The Political Duality: On the Advantages and Disadvantages of Ex-Politicians and Former Government Officials Serving on Boards of Directors

Fuller, M. A., & Bart, C. (2020). The political duality: On the advantages and disadvantages of ex-politicians and former government officials serving on boards of directors. Corporate Board: Role, Duties and Composition, 16(3), 8-23. https://doi.org/10.22495/cbv16i3art1

16 Pages Posted: 13 Nov 2020

See all articles by Mark Fuller

Mark Fuller

Schwartz School of Business, Saint Francis Xavier University

Christopher K. Bart

Corporate Missions Inc. + Caribbean Institute of Directors

Date Written: September 11, 2020

Abstract

In this study, we examine two key issues situated at the intersection of corporate governance and corporate political activity literature. The first is whether the presence of ex-politicians or former government officials on a corporate board provides a competitive advantage for the firm. A second, related question is whether the presence of these outside directors on the board of directors is perceived as desirable by their fellow directors. While some have characterized the study of board processes as a black box (Leblanc, 2003; Pugliese et al., 2009) due to the difficulty in acquiring data, we circumvented this challenge by directly surveying 82 Canadian board members, then delved deeper with ten directors using supplemental qualitative interviews. The results were examined via the lens of strategic positioning theory in contrast to the well-worn use of agency and resource dependency theories in the literature. Our findings suggest that heterogeneous benefits may accrue depending upon the industry involved, and the political experience of the director(s) in question. However, a majority of current directors expressed significant reservations concerning the appointment of a political director. These findings, combined with the understudied Canadian context and the use of qualitative research methods, contribute to the extant literature.

Keywords: Board Composition, Business-Government Relations, Politicians, Government Officials, Outside Directors, Strategic Positioning, Canada

JEL Classification: G34, D72, D73

Suggested Citation

Fuller, Mark and Bart, Christopher K., The Political Duality: On the Advantages and Disadvantages of Ex-Politicians and Former Government Officials Serving on Boards of Directors (September 11, 2020). Fuller, M. A., & Bart, C. (2020). The political duality: On the advantages and disadvantages of ex-politicians and former government officials serving on boards of directors. Corporate Board: Role, Duties and Composition, 16(3), 8-23. https://doi.org/10.22495/cbv16i3art1, Available at SSRN: https://ssrn.com/abstract=3698705

Mark Fuller (Contact Author)

Schwartz School of Business, Saint Francis Xavier University ( email )

3090 Martha Drive
Antigonish, Nova Scotia B2G2W5
Canada
9028672252 (Phone)

Christopher K. Bart

Corporate Missions Inc. + Caribbean Institute of Directors ( email )

30 Grand Trunk Crescent
Suite 3512
Toronto, Ontario M5J3A4
Canada
9055156399 (Phone)

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