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Social elites on the board and executive pay in developing countries: Evidence from Africa
Hearn, Bruce Strange, R. Piesse, J.
Hearn, Bruce
Strange, R.
Piesse, J.
Publication Date
2017-02
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© 2017 Elsevier. Reproduced in accordance with the publisher's self-archiving policy. This manuscript version is made available under the CC-BY-NC-ND 4.0 license (https://creativecommons.org/licenses/by-nc-nd/4.0/)
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Yes
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openAccess
Accepted for publication
13/12/2016
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Abstract
This study applies a new multi-focal actor-centered institution-theoretic approach to examine the association between executive pay and the recruitment of social elites to the board of directors in developing countries. We use a sample of 119 initial public offerings (IPOs) from 17 African stock markets to model this relationship. The results suggest that a higher proportion of elites on the board is associated with lower executive pay. This is moderated by institutional quality; that is, lower institutional quality is associated with more directors drawn from social elites and with higher pay, while the opposite is true in higher-institutional-quality environments. Our findings confirm the importance of the social environment within which governance is embedded.
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Accepted manuscript
Citation
Hearn B, Strange R and Piesse J (2017) Social elites on the board and executive pay in developing countries: Evidence from Africa. Journal of World Business. 52(2): 230-243.
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Article