Board Independence in Crisis: The Role of CEOs with International Education

Drawing on upper echelon theory and agency theory, this study explores the effect of a CEO’s foreign educational experience on board independence during a crisis in an emerging market firm. Additionally, the negative moderating effect of CEO age and the positive moderating effect of board size on this relationship are examined. We purposely selected the Asian Financial Crisis period as our sampling window. We gathered demographic data on CEOs, along with financial and general information on Korean listed firms from 1998 to 2000. We used Generalized Least Squares regression with random effects as our estimation method. Our results indicate that a CEO’s foreign education experience has a positive and significant impact on board independence. Additionally, we found that CEO age significantly weakens this relationship, while board size positively moderates the relationship, though only partially. This study makes significant contributions to the literature on the determinants of board independence by highlighting the impact of a CEO’s foreign educational experience during a crisis in an emerging market firm. Moreover, we emphasize that the imprinting effect of a CEO’s foreign undergraduate education may diminish as the CEO ages, due to interactions with domestic business environments and a decline in cognitive capability