Manuscript Type: Review Research Question: How do boards contribute to effective turnarounds? Does their composition matter? Does board turnover play a pivotal role? And what are the key characteristics of CEOs who steer firms successfully out of rough waters? Corporate turnaround has long attracted the attention of researchers. However, scholars still have not drawn definitive conclusions on how boards contribute to corporate performance in turbulent times. This paper aims to fill this gap through a literature review based on rigorous criteria. Research Insights: This paper examines the relationship between boards and financial distress by matching results from a unique sample of 39 quantitative publications extrapolated from the Business Source Premier, EBSCO-Host and JSTOR databases. The year of publication, author’s primary research field, sample size, country, sector and observation period all influence our insights. Despite board independence, the question whether certain board variables (e.g. size, composition, socio-demographic features and turnover; CEO turnover and duality) can improve firm survival chances still needs more research. The heterogeneity of the statistical methods has increased proportionally to time and journal ranking. Theoretical Implications: Among the existing managerial, financial and behavioral perspectives on this topic, the most promising streams of research and methodological issues are both discussed. Our results suggest the need to consider some important aspects when examining the contribution of boards to corporate performance in turbulent times. Are the changes in corporate governance variables determinants or simply consequences of financial distress? Who (and when) decides corporate governance changes? What are the reasons for corporate governance changes? What is the role of the top decision makers’ personality? How do environmental variables matter? Practitioner Implications: The paper provides guidelines to shareholders and other stakeholders (e.g. governments, public agencies, financial institutions) that want to improve their knowledge of board traits and capabilities that determine successful turnarounds.
Abatecola, G., Farina, V., Gordini, N. (2010). Empirical Research on the Role of Boards of Directors and Corporate Distress. A Systematic Review. Intervento presentato a: Corporate Governance & the Global Financial Crisis, The Wharton University, Wharton School, Philadelphia, USA.
Empirical Research on the Role of Boards of Directors and Corporate Distress. A Systematic Review
2010
Abstract
Manuscript Type: Review Research Question: How do boards contribute to effective turnarounds? Does their composition matter? Does board turnover play a pivotal role? And what are the key characteristics of CEOs who steer firms successfully out of rough waters? Corporate turnaround has long attracted the attention of researchers. However, scholars still have not drawn definitive conclusions on how boards contribute to corporate performance in turbulent times. This paper aims to fill this gap through a literature review based on rigorous criteria. Research Insights: This paper examines the relationship between boards and financial distress by matching results from a unique sample of 39 quantitative publications extrapolated from the Business Source Premier, EBSCO-Host and JSTOR databases. The year of publication, author’s primary research field, sample size, country, sector and observation period all influence our insights. Despite board independence, the question whether certain board variables (e.g. size, composition, socio-demographic features and turnover; CEO turnover and duality) can improve firm survival chances still needs more research. The heterogeneity of the statistical methods has increased proportionally to time and journal ranking. Theoretical Implications: Among the existing managerial, financial and behavioral perspectives on this topic, the most promising streams of research and methodological issues are both discussed. Our results suggest the need to consider some important aspects when examining the contribution of boards to corporate performance in turbulent times. Are the changes in corporate governance variables determinants or simply consequences of financial distress? Who (and when) decides corporate governance changes? What are the reasons for corporate governance changes? What is the role of the top decision makers’ personality? How do environmental variables matter? Practitioner Implications: The paper provides guidelines to shareholders and other stakeholders (e.g. governments, public agencies, financial institutions) that want to improve their knowledge of board traits and capabilities that determine successful turnarounds.
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