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Boards of Directors and the Adoption of a CEO Performance Evaluation Process: Agency — and Institutional — Theory Perspectives

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  • Gary J. Young
  • Yvonne Stedham
  • Rafik I. Beekun

Abstract

Using both agency and institutional theories, we examined factors associated with the board’s adoption of a formal process for evaluating the performance of the corporation’s chief executive officer (CEO). Our sample was drawn from the hospital industry. Results show that an independent board chairperson, the level of market competition and the degree of managed care penetration were significant predictors of whether or not the board had adopted a formal CEO evaluation process. These findings imply that initiatives to improve governance effectiveness based on agency theory should take into account the institutional environment of corporate boards.

Suggested Citation

  • Gary J. Young & Yvonne Stedham & Rafik I. Beekun, 2000. "Boards of Directors and the Adoption of a CEO Performance Evaluation Process: Agency — and Institutional — Theory Perspectives," Journal of Management Studies, Wiley Blackwell, vol. 37(2), pages 277-296, March.
    • Handle: RePEc:bla:jomstd:v:37:y:2000:i:2:p:277-296
    DOI: 10.1111/1467-6486.00181
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    Cited by:

    1. Rebecca Booth & Donald Nordberg, 2021. "Self or other: directors’ attitudes towards policy initiatives for external board evaluation," International Journal of Disclosure and Governance, Palgrave Macmillan, vol. 18(2), pages 120-135, June.
    2. Gloria Cuevas-Rodríguez & Jaime Guerrero-Villegas & Ramón Valle-Cabrera, 2019. "Privatization and organizational changes: Evidence from Spain," Working Papers 19.04, Universidad Pablo de Olavide, Department of Business Organization and Marketing (former Department of Business Administration), revised Jun 2019.
    3. AbdAlrahman Magdy Said Fayed & Shymaa Mahmoud Youssef Elshoura & Rasha Ali Mosallam, 2021. "Governance structures and practices in for‐profit and not‐for profit hospitals in Egypt," International Journal of Health Planning and Management, Wiley Blackwell, vol. 36(4), pages 1069-1080, July.
    4. Leslie Eldenburg & Benjamin E. Hermalin & Michael S. Weisbach & Marta Wosinska, 2001. "Hospital Governance, Performance Objectives, and Organizational Form," NBER Working Papers 8201, National Bureau of Economic Research, Inc.
    5. Gloria Cuevas-Rodriguez & Jaime Guerrero-Villegas & Ramón Valle-Cabrera, 2014. "Privatization effects on corporate governance, strategy and compensation systems," Working Papers 14.03, Universidad Pablo de Olavide, Department of Business Organization and Marketing (former Department of Business Administration).
    6. William B. Stevenson & Robert F. Radin, 2009. "Social Capital and Social Influence on the Board of Directors," Journal of Management Studies, Wiley Blackwell, vol. 46(1), pages 16-44, January.
    7. Uribe-Bohorquez, María-Victoria & Martínez-Ferrero, Jennifer & García-Sánchez, Isabel-María, 2018. "Board independence and firm performance: The moderating effect of institutional context," Journal of Business Research, Elsevier, vol. 88(C), pages 28-43.
    8. Eddy Cardinaels & Naomi Soderstrom, 2013. "Managing in a Complex World: Accounting and Governance Choices in Hospitals," European Accounting Review, Taylor & Francis Journals, vol. 22(4), pages 647-684, December.
    9. Fabrizio Sarto & Corrado Cuccurullo & Massimo Aria, 2014. "Exploring healthcare governance literature: systematic review and paths for future research," MECOSAN, FrancoAngeli Editore, vol. 2014(91), pages 61-80.
    10. VILMA Spahiu, 2015. "Evaluation of Security Issuse. New Threats Twoards National and International Security," European Journal of Interdisciplinary Studies Articles, Revistia Research and Publishing, vol. 1, May - Aug.
    11. Chen, Shouming & Bu, Miao & Wu, Sibin & Liang, Xin, 2015. "How does TMT attention to innovation of Chinese firms influence firm innovation activities? A study on the moderating role of corporate governance," Journal of Business Research, Elsevier, vol. 68(5), pages 1127-1135.
    12. Majdi Ben Selma & Wenxi Yan & Taïeb Hafsi, 2022. "Board demographic diversity, institutional context and corporate philanthropic giving," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 26(1), pages 99-127, March.

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