Effects of Firm Complexity on the Adaption of Board Structure: Evidence from U.S. Electric Utilities following Deregulation

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Conference Proceeding

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This paper reexamines the adaptation of board structure in U.S. electric utilities following deregulation. Post-deregulation changes in board size and the number of outside directors are positively and statistically-significantly associated with changes in the complexity of a firm’s operations. Electric utilities that do not become more complex after deregulation reduce their board size significantly, employing fewer outside and inside directors. In contrast, board size is unchanged for firms that become more complex; these utilities employ more outsiders but fewer inside directors after deregulation. We conclude that electric utility boards adapt to deregulation by accommodating for changes in firm complexity in addition to other effects induced by deregulation.


Presented at the Business Research Consortium Conference of Western New York, in Oswego, New York, April 2012. This paper was also included in the conference proceedings: http://www.businessresearchconsortium.org/archives.cfm?template=9

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