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Updated 10:00 AM September 21, 2007
 

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  Research
Looking for a corporate board seat? Try a little flattery

When it comes to getting a seat on a corporate board, flattery will get you everywhere, says a University business professor.

Research by James Westphal, professor of strategy at the Stephen M. Ross School of Business, and colleague Ithai Stern of Northwestern University finds that top managers who engage in ingratiatory behavior toward their CEOs by using flattery, agreeing with their opinions and providing favors are more likely to receive board appointments at other firms where their CEOs serve as directors and at boards to which the CEO indirectly is connected in the board interlock network.

This especially is true for women and minorities, and for those who lack elite social and educational credentials, they say.

"Interpersonal influence behavior directed at individuals who control access to board positions provides an alternative pathway to the boardroom for corporate managers," Westphal says. "Ingratiation can substitute to some extent for the social capital provided by an upper-class background, attendance at elite educational institutions or membership in prestigious social clubs. Displays of ingratiation toward the CEO may reduce uncertainty about social fit on boards of managers who lack elite backgrounds or demographic majority status."

On the other hand, once named to a company board, women and minorities are rewarded less than their white male counterparts for their ingratiatory behavior, receiving fewer recommendations to serve on other corporate boards and getting less credit for positive behaviors, such as providing advice or sharing information. Moreover, they are punished more than white men for monitoring senior management and offering constructive criticism.

Two separate studies by Westphal and Stern — one on the use of ingratiatory behavior to gain a board seat in the first place and the other on its use to ensure success once appointed to a board — both revealed a subtle form of social discrimination in the corporate elite.

"Although ethnic minorities and women may not come up against a 'glass ceiling' that prevents them from assuming central positions in the board interlock network, they also do not receive equal treatment in the director selection process," Westphal says.

Westphal and Stern say it may be necessary to require boards to select more non-managers for outside director positions and to rely less on CEO-directors for nominations.

"The reluctance of outside director to exercise control over management decision-making and behavior has been implicated in a variety of negative organizational outcomes, including strategic inertia in the face of declining performance, ill-advised corporate acquisitions, accounting scandals and white-collar crime," Westphal says.

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