Board processes revisited: an exploration of the relationship between board processes, board role performance and board effectiveness in comparable European listed companies

Abstract

Purpose This study aims to analyse the relationships between board processes, board role performance and board effectiveness for a cross-country (UK and Romania) sample of comparable European listed companies. Design/methodology/approach The research design is quantitative in nature and based on the survey method, a self-administered questionnaire which was send to 342 chairmen of selected Romanian and British listed companies and which contains validated statements measured through a seven-point Likert-type scale and grouped in validated constructs. Findings This study found further empirical evidence that board processes are stronger determinants of board effectiveness than board characteristics and that board roles mediate the relationship between board processes and board effectiveness. It further confirmed the relevance of the three board processes mentioned by Forbes and Milliken (1999) in their seminal work on board decision-making. Research limitations/implications The main limitation of this study is the relatively small number of responses (55), which indicates a reduced reliability and generalizability of the results. However, several steps were taken to assure the homogeneity of the sample, starting with a unique data set of firms of comparable size and industry representation. Practical implications This study is useful to board directors and chairmen of listed companies, as it can help them to better understand and manage board behaviour. Originality/value This study contributes to the limited body of research that investigates specific board process constructs derived from the small team literature and their effect on board effectiveness.