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The Effects of CEO Trustworthiness on Directors’ Monitoring and Resource Provision

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Abstract

Because of the importance of board members’ resource provision and monitoring, a substantial body of research has been devoted to ascertaining how directors can be incented to perform their responsibilities. We use social exchange theory to empirically examine how board members’ resource provision and monitoring are affected by their perceptions of the CEOs’ trustworthiness. Our findings suggest that board members’ perceptions of the CEO’s ability, benevolence, and integrity have different effects on the board members’ resource provision and monitoring. Our results further suggest that board members’ governance behaviors are moderated by the board’s performance evaluation practices.

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Notes

  1. In the United States, the CEO-chair can no longer support a director’s reappointment, due to the Sarbanes–Oxley Act, but they may still facilitate his or her appointment at another board.

  2. Longitudinal dyadic data or experimental study are required to examine the dynamic relationships between directors and CEO and it will be difficult to get matched data from directors and CEO or conduct an experiment with directors and CEO as participants.

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Acknowledgments

We acknowledge the Spanish Institute of Directors (Instituto de Consejeros y Administradores de España), Conference Board of Canada, The Singapore Association of the Institute of Chartered Secretaries and Administrators for their support to our survey, and Elida Maia-Ramires & Javier Perote for helpful comments. Esther B. Del Brio and Toru Yoshikawa are also grateful to the Research Agency of the Spanish Government (Grant ECO2010-20741) and Junta de Castilla y Leon (Project SA382A11) for funding.

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Authors and Affiliations

  1. Departamento de Administracion y Economia de la Empresa, Universidad de Salamanca, Campus Miguel de Unamuno, Edificio FES, Salamanca, Spain

    Esther B. Del Brio

  2. Lee Kong Chian School of Business, Singapore Management University, Singapore, Singapore

    Toru Yoshikawa & Wee Liang Tan

  3. DeGroote School of Business, McMaster University, Hamilton, ON, Canada

    Catherine E. Connelly

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  1. Esther B. Del Brio
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  2. Toru Yoshikawa
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  3. Catherine E. Connelly
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  4. Wee Liang Tan
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Correspondence to Esther B. Del Brio.

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Del Brio, E.B., Yoshikawa, T., Connelly, C.E. et al. The Effects of CEO Trustworthiness on Directors’ Monitoring and Resource Provision. J Bus Ethics 118, 155–169 (2013). https://doi.org/10.1007/s10551-012-1575-0

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