When a company has a top management team with an ownership stake, and different people serving as chief executive officer and chairman of the board, then structural diversity on the management team leads to effective use of corporate venture capital – to a point.

To College of Business assistant professor Sam Cho, that was the most important finding of research reported in his recent paper, “Mixed Blessings: How Top Management Team Heterogeneity and Governance Structure Influence the use of Corporate Venture Capital by Post-IPO Firms.”

Cho was one of four authors. In his second year at Oregon State, he began his research as a first-year Ph.D. student at Washington State.

The Journal of Business Research has accepted the paper for publication. The JBR as a rating of 3 – “publishes original and well-executed research” – in the Association of Business Schools’ Academic Journal Guide.

Cho’s work involved collecting data on 172 high-technology firms that went through an initial public offering between 2001 and 2005. As the paper notes, the use of corporate venture capital – investing in other companies in an attempt to meet strategic objectives – is inherently risky and can stretch top management beyond its comfort zone. Managers tend to weigh the potential gains and losses of exploring new technologies, versus maintaining the status quo, in terms of risk to their own employment and pay.

Top management may be inclined to avoid taking chances, even though delay in seeking out emerging technologies can adversely affect long-term profitability and thus displease stakeholders.

Cho’s research shows that structural diversity on top management teams – members coming from different professional backgrounds – leads to effective use of corporate venture capital. But in terms of team heterogeneity, there can be too much of a good thing. When a team is excessively diverse, venture capital effectiveness falls off amid team conflict; thus the data charts out in an inverted U shape, with effectiveness ultimately dipping downward as diversity increases.

And Cho points out that having a governance structure of non-duality – different people serving as chairman and CEO – and having a top management team with an ownership stake are keys to benefiting from team heterogeneity.

In other CEO-related work, Cho is one of five authors – two of the others are his COB colleagues Jonathan Arthurs and Jeff Barden – of a paper accepted for publication by the Strategic Management Journal: “Performance Deviation and Acquisition Premiums: The Impact of CEO Celebrity on Managerial Risk-Taking.”

The study finds that “celebrity CEOs tend to pay smaller premiums for target firms, but these tendencies change when prior firm performance deviates from the industry average returns, thereby leading these CEOs to pay higher premiums.”

The Strategic Management Journal owns the highest ABS ranking, a 4*, making it a “journal of distinction” that publishes the “most original and best executed research.”