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ABSTRACTManuscript Type: EmpiricalResearch Question/Issue: This study seeks to understand why the disclosure of individual executive compensation, as recommended by the German Code of Corporate Governance, met with resistance in some firms while being a welcome innovation for others. Employing the theoretical perspective of institutional inertia and change, this paper identifies the characteristics of a firm likely to embrace or resist a management practice imported from an Anglo‐American system of corporate governance.Research Findings/Results: Using data on large German firms for the years 2002 through 2005, the study shows that institutional ownership, dispersed ownership, state ownership, prior adoption of shareholder value‐oriented practices, and firm size are positively and significantly associated with the disclosure of individual executive compensation. On the other hand, the size of the supervisory board and firm age are negatively and significantly associated with individual disclosure of executive compensation.Theoretical Implications: This study provides empirical support for the institutional inertia or change perspective at the national level for the adoption of contested management practices, taken from the Anglo‐American system and translated to the German model. As such, it adds to the argument on convergence/divergence in comparative corporate governance literature, as well as support for the neo‐institutional perspective in helping to further understand institutional change.Practical Implications: This study offers insights to policy makers who aim to create an institutional environment that accepts corporate governance practices translated or negotiated from a different variety of capitalism. In addition, it provides a useful synthesis of the relevance and effectiveness of codes of corporate governance, thus helping policy makers to recommend continuation with the current elements of the code or to make such provisions compulsory.

PurposeThis study aims to analyse trust and distrust as specific board processes between the board chair and chief executive officer (CEO) aimed at reducing corporate governance (CG) risk partially mitigated by regnant CG mechanisms. This study incorporates the nascent literature that posits trust and distrust as two separate constructs that co-exist simultaneously to recasts them in the CG domain.Design/methodology/approachThis paper analysed data from 20 in-depth interviews conducted with board representatives at four financial services firms in The Netherlands, South Africa and Zimbabwe.FindingsThis paper found that the foundational bases of the chair–CEO relationship determine how trust and distrust are apportioned between them, which impacts board dynamics. This paper also confirmed that the constructs of trust and distrust are separate thus do not sit at opposite ends of a single continuum. Finally, this paper found that high levels of task-based distrust (as opposed to mistrust) are necessary during periods of organisational distress and more effective if there are also high levels of relational trust between the parties.Originality/valueThis paper empirically examines the relationship between trust and distrust in CEO–chair dyadic relationships in multiple companies across multiple countries. This paper also introduces the concept of tempered trust, which is defined as interpersonal trust tempered by task-based distrust, recasting the traditional characterisation of trust and distrust in the CG domain, thereby making a useful contribution to the literature on board dynamics.

Purpose– This study aims to examine the role the structure of corporate boards plays in the failure of the firm. Specifically, it examines whether the remuneration committee is related to corporate failure in the UK.Design/methodology/approach– The study uses 1,835 firm-year observations for 98 failed and 269 non-failed UK-listed non-financial firms between the periods of 1994 and 2011. This study used pooled cross-sectional, fixed and random effects LOGIT models to estimate whether corporate failure is related to remuneration committee in the UK.Findings– The findings indicate that corporate failure is negatively related to the independence of the remuneration committee chairman and remuneration committee's effectiveness but not remuneration committee's presence, size and meetings. However, a positive and significant relationship was observed between corporate failure and remuneration committee independence.Practical implications– The findings of the study provide support for the appropriateness of agency theory as analytical lens through which to study the efficacy of remuneration committee, especially the independence of the remuneration committee chairperson, as a board monitoring device, in the context of corporate failure.Originality/value– The paper adds to existing literature on corporate governance by establishing the likely causes of corporate failure in the UK.

One of the institutions in which the gender gap remains a contestable issue is the board of directors, where the proportion of female directors is still low. While some countries have achieved higher proportions of female directors on their corporate boards, others have not registered even a single one. Drawing on social role theory, that places emphasis on traditional gender activities, this study starts by arguing that board directorship is an agentic role and more suitable for men. The study shows that key social institutions have the potential to alleviate such stereotypical attitudes or to maintain the status quo. Employing a robust statistical technique in two-stage least squares (2SLS), this study finds that the representation of women in other key national institutions, such as in politics, positively affects the appointment of female directors on boards. On the other hand, religiosity has a negative causal effect on female board appointments.

This is the peer reviewed version of the following article: CHIZEMA, A. . et al., 2015. Politically connected boards and top executive pay in Chinese listed firms. Strategic Management Journal, 36 (6), pp. 890-906, which has been published in final form at http://dx.doi.org/10.1002/smj.2253. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Self-Archiving. ; Drawing on social comparison theory, this study examines the relationship between politically connected boards and top executive pay. Moreover, given the socialist orientation of China, tests are also carried out to establish the relationship between politically connected directors and pay dispersion across the firm. We find a negative association between politically connected boards and top executive pay. We also find that politically connected boards are negatively associated with pay dispersion, i.e., the higher the number of political directors on the board the smaller the gap between top executive pay and average employee pay. Finally, our study shows that politically connected directors weaken the pay-performance link. These findings have important theoretical, policy, and managerial implications.

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