® Academy of Management Journal 1999, Vol. 42, No. 1, 7-24. COLLABORATION IN THE BOARDROOM: BEHAVIORAL AND PERFORMANCE CONSEQUENCES OF CEO- BOARD SOCIAL TIES JAMES D. WESTPHAL University of Texas at Austin Empirical research has typically rested on the assumption that board independence from management enhances board effectiveness in administering firms. The present study shows how and when a lack of social independence can increase board involve- ment and firm performance by raising the frequency of advice and counsel interactions between CEOs and outside directors. Hypotheses were tested with original survey data from 243 GEOs and 564 outside directors on behavioral processes and dynamics in management-board relationships. In recent years, corporate stakeholders have ex- pressed increased concern about the inflnence of boards of directors over corporate affairs. Large in- stitutional investors, for instance, have strongly criticized the relationships that are thonght to exist between top managers and outside directors in many corporations. In particular, advocates of board reform have commonly suggested that boards lack independence from top management and tbat tbeir dependence fosters board passivity in the decision- making process. This perspective is reflected in the popular media, where it is frequently assumed that social ties between top managers and outside direc- tors (e.g., friendships) diminish board effectiveness; such relationships are often described in pejorative terms as "chummy" or even "collusive" [Wall Street fournal, 1993: Bl; 1995, 1996). Academic research on boards has also devoted increased attention to how CEO-board relation- ships influence board effectiveness. Empirical re- searchers have often assumed that a lack of social independence from management can compromise This study was generously funded by the State Farm Gompanies Foundation. I am also indebted to Edward Zajac for providing financial support and assistance on this project. Thanks also to Gautam Ahuja, Mason Gar- penter, Jennifer Ghatman, Alison Davis-Blake, James Fredrickson, Ranjay Gulati, Paul Hirsch, Robert Hoskis- son, Herminia Ibarra, Fiona Lee, Priti Shah, Mark Shan- ley, Ann Tenbrunsel, Brian Uzzi, and seminar partici- pants at the Massachusetts Institute of Technology, the University of Michigan, the University of North Garolina at Ghapel Hill, the University of Notre Dame, the Univer- sity of Texas at Austin, the University of Washington, and Washington University for their helpful comments on an earlier version of this article. Mike Frandsen and Dennis Zhang provided valuable assistance in data col- lection. board effectiveness in the strategy-making process. It has been proposed, for instance, that CEOs keep their boards largely passive and uninvolved in stra- tegic decision making through cooptation, or pack- ing boards with their supporters (e.g., Herman, 1981; Mace, 1986; Wade, O'Reilly, & Chandratat, 1990). Outside directors are thought to engage in less vigilant monitoring and to exert less control over top managers with whom they have close per- sonal ties (e.g., Fredrickson, Hambrick, & Baumrin, 1988; Spencer, 1983; Walsh & Seward, 1990). The present study departs from this dominant view of how a lack of board social independence from management affects a board's contribution to strategic decision making. The perspective devel- oped in this study first builds on prior literature in which a board's role in an organization has been broadly conceived as including two different forms of administration: the provision of advice and counsel and the exercise of oversight and control (cf. Pfeffer & Salancik, 1978). I then develop a the- oretical framework that draws from the literatures on advice seeking and social ties in organizations to consider how social factors such as trust and per- ceived social, obligations in CEO-board relationships may promote rather than hinder boaid involvement and effectiveness in administering a firm. In particu- lar, although existing perspectives tend to suggest that a lack of independence should reduce a board's involvement and effectiveness in firm administra- tion, this study examines how social ties between top managers and outside directors may facilitate board involvement by encouraging the provision of advice and counsel in the strategy-making process. The theoretical framework developed in this study also addresses the issue of when this alterna- tive model of board social independence and in- volvement is more, or less applicable than the more