Effective board behavior in The Netherlands

Abstract

Corporate governance regulations across the globe increasingly push for a model in which top management is supervised by an independent, vigilant and skilled board of directors. Academic research, however, produces ambiguous results as to the direct effects of such board characteristics on firm performance. We therefore analyze the relationships between board attributes, board working processes and board role performance through intermediate relationships. Several hypotheses are derived and tested by analyzing data obtained from a survey at the board level in The Netherlands. Our results partly confirm the relevance of the model of board processes related to board role performance, as suggested by [Forbes, D.P., and Milliken, F.J. (1999) Cognition and corporate governance: Understanding boards of directors as strategic decision-making groups. Academy of Management Review, 24, 489–505]. Particularly, this study exemplifies the relevance of different board processes for explaining board role performance.