1,721,018 research outputs found
Invisible Ties: Implicit Contracting and Its Implications for the Agency Relationship in Corporate Governance Research
Full text linkResearch that applies agency theory to boards of directors suffers from being quite narrow as it does not recognize the true legal relationships between directors, managers and shareholders. Instead, the board of directors is best conceptualized as the principal, management as agents and stockholders’ relationships as a mix of legal and implicit contracts. I propose a recast agency relationship and develop a contingency approach that proposes (1) how a corporation’s goals vary with a board’s implicit contracting and (2) a reconceptualization of the agency problem facing boards
The importance of group-fit in new director selection
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Director selection is an important yet under-researched topic. The purpose of this paper is to contribute to extant literature by gaining a greater understanding into how and why new board members are recruited. \ud
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This exploratory study uses in-depth interviews with Australian non-executive directors to identify what selection criteria are deemed most important when selecting new director candidates and how selection practices vary between organisations. \ud
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The findings indicate that appointments to the board are based on two key attributes: first, the candidates’ ability to contribute complementary skills and second, the candidates’ ability to work well with the existing board. Despite commonality in these broad criteria, board selection approaches vary considerably between organisations. As a result, some boards do not adequately assess both criteria when appointing a new director hence increasing the chance of a mis-fit between the position and the appointed director. \ud
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The study highlights the importance of both individual technical capabilities and social compatibility in director selections. The authors introduce a new perspective through which future research may consider director selection: fit. \ud
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The in-depth analysis of the director selection process highlights some less obvious and more nuanced issues surrounding directors’ appointment to the board. Recurrent patterns indicate the need for both technical and social considerations. Hence the study is a first step in synthesising the current literature and illustrates the need for a multi-theoretical approach in future director selection research
Habitual accountability routines in the boardroom: How boards balance control and collaboration
Full text linkCorporate accountability is a complex chain of reporting that reaches from external stakeholders into the organization’s management structure. The transition from external to internal accountability mechanisms primarily occurs at the board of directors. Yet outside of incentive mechanisms, we know surprisingly little about how internal actors (management) are held to account by the representatives of external shareholders (the board). This paper explores the process of accountability at this transition point by documenting the routines used by boards to hold the firm’s management to account. In so doing we develop our understanding of the important transition between internal and external firm accountability
Inside the boardroom: Exploring board member interactions
No full textThis study aims to open up the black box of the boardroom by directly observing directors'
interactions during meetings to better understand board processes.
We analyze videotaped observations of board meetings at two
Australian companies to develop insights into what directors do in meetings and how they participate
in decision-making processes. The direct observations are triangulated with semi-structured
interviews, mini-surveys and document reviews.
Our analyses lead to two key findings: while board meetings appear similar at a surface
level, boardroom interactions vary significantly at a deeper level (i.e. board members participate
differently during different stages of discussions), and factors at multiple levels of analysis explain
differences in interaction patterns, revealing the complex and nested nature of boardroom discussions.
By documenting significant intra- and inter-board meeting differences, our study challenges the widespread notion of board meetings as rather homogeneous and monolithic,
points towards agenda items as a new unit of analysis and highlights the need for more multi-level
analyses in a board setting.
While policymakers have been largely occupied with the right board
composition, our findings suggest that decision outcomes or roles execution could be potentially
affected by interactions at a board level. Differences in board meeting styles might explain prior
ambiguous board structure-performance results, enhancing the need for greater normative
consideration of how boards do their work.
This study complements existing research on boardroom dynamics and
provides a systematic account of director interactions during board meetings
An observational analysis of the impact of board dynamics and directors' participation on perceived board effectiveness
Full text linkThis study addresses calls for closer examination of board dynamics by offering an inside
view of director interactions. Video observations of three board meetings at each of two
Australian corporations matched with director interviews and secondary data reveal
distinct patterns of director interactions, their sources of variation and their impact on
perceived board effectiveness. The data reveal that director interactions are multidimensional
and dynamic: while group interactions across agenda items are similar, with a few
directors leading the discussion, the contributing directors change across items. Moreover,
directors??? inclusiveness and evenness of participation are associated with higher
perceptions of board effectiveness. Lastly, the study found that director interactions
change with the nature of the items, board climate and board meeting arrangements. The
study contributes to the literature by moving beyond the individual-level analysis of
directors??? skills or independence, and offering a detailed view of how the joint group and
individual dimensions of board dynamics affect board functioning
Afraid to Monitor? How Board Climate and Shapes Outside Directors’ Monitoring of Executives
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Boards that work: A new guide for directors
No full textDespite an abundance of information on the legal requirements of directors, there is little practical advice on how to develop a truly effective board. Added to this is today's growing expectation that boards should monitor management as well as take full responsibility for the performance of their organisations. \ud
Boards That Work addresses this deficiency by showing boards how to develop their own corporate governance charter to document best practice governance policies within the Australian legal environment. \ud
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Using the findings from contemporary global research, Geoffrey Kiel and Gavin Nicholson bring together the experiences of many boards and directors to present a model of policy documents and processes. \ud
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Checklists, diagrams, figures and practical examples are extensively used to clearly illustrate key concepts, and a complete sample charter is presented to assist all types of boards in developing their own governance policies and procedures
THE INFLUENCE OF BOARD CHAIRS ON DIRECTOR ENGAGEMENT: A CASE BASED EXPLORATION OF BOARDROOM DECISION-MAKING
Full text linkResearch question/issue: This study seeks to better understand how board chairs, as leaders and equals, shape the context for other directors to engage in their governance roles.
Research findings/insights: Using a combination of video‐taped board meetings and semi‐structured interviews with directors at three corporations, we found a generalized and negative association between chair involvement and directors' engagement during board meetings.
Theoretical/academic implications: Our empirical results suggest that the chair's role can be viewed as a paradox, requiring both (i) strong leadership to counter managerial power, and (ii) a more subtle orientation as peer to fellow directors that enables other board members to contribute to boardroom decision‐making. Moreover, our study revealed the transitory nature of both chair contributions and directors' engagement during meetings, highlighting the potential and need for further unpacking of the temporal dimensions of boardroom decision‐making processes. Practitioner/policy implications: Our analysis suggests a revision of the implicit prescription in the literature for board chairs to be active leaders who lead from the front. Given that chair involvement appears to reduce director engagement during meetings, our research hints at the need for a more supportive role of the chair during boardroom decision‐making that is in line with non‐traditional leadership model
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