Skip to Main Content
HBS Home
  • About
  • Academic Programs
  • Alumni
  • Faculty & Research
  • Baker Library
  • Giving
  • Harvard Business Review
  • Initiatives
  • News
  • Recruit
  • Map / Directions
Faculty & Research
  • Faculty
  • Research
  • Featured Topics
  • Academic Units
  • …→
  • Harvard Business School→
  • Faculty & Research→
Publications
Publications
  • April–May 2012
  • Article
  • Journal of Business Finance & Accounting

Resources or Power? Implications of Social Networks on Compensation and Firm Performance

By: Joanne Horton, Yuval Millo and George Serafeim
  • Format:Print
ShareBar

Abstract

Using a sample of 4,278 listed UK firms, we construct a social network of directorship-interlocks that comprises 31,495 directors. We use social capital theory and techniques developed in social network analysis to measure a director's connectedness and investigate whether this connectedness is associated with their compensation level and their firm's overall performance. We find connectedness is positively associated with compensation and with the firm's future performance. The results do not support the view that executive and outside directors use their connections to rent extract. Rather the company compensates these individuals for the resources these better connections provide to the firm.

Keywords

Power and Influence; Social and Collaborative Networks; Compensation and Benefits; Performance; Relationships; Resource Allocation; United Kingdom

Citation

Horton, Joanne, Yuval Millo, and George Serafeim. "Resources or Power? Implications of Social Networks on Compensation and Firm Performance." Journal of Business Finance & Accounting 39, nos. 3-4 (April–May 2012): 399–426.
  • SSRN
  • Find it at Harvard

About The Author

George Serafeim

Accounting and Management
→More Publications

More from the Authors

    • 2021
    • Faculty Research

    Accounting for Product Impact in the Telecommunications Industry

    By: George Serafeim and Katie Trinh
    • 2021
    • Faculty Research

    Accounting for Product Impact in the Water Utilities Industry

    By: George Serafeim and Katie Trinh
    • March 2021
    • Faculty Research

    Facebook’s Libra (B): The Privatization of Money?

    By: Marco Di Maggio, Ethan Rouen, George Serafeim and Amy Klopfenstein
More from the Authors
  • Accounting for Product Impact in the Telecommunications Industry By: George Serafeim and Katie Trinh
  • Accounting for Product Impact in the Water Utilities Industry By: George Serafeim and Katie Trinh
  • Facebook’s Libra (B): The Privatization of Money? By: Marco Di Maggio, Ethan Rouen, George Serafeim and Amy Klopfenstein
ǁ
Campus Map
Harvard Business School
Soldiers Field
Boston, MA 02163
→Map & Directions
→More Contact Information
  • Make a Gift
  • Site Map
  • Jobs
  • Harvard University
  • Trademarks
  • Policies
  • Digital Accessibility
Copyright © President & Fellows of Harvard College