Management Faculty Publications
Document Type
Article
Publication Date
5-24-2026
Abstract
Research Question/Issue
This study explores the moderating effects of board network centrality on the relationship between CEO overconfidence and acquisition intensity.
Research Findings/Insights
Using a panel of S&P 1500 firms from 2002 to 2018, we find that CEO overconfidence is positively associated with acquisition intensity. This relationship is weakened when boards occupy more central positions in the interlocking director network. Furthermore, this mitigating effect is stronger when (1) connected firms exhibit greater variability in acquisition intensity, (2) directors maintain stronger internal social connections, and (3) boards have greater female representation.
Theoretical/Academic Implications
We conceptualize board network centrality as enhancing information access by exposing directors to non-redundant external experiences. However, access alone does not ensure effective oversight. The governance effect of centrality depends on internal processing conditions that facilitate information sharing, elaboration, and critical evaluation. By distinguishing information access from information-processing capacity, we provide a more precise explanation of how board networks shape responses to CEO overconfidence.
Practitioner/Policy Implications
Our findings indicate that effective oversight by the board of directors over overconfident CEOs requires both access to diverse external information and strong internal deliberation processes. Firms may benefit from constructing boards that combine strategic network positions with internal conditions that facilitate thorough evaluation of strategic decisions.
Recommended Citation
Xu, J., Li, L., Liu, H., Hou, W. and Zhu, Q., 2026. Mitigating the Effects of CEO Overconfidence: A Group Information Processing Perspective. Corporate Governance: An International Review. https://doi.org/10.1111/corg.70044
Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.
Publication Title
Corporate Governance: An International Review
DOI
10.1111/corg.70044
Comments
© 2026 The Author(s). Corporate Governance: An International Review published by John Wiley & Sons Ltd.
This is an open access article under the terms of the Creative Commons Attribution License, which permits use, distribution and reproduction in any medium, provided the original work is properly cited.