A burning question for many directors is encapsulated in the title of this muse. In recent years, the business media has published many stories about boards; questionable board practices; assertive CEOs that 'take over': and, missteps and failures that seem to emanate from the boardroom. Some of these stories are justified, whereas others lack substance. Alongside, the academic community has investigated the question, although typically from the perspective of a distant observer using public data or, at best, interview comments. To date, reliable knowledge about the role of the board in influencing business performance has remained elusive.
I have spent several years investigating this question as well, from several different angles to try to discover whether boards are simply disempowered groups that meet to rubber stamp decisions, or whether influence (including over firm performance) is possible. The quest has included longitudinal observations of board meetings; interviews with chairmen, directors and chief executives; and, the analysis of very large piles (mountains, seemingly!) of board papers, minutes, reports and observation notes. Useful insights have been gleaned from informal discussions with directors have provided useful insights as well.
While no definitive answers to the burning question have emerged from the analysis yet (in any predictable sense anyway), a theme has become become apparent:
Two papers, with similar sounding titles, summarise the findings from my research efforts to date. The first, entitled How boards influence business performance: Developing an explanation was recently published in Leadership and Organization Development Journal (Volume 37, Issue 8), an academic journal. The second, entitled Board influence from and beyond the boardroom: A provisional explanation, was warmly received at the European Institute of Advanced Management Studies' 13th Annual Workshop on Corporate Governance in Milan in late October. Click here for a copy of the EIASM paper.
If you would like to know more, please get in touch. I would be delighted to discuss the findings and the implications for practice with any board or larger group intent on realising and sustaining high levels of company performance.
Thoughts on corporate purpose, strategy and governance; our place in the world; and, other things that catch my attention.