Do Boards of Directors Really Matter in the Cooperation Behavior of Firms? An Exploratory Analysis in Spain

Maria Sonia Medina-Salgado,María Sacristán-Navarro,Luis Ángel Guerras-Martín

doi:10.3390/su122310114

Maria Sonia Medina-Salgado, María Sacristán-Navarro + Show 1 more

Open Access

https://doi.org/10.3390/su122310114

Copy DOI

Journal: Sustainability	Publication Date: Dec 3, 2020
Citations: 2	License type: CC BY 4.0

Affiliation: King Juan Carlos University

Abstract

This paper explores the relationship between one of the major aspects of the internal mechanism of corporate governance, i.e., the board of directors, and the corporate strategy of cooperation. The study was designed to investigate whether certain board of director characteristics have an influence on the propensity to cooperate in Spanish listed non-financial firms. Our findings reveal that the propensity to cooperate in Spanish firms is driven more by a tight “management effect” whereby the highest probability of occurrence is related to firms with duality on their boards and a lower proportion of nominee directors representing controlling shareholders. This paper adds evidence to the corporate governance-corporate strategy (alliance propensity) discussion in a continental country such as Spain.

Highlights

Strategic alliances are considered voluntary agreements between parties that involve a relationship of interdependence in which they share, exchange and jointly develop resources, products and technologies for the purpose of achieving goals that they would be unable to attain on their own and which lie somewhere between the organizations’ boundaries [1]
A descriptive statistical analysis reveals (Table 1) that the sample contains highly concentrated firms (52.94% on average) in terms of insider ownership (24.81% on average), albeit more dispersed and with a major family presence (38.7% of observations). It contains firms with an average of 11 board members, with a higher proportion of external directors than inside/executive directors, but in which almost 50% of the observations have the CEO as chair of the board of directors
These are large firms with a higher return on assets” (ROA) than return on equity” (ROE), which together with a high level of average debt (62.47%) means they have some restrictions on growth, very probably due to the recession during the years covered by the sample

Summary

Introduction

Strategic alliances are considered voluntary agreements between parties that involve a relationship of interdependence in which they share, exchange and jointly develop resources, products and technologies for the purpose of achieving goals that they would be unable to attain on their own and which lie somewhere between the organizations’ boundaries [1] They provide flexibility in situations in which, over time, there might well be a change in the need for resources and capabilities or in the partners’ shared targets. Recent research [12,13,14] recommends studying and further exploring the agency theory perspective, the mainstay of corporate governance doctrine, to understand behavior and strategic decisions, which include cooperation [15,16]

Objectives

Methods

Results

Discussion

Conclusion