Qua e ly, 17: 1-25. Coles, J. W. and Hes e ly W. S. (2000) Independence o he chai man and boa d composi ion: Fi m choices and sha eholde alue, Jou nal o Managemen , 26, (2): 195-214. Coles, J.W., Mc Williams V. B. and Sen, N. (2001): An examina ion o ela ionship o go e nance mechanisms o pe o mance, Jou nal o Managemen , 27: 23-50. Combs, J. G. Ke chen D. J., Pe yman A. A. and Donahue, M.S. (2007) The Mode a ing E ec o CEO Powe on he Boa d Composi ion-Fi m Pe o mance Rela ionship, The Jou nal o Managemen S udies, 44 (8): 1299-1323. 24 Conyon, M. and Peck, S. (1998): Boa d con ol, emune a ion commi ees, and op managemen compensa ion, Academy o Managemen Jou nal, 41: 146-157. Daily, C. and Dal on, D. (1992) The ela ionship be ween go e nance s uc u e and co po a e pe o mance in en ep eneu ial i ms, Jou nal o Business Ven u ing, 7:375-386 Daily, C. and Dal on, D. (1993) Boa d o di ec o s leade ship and s uc u e: con ol and pe o mance implica ions, En ep eneu ship Theo y and P ac ice, Sp ing: 65-81. Daily, C. and Dal on, D. (1994) Bank up cy and co po a e go e nance: he impac o boa d composi ion and s uc u e, Academy o Managemen Jou nal, 37 (6): 1603-1617. Daily, C. M. (1995) The ela ionship be ween boa d composi ion and leade ship s uc u e and bank up cy eo ganiza ion ou comes, Jou nal o Managemen . 21, (6): 1041- 1057. Daily, C. M., Johnson, J. L. and Dal on, D. R. (1999) On he measu emen s o boa d composi ion: Poo consis ency and a se ious misma ch o heo y and ope a ionaliza ion, Decision Sciences, 30: 83-106. Daily, C. M., McDougall, C., Co in, J. G. and Dal on, D. R. (2002) Go e nance and S a egic Leade ship in En ep eneu ial Fi ms, Jou nal o Managemen , 28: 387-412. Dal on, D. R.; Daily, C. M., Johnson, J. L. and Ells and, A. E. (1999) Numbe o Di ec o s and Financial Pe o mance: a Me a-analysis, Academy o Managemen Jou nal, 42: 674-686. Dal on, D. R.; Daily, C.M.; Ells and, A., E.; Johnson, J. L. (1998) Me a-analy ic e iews o boa d composi ion, leade ship s uc u e, and inancial pe o mance, S a egic Managemen Jou nal.19, (3): 269-290. Da is, G. F. (1991) Agen s wi hou P inciples? The Sp ead o he Poison Pill h ough he In e co po a e Ne wo k, Adminis a i e Science Qua e ly, 36: 583-613. Da is, G. F. and Thompson, T.A. (1994) A social mo emen pe spec i e on co po a e con ol, Adminis a i e Science Qua e ly, 39: 141-173. Da is, J. H.; Schoo man, F.D and Donaldson, L. (1997) Towa d a S ewa dship heo y o managemen , Academy o Managemen Re iew, 22: 20-47. De And es, P., Azo a, V. and Lopez, F. (2005): Co po a e Boa ds in OECD Coun ies: size, composi ion, unc ioning and e ec i eness. Co po a e Go e nance: An In e na ional Re iew,13 (2): 197-210. Demb, A. and Neubaue , F. F. (1992) The Co po a e Boa d: Con on ing he Pa adoxes, Long Range Planning, 25 (3): 9-20. Deu sch, Y. (2005) The impac o boa d composi ion on i ms’ c i ical decisions: a me a-analy ic e iew, Jou nal o Managemen , 31 (3): 424-444. Donaldson, L. (1990) The e he eal hand: o ganiza ional economics and managemen heo y, Academy o Managemen Re iew, 15: 369-381. Donaldson, L. and Da is, J. H. (1991) S ewa dship heo y o agency heo y: CEO go e nance and sha eholde s e u ns, Aus alian Jou nal o Managemen , 16: 49-64. Donaldson, L. and Da is, J. H. (1994) Boa ds and company pe o mance- esea ch challenges he con en ional wisdom, Co po a e Go e nance: An In e na ional Re iew, 2: 151-160. Donohe , W. J, Reed, R. and S o ud-Ba nes, S. F. (2007) Incen i e Alignmen , Con ol, and he Issue o Misleading Financial Disclosu es. Jou nal o Managemen 33: 547-569 Dulewicz, V. and He be , P. (2004) Does he composi ion and p ac ice o boa ds and di ec o s bea any ela ionship o pe o mance o hei companies? Co po a e Go e nance: An In e na ional Re iew, 12 (3): 263-280. Eisenbe g, T; Sundg en, S., Wells, M.(1998) La ge boa d size and dec easing i m alue in small i ms, Jou nal o Financial Economics, 48 (1): 35- 55. Eisenha d , K. M., Kahwajy, J. L. and Bou geois, L. J., III (1997) Con lic and s a egic choice: How op managemen eams disag ee, Cali o nia Managemen Re iew, 39(2): 42-62. Eisenha d , K. M. (1989) Building heo ies om case s udy esea ch, Academy o Managemen Re iew, 14(4): 532–550. Fama, E. F.and Jensen, M. (1983) Sepa a ion o owne ship and con ol, Jou nal o Law and Economics, 26: 301-325. Fe nández, C. and A ondo, R. (2007) The E ec s o Owne ship S uc u e and Boa d Composi ion on he Audi Commi ee Mee ing F equency: Spanish e idence, Co po a e Go e nance: An In e na ional Re iew, 15, (5): 909-922. Finegold, D., Benson, G.S. and Hech , D. (2007) Co po a e Boa ds and Company Pe o mance: e iew o esea ch in ligh o ecen e o ms Co po a e Go e nance : An In e na ional Re iew, 15 (5): 865- 878. Finkels ein S. and Hamb ick D. C. (1989) Chie execu i e compensa ion: a s udy o he in e sec ion o ma ke s and poli ical p ocesses, S a egic Managemen Jou nal, 10: 121-134. Finkels ein S. and Hamb ick D. C. (1996) S a egic Leade ship: op Execu i es and Thei E ec s on O ganiza ions Wes : Minneapolis, MN. Finkels ein S. and Mooney, D. (2003) No he usual suspec s: How o use boa d p ocess o make boa ds be e , Academy o Managemen Execu i e, 17(2): 101-113. Fo bes D.P. and Milliken F.J. (1999) Cogni ions and co po a e go e nance: unde s anding boa ds o di ec o s as decision-making g oups, Academy o Managemen Re iew, 24: 489-505. Gab ielsson, J.(2007) Boa ds o di ec o s and en ep eneu ial pos u e in medium-size companies, In e na ional Small Business Jou nal, 25 (5): 511- 535. Ga cía, B. and Gil-de-Albo noz, N. (2007) The E ec o he Boa d Composi ion and i s Moni o ing Commi ees on Ea nings Managemen : e idence om Spain, Co po a e Go e nance: An In e na ional Re iew, 15 (6): 1413-1428. Ginsbe g, A. (1994) Minding he compe i ion: om mapping o mas e y, S a egic Managemen Jou nal, 15: 153-175. Golden, B. R. and Zajac, E.J (2001) When will boa ds in luence s a egy? Inclina ion x Powe = S a egic change, S a egic Managemen Jou nal, 22: 1087-1111. Goll I. Johnson, N. B and Rasheed, A: (2007) Knowledge capabili y, s a egic change, and i m pe o mance, The mode a ing ole o he en i onmen , Managemen Decision, 45: 161-179. Good Go e nance Code (2006) In o me del g upo especial de abajo sob e buen gobie no de las sociedades co izadas, Special Comision o conside a code o Companies’boa ds o di ec o s appoin ed by he spanish cabine . Goods ein, J., Gau am, K and Boeke , W. (1994) The E ec s o Boa d Size and Di e si y on S a egic Change, S a egic Managemen Jou nal, 15: 241-250. Go don, S. S., S ewa , W. H. J ., Sweo, R. and Luke , W. A. (2000) Con e gence e sus s a egic eo ien a ion: The an eceden s o as paced o ganiza ional change, Jou nal o Managemen , 26 (5): 911-945. Hamb ick, D. C, D'A eni, R.A. (1992) Top Team De e io a ion as Pa o he Downwa d Spi al o La ge Co po a e Bunk up cies, Managemen Science, 38(10): 1445-1466. Hamb ick, D. C., Cho, T. S. and Chen, M. J. (1996) The in luence o op managemen eam he e ogenei y on i ms’ compe i i e mo es, Adminis a i e Science Qua e ly, 41: 659-684. Ha ison, J.R., To es, D.L. and Kukalis, S. (1988) The changing o he gua d: Tu no e and s uc u al Change in he Top-Managemen posi ions, Adminis a i e Science Qua e ly, 33: 211-232. Ha eman, H.A. (1993) Ghos s o manage s pas : Manage ial succession and o ganiza ional mo ali y, Academy o Managemen Jou nal, 16: 864-881. Hend y K. and Kiel, G. (2004) The ole o he boa d in i m s a egy: in eg a ing agency and o ganisa ional con ol pe spec i es, Co po a e Go e nance: An In e na ional Re iew, 12(4): 500-520. 31 Table 4 Sample Table Geog aphical ange Spain Uni e se Companies lis ed on he Mad id S ock Exchange Con ex 119 i ms wi h da a o he pe iod (1993-2000) Sample size 862 obse a ions Da a Seconda y in o ma ion: Annual Repo Duns 50.000 P incipal Spanish companies; Dun&B ads ee .- annual di ec o y o Spanish i ms by annual income. Dicodi 50.000: Yea book o he la ges Spanish i ms Sabi. (Da abase wi h economic da a) Ba a z. P ess da abase – con ains e e ences o a icles published in he p ess and jou nals: p ima ily gene al and local Spanish in o ma ion (poli ics, economics and socio-labou ) Go e ning bodies: Annual Repo , Dicodi and Dun&B ads ee . Economic da a: Sabi S a egy (Ba a z): 101,100 a icles in he p ess Indus y Non- inancial Mad id S ock Exchange (CNMV) 32 Table 5: Re iew o published a icles Nº a icles 101.100 To al analys s 26 Nº expe s 2 Nº junio s 24 A e age a icles pe i m 783,78 Leng h o in es iga ion 6 mon hs 33 Table 6 Desc ip i e s a is ics and ze o-o de co ela ion MEAN S.D. 1. 2. 3. 4. 5. 6. 7. 8. 9. 1 Boa d size 11.7 5.36 .39** -.14** -.04 .39** -.07 .47** .06 .39** 2 Boa d Ou side s a io .85 .16 .39** -.73** -.07 .99** -.08* .29** -.02 .22** 3 Pe cen age Boa d inside s o e TMT .18 .19 -.14** -.73** .05 -.77** .05 -.26** .03 -.21** 4 Boa d enu e .88 .16 -.04 -.07 .05 -.07 .97** -.10** .04 -.01 5 Boa d Ou side s a io squa ed .75 .23 .39** .99** -.77** -.07 -.08* .29** -.03 .23** 6 Boa d enu e squa ed .80 .23 -.07 -.08* .05 .97** -.08* -.13** .05 -.01 7 Fi m size 5.22 .78 . 47** .29** -.26** -.10** .29** -.13** .09* .45** 8 Economic P o i abili y (-1) -.04 5.26 .06 -.02 .03 .04 -.03 .05 .09* .12** 9 S a egic change (+2) .15 .19 .39** .22** -.21** -.01 .23** -.01 .45** .12** ** Co ela ion is signi ican o 0.01 (bila e al) 34 Table 7 Reg ession analysis: de e minan s o s a egic change Model A Model B Model C Model D Model E Coe icien z-sco es Coe icien z-sco es Coe icien z-sco es Coe icien z-sco es Coe icien z-sco es (Cons an ) .02 .31 .05 .99 .04 .87 .04 .82 .01 1.40 Economic P o i abili y (-1) .08* 1.87 .07* 1.89 .06* 1.79 .06* 1.44 .06* 1.74 Fi m size .44*** 10.32 .31*** 6.50 .31*** 6.54 .28*** 5.83 .29*** 5.99 Duali y -.01 -.24 -.01 -.03 .01 .166 .01 .21 .00 .08 Boa d size .27*** 5.76 .27*** 5.35 .31*** 5.78 .36*** a 6.49 Boa d Ou side s a io -.03 -1.08 -.07 -1.06 -.17* -2.34 Boa d enu e -.34** -2.10 -.33** -2.10 -.32** -2.01 Boa d Ou side s a io squa ed .40 1.87 .30 1.06 31 1.06 Boa d enu e squa ed .37** 2.28 .37** 2.29 .34** 2.12 Pe cen age Boa d inside s o e TMT -.13 -1.61 -.15** a -2.37 Boa d size x Pe cen age Boa d inside s o e TMT .15*** 3.11 Boa d enu e x Pe cen age Boa d inside s o e TMT -.02 -.55 R2 .212 .269 .279 .286 .302 F 38.876*** 39.646*** 23.655*** 21.430*** 18.46*** p<.05; ** p<.01; *** p<.001. Z-sco es a e gi en in pa en heses unde coe icien es ima es a In he p esence o in e ac ions, ha he coe icien s o independen e ms making up he in e ac ions con ey no meaning ul, bu possibly misleading in o ma ion (Cohen and Cohen, 1983) 35 Figu e 1. In e ac ion e ec s o % Boa d inside s o e TMT and boa d size 0 0,1 0,2 0,3 0,4 0,5 0,6 0,7 0,8 0,9 1 Low Boa d Size High Boa d Size S a egic Change (+2) Low % Boa d inside s o e TMT High % Boa d inside s o e TMT