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 contrib-ute 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 per-spective 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. Increased research attention is being devoted to the influence of corporate board members on im-portant organizational outcomes. According to agency theorists, effective boards independently monitor strategic challenges facing a firm and eval-uate management's performance in addressing