Date of Award
2021
Document Type
Dissertation
Degree Name
PhD in Business
Department
Department of Management
First Advisor
Martin J. Conyon
Second Advisor
Michael A. Quinn
Third Advisor
Simon Peck
Abstract
This dissertation explores how director age affects a firm’s social domain, and how board-level oversight of firms’ innovation activities affects financial performance. Specifically, the dissertation points to board configurations that can potentially improve social and financial performance. The first chapter reviews the literature by examining two research streams linking board composition to corporate social performance (CSP) and innovation. The chapter presents the theoretical and empirical underpinnings of these two streams. It details the descriptive and thematic findings and offers an understanding of the different contexts in which board composition relates to both CSP and innovation. This chapter also discusses inconsistencies between conceptual thinking and empirical verification and proposes several research avenues to advance knowledge in these areas. The second chapter builds on the research opportunities suggested in the first chapter, using quantile regression analysis to examine the differential effect of director age on CSP at distinct parts of the social performance distribution. This chapter finds that the effect of director age on CSP is not constant across the social performance distribution. The findings show that the quantitative effect is greater in magnitude for high-socially performing firms relative to low-socially performing firms. The findings suggest that younger board members are not correlated to significantly better social performance. The study further highlights the importance of moving beyond conditional mean regressions to using methods that uncover discrete board effects in order to ensure that (slope) parameter heterogeneity is not masked. The first chapter indicates that research on optional board committees is limited and suggests that these committees can be effective governance mechanisms that oversee a firm’s activities in specific and narrowly defined functions. Accordingly, the third chapter, co-authored with Dr. Michael Quinn, examines the efficacy of the research and development (R&D) committee, an optional board committee not studied in the literature, and tests whether its presence is important for effective oversight of R&D-related activities. The chapter empirically explores the effect of R&D committee presence on firm financial performance. Using an instrumental variable GMM approach, the findings show a positive and statistically significant relationship between R&D committee presence and firm financial performance. Additionally, the study finds that R&D committee presence positively moderates the relationship between a firm’s R&D intensity and its financial performance. These findings suggest that board R&D committee presence helps firms make more of their R&D investments. The findings also underscore the importance of voluntarily setting up these board committees since they may be essential for improved decision-making on innovation-related strategic decisions.
Recommended Citation
Ghaddar, Sami, "Board of Director Composition: An Examination of How Director Age and Board Innovation Committees Impact Corporate Social and Financial Performance". 2021. 1.
https://scholars.bentley.edu/etd_2021/1
Included in
Behavioral Economics Commons, Business Administration, Management, and Operations Commons, Growth and Development Commons, Industrial Organization Commons, Organizational Behavior and Theory Commons
