Ranking Boards of Directors
29 Pages Posted: 15 Jan 2008
Date Written: January 2008
We propose ranking the importance (centrality) of boards of directors using a variant of the PageRank algorithm from computational graph theory. PageRank is at the heart of the immensely successful Google web search engine and, we argue, can be naturally extended to social network settings. Using tools from graph theory, we represent the board of directors as an undirected bipartite graph. Since PageRank operates on directed graphs we develop a procedure to pass from an undirected bipartite graph to appropriately weighted, directed projections. Finally, to illustrate the procedure we present preliminary rankings of publicly traded US and UK firms using this method. Our procedure provides a quick and efficient way to rank the importance of corporate boards.
Keywords: Social Networks, Boards of Directors
JEL Classification: G34, M41
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