Trond Randøy - Academia.edu (original) (raw)
Papers by Trond Randøy
Corporate Governance: An International Review, 2018
Entrepreneurship Theory and Practice, 2013
This study examines the effect of foreign (Anglo-American) board membership on corporate performa... more This study examines the effect of foreign (Anglo-American) board membership on corporate performance measured in terms of firm value (Tobin’s Q). On a basis of firms with headquarters in Norway or Sweden the study indicates a significantly higher value for firms that have outsider Anglo-American board member(s), after a variety of firm-specific and corporate governance related factors have been controlled
This paper analyzes the determinants of female board representation in the listed non-financial f... more This paper analyzes the determinants of female board representation in the listed non-financial firms in four Nordic countries over the 2001-2007. We explore the institutional, industry and firm specific factors that lead to stronger female representation on the corporate boards. In particular, we explore how the distribution of the directors along other demographic dimensions (age, nationality, organizational role) influences the
SSRN Electronic Journal, 2000
SSRN Electronic Journal, 2000
SSRN Electronic Journal, 2000
ABSTRACT Scholars have previously investigated country and organizational-level factors associate... more ABSTRACT Scholars have previously investigated country and organizational-level factors associated with the incidence of female directors on boards. These studies, however, cannot explain why, in countries with strong gender equality and pressure for female directorships, firms are still hesitant to promote new women to their boards. To address this issue we – in this study – introduce the cognitive and affective processes related to directors’ identification with the traditional corporate elite as an explanation for the slow organizational response to pressure for gender diversity on boards. We bridge the social identity and critical mass theory to further show how these responses may vary with the current composition of the board. Viewing the board as a locus for the maintenance of the positive distinctiveness of the established corporate elite, we conjecture that new female appointments will not only depend on the current share of women on board but also on the current (minority) share of board positions held by male directors who are not prototypical of the established elite. We also uncover how this relationship is moderated by the share of institutional investors’ ownership. We test and support these propositions on a sample of 387 publicly traded Nordic corporations during 2001-2008.
Corporate Governance: An International Review, 2014
ABSTRACT Research Question/IssueCorporate boards often change their working language when they ac... more ABSTRACT Research Question/IssueCorporate boards often change their working language when they acquire foreign members who are not proficient in the language of the firm's home country. Consequently, boards “talk” in one language but “think” in another. The purpose of the present study is to explore and explain how language diversity influences the work processes of corporate boards.Research Findings/InsightsOn the basis of a multiple case study of nine multinational corporations (MNCs) from four Nordic countries, we discovered evidence of impoverished and silenced discussions in board meetings in those case companies that were unprepared to switch to English as the new working language of the board. Some board members found it difficult to contribute to board meetings, articulate disagreement, and felt socially excluded from the board, which added to the “costs” of language diversity in these firms. In contrast, such effects on work processes were not revealed in the well-prepared companies. However, the presence of employee representatives on the boards of both the well-prepared and unprepared case companies made it more difficult to conduct work processes in English because these members often lacked sufficient language proficiency. Thus, our findings suggest that the board co-determination act of the Nordic corporate governance model may be associated with the hidden costs of using a non-native language.Theoretical/Academic ImplicationsOur study makes four contributions to research on board diversity. Firstly, it highlights the “silencing effect” of language diversity on board processes. Secondly, it emphasizes the linkage between language diversity and board processes. Thirdly, it provides additional evidence that language is a distinct dimension of diversity. Fourthly, it discovers the issue of languages in board work as a new research topic that is worthy of scholarly attention.Practitioner/Policy ImplicationsFirms need to be aware of and anticipate the potential effects of language diversity on the work processes of their boards in order to ensure that “the voice of diversity” is heard. The board itself as well as the rest of the organization can take preparatory measures such as producing all board material in the new working language, providing translation services, selecting board members with the required language proficiency, and adopting the same working language in the corporate board and the executive management team. Although these measures can be implemented gradually or at a faster pace, they need to be in place before foreign members join the board. We would argue that consistent use of one and the same language in the corporate board and the executive management team supports transparency and good corporate governance practices. In our opinion, reaping the benefits of board diversity is the particular responsibility of the chairperson. Even though English is generally well understood in the Nordic countries, chairpersons should also consider the possible negative effects associated with the use of a board language that is non-native to most of its members.
SSRN Electronic Journal, 2000
ABSTRACT Multinational corporations internationalize their corporate boardrooms in order to capit... more ABSTRACT Multinational corporations internationalize their corporate boardrooms in order to capitalize on their commercial and financial internationalization. Board internationalization provides access to specialized knowledge and skills, broadens social networks and ensures greater transparency of strategic decision-making. The entry of a foreign board member is often coupled with a change in the working language of the board. The purpose of the present study is to explore and explain how increased language diversity influences decision-making and work processes of corporate boards. We draw on previous research on board internationalization, diversity and language in multinational corporations. Based on a multiple case study of nine multinational corporations from four Nordic countries, we find evidence of impoverished and silenced discussions in board meetings in those case companies that were unprepared to switch to English as the new working language of the board. Some board members found it difficult to contribute to board meetings, articulate disagreement and felt socially excluded from the board. Such effects on decision-making and work processes were not found in the well-prepared companies. The study adds to the understanding of different modes to internationalize the board as a response to different forms of internationalization of the firm.
SSRN Electronic Journal, 2000
ABSTRACT Despite the global reach of their commercial activities, many multinational firms have p... more ABSTRACT Despite the global reach of their commercial activities, many multinational firms have proved slow in internationalizing their boards of directors. Based on a panel study of the internationalization of the boards of 347 non-financial firms from the Nordic countries, we find a higher fraction of international board membership in firms with more foreign sales, in firms with more foreign ownership and in firms whose shares are traded on foreign (mostly European) stock exchanges. Moreover, we find international directors and national directors with international experience complementary. The first-mentioned group is found to serve a monitoring role, related to financial internationalization of the firm, whereas the latter category fills an advisory role related to commercial internationalization. Hence, different types of firm internationalization – commercial versus financial – might call for different types of board internationalization.
International Review of Financial Analysis, 2014
ABSTRACT The global microfinance industry has experienced high growth rates over the past decades... more ABSTRACT The global microfinance industry has experienced high growth rates over the past decades, and the World Bank foresees a future market with billions of customers. However, the industry's continued growth is contingent on its ability to create a governance structure that supports microfinance institutions' long-term performance. Because microfinance institutions' performance is multidimensional and difficult to measure, prior research has not been successful in establishing consistent associations between governance structures and microfinance institutions' performance. We apply microfinance rating scores - a unique innovation of the microfinance industry - as a summary performance metric and find that several governance metrics are related to microfinance performance. Specifically, we find that CEO/Chair duality has a negative relation to rating scores, whereas the number of international board directors, the presence of internal auditors and the level of competition intensity are positively associated with rating scores. These findings should prove useful in an industry in which there is no established 'best set-up' for governance mechanisms.
The Oxford Handbook of Economic and Institutional Transparency, 2014
Corporate Governance: An International Review, 2018
Entrepreneurship Theory and Practice, 2013
This study examines the effect of foreign (Anglo-American) board membership on corporate performa... more This study examines the effect of foreign (Anglo-American) board membership on corporate performance measured in terms of firm value (Tobin’s Q). On a basis of firms with headquarters in Norway or Sweden the study indicates a significantly higher value for firms that have outsider Anglo-American board member(s), after a variety of firm-specific and corporate governance related factors have been controlled
This paper analyzes the determinants of female board representation in the listed non-financial f... more This paper analyzes the determinants of female board representation in the listed non-financial firms in four Nordic countries over the 2001-2007. We explore the institutional, industry and firm specific factors that lead to stronger female representation on the corporate boards. In particular, we explore how the distribution of the directors along other demographic dimensions (age, nationality, organizational role) influences the
SSRN Electronic Journal, 2000
SSRN Electronic Journal, 2000
SSRN Electronic Journal, 2000
ABSTRACT Scholars have previously investigated country and organizational-level factors associate... more ABSTRACT Scholars have previously investigated country and organizational-level factors associated with the incidence of female directors on boards. These studies, however, cannot explain why, in countries with strong gender equality and pressure for female directorships, firms are still hesitant to promote new women to their boards. To address this issue we – in this study – introduce the cognitive and affective processes related to directors’ identification with the traditional corporate elite as an explanation for the slow organizational response to pressure for gender diversity on boards. We bridge the social identity and critical mass theory to further show how these responses may vary with the current composition of the board. Viewing the board as a locus for the maintenance of the positive distinctiveness of the established corporate elite, we conjecture that new female appointments will not only depend on the current share of women on board but also on the current (minority) share of board positions held by male directors who are not prototypical of the established elite. We also uncover how this relationship is moderated by the share of institutional investors’ ownership. We test and support these propositions on a sample of 387 publicly traded Nordic corporations during 2001-2008.
Corporate Governance: An International Review, 2014
ABSTRACT Research Question/IssueCorporate boards often change their working language when they ac... more ABSTRACT Research Question/IssueCorporate boards often change their working language when they acquire foreign members who are not proficient in the language of the firm's home country. Consequently, boards “talk” in one language but “think” in another. The purpose of the present study is to explore and explain how language diversity influences the work processes of corporate boards.Research Findings/InsightsOn the basis of a multiple case study of nine multinational corporations (MNCs) from four Nordic countries, we discovered evidence of impoverished and silenced discussions in board meetings in those case companies that were unprepared to switch to English as the new working language of the board. Some board members found it difficult to contribute to board meetings, articulate disagreement, and felt socially excluded from the board, which added to the “costs” of language diversity in these firms. In contrast, such effects on work processes were not revealed in the well-prepared companies. However, the presence of employee representatives on the boards of both the well-prepared and unprepared case companies made it more difficult to conduct work processes in English because these members often lacked sufficient language proficiency. Thus, our findings suggest that the board co-determination act of the Nordic corporate governance model may be associated with the hidden costs of using a non-native language.Theoretical/Academic ImplicationsOur study makes four contributions to research on board diversity. Firstly, it highlights the “silencing effect” of language diversity on board processes. Secondly, it emphasizes the linkage between language diversity and board processes. Thirdly, it provides additional evidence that language is a distinct dimension of diversity. Fourthly, it discovers the issue of languages in board work as a new research topic that is worthy of scholarly attention.Practitioner/Policy ImplicationsFirms need to be aware of and anticipate the potential effects of language diversity on the work processes of their boards in order to ensure that “the voice of diversity” is heard. The board itself as well as the rest of the organization can take preparatory measures such as producing all board material in the new working language, providing translation services, selecting board members with the required language proficiency, and adopting the same working language in the corporate board and the executive management team. Although these measures can be implemented gradually or at a faster pace, they need to be in place before foreign members join the board. We would argue that consistent use of one and the same language in the corporate board and the executive management team supports transparency and good corporate governance practices. In our opinion, reaping the benefits of board diversity is the particular responsibility of the chairperson. Even though English is generally well understood in the Nordic countries, chairpersons should also consider the possible negative effects associated with the use of a board language that is non-native to most of its members.
SSRN Electronic Journal, 2000
ABSTRACT Multinational corporations internationalize their corporate boardrooms in order to capit... more ABSTRACT Multinational corporations internationalize their corporate boardrooms in order to capitalize on their commercial and financial internationalization. Board internationalization provides access to specialized knowledge and skills, broadens social networks and ensures greater transparency of strategic decision-making. The entry of a foreign board member is often coupled with a change in the working language of the board. The purpose of the present study is to explore and explain how increased language diversity influences decision-making and work processes of corporate boards. We draw on previous research on board internationalization, diversity and language in multinational corporations. Based on a multiple case study of nine multinational corporations from four Nordic countries, we find evidence of impoverished and silenced discussions in board meetings in those case companies that were unprepared to switch to English as the new working language of the board. Some board members found it difficult to contribute to board meetings, articulate disagreement and felt socially excluded from the board. Such effects on decision-making and work processes were not found in the well-prepared companies. The study adds to the understanding of different modes to internationalize the board as a response to different forms of internationalization of the firm.
SSRN Electronic Journal, 2000
ABSTRACT Despite the global reach of their commercial activities, many multinational firms have p... more ABSTRACT Despite the global reach of their commercial activities, many multinational firms have proved slow in internationalizing their boards of directors. Based on a panel study of the internationalization of the boards of 347 non-financial firms from the Nordic countries, we find a higher fraction of international board membership in firms with more foreign sales, in firms with more foreign ownership and in firms whose shares are traded on foreign (mostly European) stock exchanges. Moreover, we find international directors and national directors with international experience complementary. The first-mentioned group is found to serve a monitoring role, related to financial internationalization of the firm, whereas the latter category fills an advisory role related to commercial internationalization. Hence, different types of firm internationalization – commercial versus financial – might call for different types of board internationalization.
International Review of Financial Analysis, 2014
ABSTRACT The global microfinance industry has experienced high growth rates over the past decades... more ABSTRACT The global microfinance industry has experienced high growth rates over the past decades, and the World Bank foresees a future market with billions of customers. However, the industry's continued growth is contingent on its ability to create a governance structure that supports microfinance institutions' long-term performance. Because microfinance institutions' performance is multidimensional and difficult to measure, prior research has not been successful in establishing consistent associations between governance structures and microfinance institutions' performance. We apply microfinance rating scores - a unique innovation of the microfinance industry - as a summary performance metric and find that several governance metrics are related to microfinance performance. Specifically, we find that CEO/Chair duality has a negative relation to rating scores, whereas the number of international board directors, the presence of internal auditors and the level of competition intensity are positively associated with rating scores. These findings should prove useful in an industry in which there is no established 'best set-up' for governance mechanisms.
The Oxford Handbook of Economic and Institutional Transparency, 2014