The Strategic Context of External Network Ties: Examining the Impact of Director Appointments on Board Involvement in Strategic Decision Making

Abstract

This study examines how external network ties determine a board's ability to contribute to the strategic decision making process. Although the simple number of director appointments to other boards does not affect board monitoring or advice on strategy, appointments that can provide directors with relevant strategic knowledge and perspective do predict such involvement. In effect, the strategic context of social network ties, not simply the number of ties, is an important influence on corporate governance.