Scandinavian Working Papers in Economics

Working Paper Series,
Research Institute of Industrial Economics

No 951: On the Internationalization of Corporate Boards

Lars Oxelheim (), Aleksandra Gregori (), Trond Randøy () and Steen Thomsen ()
Additional contact information
Lars Oxelheim: Research Institute of Industrial Economics (IFN), Postal: P.O. Box 55665, SE-102 15 Stockholm, Sweden
Aleksandra Gregori: Center for Corporate Governance, Postal: Department for International Economics and Management, Copenhagen Business School
Trond Randøy: University of Agder,, Postal: School of Management, Kristiansand
Steen Thomsen: Center for Corporate Governance, Postal: Department for International Economics and Management, Copenhagen Business School

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.

Keywords: Internationalization; International directors; International board experience; Board composition; Nomination committee; Corporate governance

JEL-codes: F23; G30; G34; L22; M16

46 pages, January 22, 2013

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