Department Seminar Series - May 2017 Dr Salih Zeki Ozdemir
Board Structure, Information Asymmetry, and Adoption of Information Systems
Dr Salih Zeki Ozdemir
UNSW Business School
Abstract: Corporate governance literature emphasizes the wealth-protection and wealth-creation roles of the boards, the decisions they make, and the relatively more activism of independent directors. Agency and advising theories both argue that execution of these two roles primarily depend on directors’ ability to have sound knowledge and information about their firms in addition to the general skills and expertise they possess. We review two types of information asymmetry: agency problem caused information hiding by CEOs, and organization silence caused bottom level managers reluctant to transmit information to upper levels. However, how directors actively seek solution to resolve the information asymmetry and then execute their roles is under investigated. We claim that information technology investments, and especially Enterprise Information systems (EIS), are possible solutions to information asymmetry problem and hypothesize that firms with independent boards and strategy committees install higher level decision making support modules. Our analysis of a sample of Chinese public firm’s EIS investments confirms our hypothesis. Furthermore, in order to better understand the mechanisms behind our board structure and EIS investment hypothesis, we adopt microfoundations approach and perform further investigation. We conduct 23 semi-structured interviews with CEOs, top managers, and directors. Our interviews highlight three different interpretations of information asymmetry as concerns for i) availability of information, ii) managers’ control over information dissemination, and iii) cost of acquiring relevant information. All these three interpretations encourage the independent directors and board with strategy committees to suggest and support the adoption of EIS systems. Taken all together, results of the microfoundations approach analysis support and elucidate our hypothesis.
Bio: Dr. Salih Zeki Ozdemir is a Senior Lecturer of Strategic Management at the School of Management and an AGSM Fellow in UNSW Business School. He received his PhD from University of Chicago GSB (Booth School of Business) in Organizations and Markets with support areas in Economics and Econometrics. Salih is specifically interested in investigating innovation, entrepreneurship, internationalization, corporate governance, and emergence of new organizational forms through the lenses of sociology and social network theory. His publications appear in journals such as Organization Science, Research Policy, Industrial and Corporate Change, Corporate Governance: An International Review, and Entrepreneurship Theory & Practice.
Salih’s research on social structures and innovation performance received 2007 Academy of Management Best Paper Award from Technology and Innovation Management Division. He also received 2011 Best Paper Award from Strategy Stream of ANZAM for his research on how entrepreneurs can design better social networks and 2014 Corporate Governance: An International Review Best Paper Published award for his research on board composition, governance bundles, and national institutional structures.
Title: Board Structure, Information Asymmetry, and Adoption of Information Systems
Presenter: Dr. Salih Zeki Ozdemir, UNSW Business School
Time: Tuesday 30 May 2017, 4-5pm
Venue: Seminar Room 523, E4A Building, Macquarie University