Abstract

http://ssrn.com/abstract=1416935
 
 

References (119)



 
 

Citations (8)



 


 



Resources or Power? Implications of Social Networks on Compensation and Firm Performance


Joanne Horton


University of Exeter Business School

Yuval Millo


London School of Economics & Political Science (LSE) - Accounting Department

George Serafeim


Harvard University - Harvard Business School

2012

Journal of Business, Finance and Accounting, Vol. 39, Issue 3-4: 399-426.

Abstract:     
Using a sample of 4,278 listed UK firms, we construct a social network of directorship-interlocks that comprises 31,495 directors. We use social capital theory and techniques developed in social network analysis to measure a director’s connectedness and investigate whether this connectedness is associated with their compensation level and their firms overall performance. We find connectedness is positively associated with compensation and with the firm’s future performance. The results do not support the view that executive and outside directors use their connections to rent extract. Rather the company compensates these individuals for the resources these better connections provide to the firm.

Number of Pages in PDF File: 46

Keywords: corporate governance, compensation, board of directors, social networks, performance

JEL Classification: G30, G32, J33, L22, M41

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Date posted: June 12, 2009 ; Last revised: July 19, 2013

Suggested Citation

Horton, Joanne and Millo, Yuval and Serafeim, George, Resources or Power? Implications of Social Networks on Compensation and Firm Performance (2012). Journal of Business, Finance and Accounting, Vol. 39, Issue 3-4: 399-426.. Available at SSRN: http://ssrn.com/abstract=1416935

Contact Information

Joanne Horton
University of Exeter Business School ( email )
Streatham Court
Xfi Building, Rennes Dr.
Exeter, EX4 4JH
United Kingdom
Yuval Millo
London School of Economics & Political Science (LSE) - Accounting Department ( email )
Houghton Street
London WC2A 2AE
United Kingdom
HOME PAGE: http://www.lse.ac.uk/collections/accounting/facultyAndStaff/profiles/Millo.htm
George Serafeim (Contact Author)
Harvard University - Harvard Business School ( email )
381 Morgan Hall
Boston, MA 02163
United States
HOME PAGE: http://drfd.hbs.edu/fit/public/facultyInfo.do?facInfo=ovr&facId=15705
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