The strategic value of CEO external directorate networks: Implications for CEO compensation

Marta A. Geletkanycz, Brian K. Boyd, Sydney Finkelstein

Research output: Contribution to journalArticlepeer-review

144 Scopus citations

Abstract

This study examines the relationship between CEO external directorate networks and CEO compensation. Drawing on previous research showing a link between executives' external networks, firm strategy, and performance, the study argues that executive external networks are strategically valuable to firms; thus, they should be reflected in executive compensation. The study further examines whether firm diversification, with its elevated demand for strategic resources, moderates the relationship between CEO external directorate networks and pay. Hypotheses are tested using a sample of 460 Fortune 1000 firms. Analyses reveal that the rewards to CEO external directorate networks are contingent upon the firm's level of diversification. Implications for future research and practice are discussed.

Original languageEnglish (US)
Pages (from-to)889-898
Number of pages10
JournalStrategic Management Journal
Volume22
Issue number9
DOIs
StatePublished - Sep 2001
Externally publishedYes

Keywords

  • CEO compensation
  • Executive networks
  • Social capital
  • Strategic leadership

ASJC Scopus subject areas

  • Business and International Management
  • Strategy and Management

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