Board Involvement In Strategy Research Articles

Opening the black box: Unpacking board involvement in innovation

Corporate governance research suggests that boards of directors play key roles in governing company strategy. Although qualitative research has examined board–management relationships to describe board involvement in strategy, we lack detailed insights into how directors engage with organizational members for governing a complex and long-term issue such as product innovation. Our multiple-case study of four listed pharmaceutical firms reveals a sequential process of board involvement: Directors with deep expertise govern scientific innovation, followed by the full board’s involvement in its strategic aspects. The nature of director involvement varies across board levels in terms of the direction (proactive or reactive), timing (regular or spontaneous), and the extent of formality of exchanges between directors and organizational members. Our study contributes to corporate governance research by introducing the concept of board behavioral diversity and by theorizing about the multilevel, structural, and temporal dimensions of board behavior and its relational characteristics.

Women Do the Job: The Reasons to Set Quota for Women on Boards

In 2012 Italy introduced quota to increase the number of women on corporate boards. The aim of our research is to shed more lights on how women on boards, after the enforcement of quota law, improve the board functions and the board structure. Our study focuses on all Italian FTSE MIB companies from 2008 to 2015. Italy is a country where the percentage of female directors was very low before quota. Female directors, when present, were linked through a family connection to the controlling shareholder. Our research demonstrates that a higher percentage of women on boards, after the quota, leads to a higher board members attendance and more board meetings, thus a better board monitoring. We document that, after quota, one more women to the board results in increasing the board involvement in strategy and the independence of audit committee. Our findings provide empirical support on the effectiveness of female directors, suggesting important implications of the quota legislation on the “type” of women elected.

From Board Composition to Corporate Environmental Performance Through Sustainability-Themed Allainces

From Board Composition to Corporate Environmental Performance Through Sustainability-Themed Allainces

Effects of the size of the board of directors and board involvement in strategy on a private club's financial performance

PurposeThe purpose of this paper is to explore the effects of the size of the board of directors and board involvement in strategy on financial performance in the private club industry.Design/methodology/approachData were collected in a web‐based survey of chief operating officers (COOs) and general managers (GMs) who are members of the Club Managers Association of America (CMAA). Hierarchical regression analysis of data from 360 respondents was used to examine the proposed model.FindingsThe results showed that board members' involvement in strategy and the size of the board of directors have a positive influence on a private club's financial performance.Research limitations/implicationsFurther research is indicated to include other board‐related influences such as group composition and the quality of relationships between board members and GMs/COOs to measure a club's financial performance.Originality/valueThe paper contributes to the limited existing literature on the association between a board of directors and financial performance in the private club industry.

Strategic Performance Information and Canadian Board Involvement in Strategy Related Issues: A Field Study

This study contributes to the growing body of research examining the governance processes undertaken by Boards of public companies. Specifically, we investigate the Board’s role in developing, executing and monitoring strategy and the nature and extent of strategic performance information provided to Boards. We also examine directors’ perceptions of indicators of effective Board involvement in strategy-related issues. Despite calls for greater Board involvement in strategy, few studies have examined this issue in a Canadian setting. To address this gap in the literature, we conducted 18 field interviews with directors (n = 14) of Canadian public companies and other governance experts (e.g., former directors, consultants). Our findings indicate Boards are commonly involved in monitoring strategy but there is more variation regarding the extent to which they also play an advisory role in developing and executing strategy. We also find that while Boards typically receive key performance indicators (financial and non-financial) there is limited provision of more strategy-based performance information such as balanced scorecards. Finally, our interviewees indicated that indicators of effective Board involvement in strategy should focus on process measures (e.g., nature and extent of strategy discussions) rather than objective outcomes such as financial performance. Our descriptive, field-based evidence provides a better understanding of Canadian Board involvement in strategy-related issues and suggests important areas for future empirical research.

New Answers and Questions Arising from Corporate Governance Research

New Answers and Questions Arising from Corporate Governance Research

How Boards Strategise: A Strategy as Practice View

While board involvement in strategy is seen as increasingly important, our understanding of how boards fulfil this role is limited. This article draws on indepth qualitative research with directors and senior managers to develop a Strategy as Practice view on how boards “do” strategy. Two different but complementary strategising practices – Procedural Strategising and Interactive Strategising – are identified and elaborated in terms of their underlying micro-activities. The internal boardroom factors that affect the relative emphasis on these strategising practices – the strategic stance of the board, board power and the perceived legitimacy of each practice – are also identified and discussed. These findings are then integrated into a typology of board strategising. A key implication of this paper is that boards need to consciously choose the nature and extent of their involvement in strategy.

Board Involvement in Strategy: Advancing the Governance of Sport Organizations

This study investigated how boards of national sport organizations might enhance their strategic capability. Utilizing an action research method and focusing on the case of New Zealand Football (soccer), findings established that greater board involvement in strategy advanced the board’s ability to perform its strategic function. Further findings determined the importance of shared leadership between the board and the CEO, the complex interplay in balancing this relationship and the need to integrate strategy into board processes.

Board characteristics and involvement in strategic decision making

PurposeThis paper aims to review how corporate governance is institutionalised in Nigeria and examine the relationship between board size, CEOs’ duality, board composition and the board's involvement in strategy.Design/methodology/approachA structured questionnaire was sent by post to the chairmen of 138 publicly quoted companies in Nigeria in November 2004.FindingsUsing primary and secondary data, our results suggest that the Nigerian public companies have embraced some principles of the Code of Best Practices for Public Companies. There is a high level of board involvement in strategy decision‐making process, but no correlation was found between board involvement and a number of governance variables (board size, board independence and CEO duality).Research limitations/implicationsThe sample of 39 responding companies is small although it represents a 28 per cent of response rate and is representative of the Nigerian stock market. However, we are unable to look at other factors such as industry sectors and we cannot generalise our findings regarding corporate governance practices in Nigeria.Practical implicationsThe investment climate in Nigeria can become more reassuring than in the past although there is room for further improvements as the effectiveness of the corporate government practices is still in doubt.Originality/valueThis paper adds to the scanty literature available on corporate governance practices in developing, countries. Findings extend our understanding about the strategic functions of the board in Nigeria, which is Africa's most populous nation, and the world's sixth larger producer of oil.

A Comparison of CEO and Director Perceptions of Board Involvement in Strategy

The assessment of board involvement in the strategic management process relies on data from CEOs and board members, and empirical studies assess board activity by either combining the ratings of CEOs and directors or by sampling one group of respondents only. This research note reports on discrepancies found between CEO and director perceptions of board involvement in the strategic management of credit unions. Consensus scores measure the dispersion of opinion, and the scores are compared to outcome measures using stepwise TOBIT analysis, which is rarely used in management research but is appropriate for studies with clustering of dependent variables. Findings reveal that the level of agreement about the board's involvement in mission statement development is associated with board member satisfaction. However, increases in the level of agreement about the board's involvement in monitoring strategy implementation are found in organizations that have less favorable financial soundness ratings.

Exploring the Political Side of Board Involvement in Strategy: A Study of Mixed‐Ownership Institutions*

abstractThis article reports on a comparative study of strategic decision‐making and board functioning in nine firms. Findings indicate that the heterogeneity of interests represented on the board, members' possession of relevant knowledge, and the presence of ex‐ante conflict resolution mechanisms combine in shaping if and how board members engage in strategy‐related activities and how strategic decisions are taken. Findings extend current understandings about the strategic functions of the board (monitoring, advice, and resource‐dependence), suggesting how, under certain conditions, boards may act as negotiation forums where directors search for a reconciliation between diverging shareholders' interests and views.

Board involvement in strategy and organisational performance

In firms where oversight by a regulatory body within the industry exists and where new core competencies must be developed to offset aggressive competition, there is evidence that a larger role for board of director involvement in strategic activities occurs. Within this context, survey data from board members and CEOs reveal that in organisations where financial soundness scores are less favourable, the odds of the board being more involved in a formal strategic planning process increase. Regarding a strategy role that consists of the board collaborating with management in making new strategic decisions, it is less likely that the board will take on this role when the organisation's financial soundness scores are not at the optimal level. For many years, boards of directors have been encouraged in theory and in practice to take on an active strategy role. However, in much of the literature the nature and extent of board involvement in strategy is undifferentiated. Most empirical studies dealing with corporate governance issues focus on board composition and structure variables and do not examine the level of involvement from a decision making perspective. Capturing this particular perspective is not only of interest to researchers but also is of practical importance, as general management seeks to realise the board's full potential in the strategic arena. This paper reports on the involvement of boards in a five-step strategic planning process and also examines board participation relative to that of senior management in strategic decision-making and evaluation. The first section examines the limited empirical findings of board involvement in strategic activities and outlines three viewpoints on possible participation levels. The paper then describes an empirical study that shows board involvement varies in relation to the organisation's financial performance.