Transparency differences at the top of the organization: Market-pull versus strategic hoarding forces

This chapter examines the opposing forces that induce or impede firms to become transparent in terms of their board of directors' (BoD) and top management teams' (TMT) demographic characteristics, education and experiences. Extant literature on governance transparency often draws on a "market-pull perspective" to emphasize the market-level motives that drive organizations toward rising levels of governance transparency. In this chapter we introduce the "strategic hoarding perspective", which emphasizes the human capital attrition factors that discourage firms to openly report information about their BoD and TMT composition. Our theory and data from 208 large listed firms in Switzerland, the United Kingdom and the Netherlands for the years 2005 and 2009 suggest that organizations' relative transparency preferences in terms of BoD and TMT characteristics can better be explained based on a combination of market-pull and strategic hoarding perspectives. Implications and directions for further research are discussed.