The strategic value of CEO external directorate networks : Implications for CEO compensation

Research output: Journal Publications and Reviews (RGC: 21, 22, 62)21_Publication in refereed journal

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Original languageEnglish
Pages (from-to)889-898
Journal / PublicationStrategic Management Journal
Issue number9
Publication statusPublished - Sep 2001
Externally publishedYes


This study examines the relationship between CEO external directorate networks and CEO compensation. Drawing on previous research showing a link between executives' external networks, firm strategy, and performance, the study argues that executive external networks are strategically valuable to firms; thus, they should be reflected in executive compensation. The study further examines whether firm diversification, with its elevated demand for strategic resources, moderates the relationship between CEO external directorate networks and pay. Hypotheses are tested using a sample of 460 Fortune 1000 firms. Analyses reveal that the rewards to CEO external directorate networks are contingent upon the firm's level of diversification. Implications for future research and practice are discussed. Copyright © 2001 John Wiley & Sons, Ltd.

Research Area(s)

  • CEO compensation, Executive networks, Social capital, Strategic leadership