Abstract
Extant research pays too much attention to structural components of corporate boards, yet ignores the board informal hierarchy among directors with different backgrounds. Finance directors have well-developed specialized expertise and market-based experience could play critical roles in corporate decision making, should be treated prestigiously, however, they are generally undervalued by boards of Chinses listed firms after controlling individual director’s characteristic variables. Based on the perspective of resource dependence theory, we examine this board informal hierarchy in boards of Chinese listed firms. As China is in transitional economy, the influence of government force and market force on allocation of resources coexist, the state of resource dependence determines directors’ status ranking within boards. How finance directors are ranked can be conceptualized as a valuation process of the extent of firms’ dependence on government resources and marketized resources. The empirical test using the...
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