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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Purpose – This study seeks to explore how non-executive directors address governance problems on Dutch two-tier boards. Within this board model, challenges might be particularly difficult to address due to the formal separation of management boards' decision-management from supervisory boards' decision-control roles. Design/methodology/approach – Semi-structured interviews and a questionnaire among non-executive directors provide unique insights into three major challenges in the boardrooms of two-tier boards in The Netherlands. Findings – The study indicates that non-executive directors mainly experience challenges in three areas: the ability 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 contributing factors to problems in the boardroom and the range of process and social interventions non-executive directors use to address boardroom issues with management and the organization of the board. Practical implications – While policy makers have been largely occupied with the “right” board composition, the results highlight the importance of adequately addressing operational challenges in the boardroom. The results emphasize the importance of a better understanding of board processes and the need of non-executive directors to carefully manage relationships in and around the boardroom. Originality/value – Whereas most studies have focussed on regulatory initiatives to improve the functioning of boards (e.g. the independence of the board), this study explores how non-executive directors attempt to enhance the effectiveness of boards on which they serve.
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This paper explores if there is a relation between governance boards in small and medium sized family firms and performance indicators of the firm. A governance board can be either a supervisory or an advisory board, this in line with the two tier governance structure that is used in the Netherlands. The resource based view is used to discuss the possible valuable resources of family SMEs and the way governance boards can influence these resources. Three functions of boards are distinguished: monitoring, resource and strategy. Especially the last two could be valuable for family SMEs. Hypotheses were tested on a sample of 370 Dutch family SMEs. Our results show that governance boards effects the existence of written strategic plans and the expected marketability of the firm. The data did not confirm a relation between a governance boards and expected short term sales growth.
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