Seeing the big picture: Board Chair's network in corporate performance explaining

This study investigates how social networks influence the interpretation of company performance. We examine how a firm’s performance is affected by the board chair’s network connections. We quantify external attributions through textual analysis of management earnings forecasts issued by Chinese A-share listed companies from 2008--2017. The results show that higher network centrality of the board chair significantly reduces a firm’s tendency to attribute performance to external factors. In addition, the board chair’s network helps mitigate self-serving attribution bias. This effect operates through three mechanisms. First, obtaining more information from the network leads to a deeper understanding of the business environment. Second, the board chair’s network connections represent stronger monitoring effectiveness. Third, the board chair’s social network helps strengthen the company’s strategic focus and facilitates long-term investment. Overall, the board chair’s connections mitigate self-serving attribution bias and promote to a broader perspective when explaining performance. This study enriches the literature on executive networks, disclosure strategies, and behavioral biases in corporate decision-making, providing insights to understand corporate behavior.