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Abstract The status difference of directors is the key factor affecting the efficiency of team decision making. According to relational contract theory. This study investigates the impact of status difference of directors on firm’s financial performance through the non-linear mediating effect of board meeting frequency. By using the sample of private listed companies in Shenzhen and Shanghai between 2010 and 2012, it is found that there is a negative exponential relationship between the clarity of board status difference of directors and board meeting frequency. In addition, the mediating effect of board meeting frequency is significant. Theoretically, this study further opens the black box of board interactive dynamism. Practically, the tacit order forming from trust and deference is effective in coordinating board interactive processes particularly in Chinese private listed firms.
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Received: 20 August 2017
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