Boardroom Politics: Implications for Human Resources Management

Abstract

There is a tradition in modern business scholarship to see the corporation as a political actor. S.P. Waring argues that the modern business corporation is a polity, Herbert Kaufman views political theorists and management theorists as merely different species of the same genus, while Peter Drucker postulates that even the most private of private enterprises is an organ of society and serves a social function. Such views justify corporations entering into more proactive relationships with organs of the society and with the agencies of governmental agencies regulating the economy. But politics operate within the organization as well. Nowhere are the political battle lines more sharply drawn than in the boardrooms of our modern corporations. Here boardroom politics find expression in the language of corporate governance. The battlefields include questions of executive compensation, conflicts of interest, absence of transparency, ineptitude and corruption. Many boards are inadequate for the tasks with which they are charged. The skirmishes that take place in the boardroom find debilitating replication in the rest of the organization, sometimes with multiplied effect. The capacity of the human resources manager to get the most from the human resources in her organization is seriously compromised by a dysfunctional board. The solution may mean that human resources mangers should now consider among their clients, not just the employees of the organization, but the board as well. To meet the challenges, human resources managers will have to consider training down and also up to the very top of the organizational hierarchy.