Johann Valentowitsch, Michael Kindig, Wolfgang Burr
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引用次数: 0
Abstract
Purpose
The effects of board composition on performance have long been discussed in management research using fractionalization measures. In this study, we propose an alternative measurement approach based on board polarization.
Design/methodology/approach
Using an exploratory analysis and applying the polarization measure to German Deutscher Aktienindex (DAX)-, Midcap-DAX (MDAX)- and Small Cap-Index (SDAX)-listed companies, this paper applies the polarization index to examine the relationship between board diversity and performance.
Findings
The results show that the polarization concept is well suited to measure principal-agent problems between the members of the management and supervisory boards. We reveal that board polarization is negatively associated with firm performance, as measured by return on investment (ROI).
Originality/value
This exploratory study shows that the measurement of board polarization can be linked to performance differences between companies, which offers promising starting points for further research.
期刊介绍:
The Baltic region has experienced rapid political and economic change over recent years. The challenges to managers and management researchers operating within the area are often different to those experienced in other parts of the world. The Baltic Journal of Management contributes to an understanding of different management cultures and provides readers with a fresh look at emerging management practices and research in the countries of the Baltic region and beyond.