External COO/presidents as expert directors: A new look at the service role of boards

Ryan Krause, Matthew Semadeni, Albert A. Cannella

Research output: Contribution to journalArticle

37 Scopus citations

Abstract

Much of the scholarship on boards of directors has examined either the control (i.e., monitoring) role or the resource dependence role that boards fill. Relatively little has examined the service role, wherein directors provide advice and guidance to management. This study builds on recent work exploring director expertise by asking how operational expertise on boards impacts firm performance. We find that having external COO/presidents on a board of directors positively impacts firm performance when the firm's operational efficiency is declining, but negatively impacts performance when the firm's operational efficiency is improving. We also find that other types of external executives serving as directors exhibit the opposite relationship, suggesting that the value of director expertise is context-dependent. We discuss the implications of these findings for director selection.

Original languageEnglish (US)
Pages (from-to)1628-1641
Number of pages14
JournalStrategic Management Journal
Volume34
Issue number13
DOIs
StatePublished - Apr 18 2013

Keywords

  • COO/presidents
  • boards of directors
  • expertise
  • operational efficiency
  • top management

ASJC Scopus subject areas

  • Business and International Management
  • Strategy and Management

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