This study explores how non-executive directors are challenged by management while they seek to improve the effectiveness of supervisory boards in the Netherlands. A combination of semi-structured interviews and a questionnaire among non-executive directors indicates that supervisory board members mainly experience boardroom challenges in three core areas: the ability of non-executive directors to ask management critical questions, information asymmetries between the management and supervisory boards and the management of the relationship between individual executive and non-executive directors. The qualitative in-depth analysis reveals the complexity of the main contributing factors to problems in the boardroom as well as the range of process and social interventions non-executive directors use to address boardroom issues. The findings highlight the need to better understand boardroom processes and the need of non-executive directors to carefully manage relationships in and around the boardroom.
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Triggered by highly publicised corporate scandals, changing societal expectations and the collapse of financial markets, the roles of boards of directors have changed significantly in safeguarding the interest of shareholders and other stakeholders. Yet, relatively little is known about contemporary challenges non–executive directors face and whether their boards are well–equipped for their new tasks. Based on self–assessment reports by supervisory boards, a survey and interviews with supervisory board members, this paper investigates the challenges non–executive directors face in the Netherlands, particularly after a decade of corporate governance reform. Non–executive directors' inadequate role in scrutinising executive directors' performance, information asymmetries and dysfunctional working relationships between executive and non–executive directors are among the greatest challenges indicated by non–executive directors on Dutch supervisory boards. The paper discusses several implications for scholars and practitioners and provides a unique insight in boardroom dynamics.
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Understanding the decision-making process of a boardroom is one of the most fascinating parts of organizational research. We are all interested in power games, team dynamics and how the external environment could influence the decision of directors. One of the important buzzwords of today is “good governance” and many boards face a lot of societal pressure to implement best practices of governance. It goes beyond regulatory requirements and boards need to take a different perspective on integrating governance codes and best practices in their organizations. In this study, we focused on the role of individual directors in developing organizational responses to that pressure. More specifically, we looked at how directors’ own cognitive frames of governance influence the way boards choose best practices.
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