The impact of board processes on board role performance and effectiveness: An empirical study of UK listed companies
Authors
Farquhar, Stuart DrAdvisors
Machold, Silke Dr.Issue Date
2011-11-10
Metadata
Show full item recordAbstract
In this research the impact of board governance orientation and board processes on board role performance and board effectiveness is examined. Building on existing literature, a model that relates board governance orientation (agency, stakeholder, stewardship and resource dependency) and board processes (cohesiveness, cognitive conflict, affective conflict, communication quality, effort norms, trust and the use of knowledge & skills) to board effectiveness via three mediating variables, board control role, board service role, and board strategy role is developed. The model was tested through a survey of listed companies in the UK. The results are based on 74 companies. The findings show (a) the board undertakes two distinct roles, control and service; (b) process variables, most notably cognitive conflict and the use of knowledge & skills, significantly influence board effectiveness mediated by the board’s control and/or service role; (c) structural variables, specifically the proportion of outsiders on the board, impacts on the board control role; (d) understanding board effectiveness requires a multitheoretic perspective.Publisher
University of WolverhamptonType
Thesis or dissertationLanguage
enDescription
A thesis submitted in partial fulfilment of the requirements of the University of Wolverhampton for the degree of DOCTOR OF PHILOSOPHYCollections
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The impact of board processes on board role performance and effectiveness: An empirical study of UK listed companiesMachold, Silke Dr.; Farquhar, Stuart (University of Wolverhampton, 2011-11)In this research the impact of board governance orientation and board processes on board role performance and board effectiveness is examined. Building on existing literature, a model that relates board governance orientation (agency, stakeholder, stewardship and resource dependency) and board processes (cohesiveness, cognitive conflict, affective conflict, communication quality, effort norms, trust and the use of knowledge & skills) to board effectiveness via three mediating variables, board control role, board service role, and board strategy role is developed. The model was tested through a survey of listed companies in the UK. The results are based on 74 companies. The findings show (a) the board undertakes two distinct roles, control and service; (b) process variables, most notably cognitive conflict and the use of knowledge & skills, significantly influence board effectiveness mediated by the board’s control and/or service role; (c) structural variables, specifically the proportion of outsiders on the board, impacts on the board control role; (d) understanding board effectiveness requires a multitheoretic perspective.
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The effects of directors' exploratory, transformative and exploitative learning on boards' strategic involvement: An absorptive capacity perspectiveSchønning, Aud; Walther, Axel; Machold, Silke; Huse, Morten (Wiley, 2018-05-22)While directors’ knowledge represents a crucial resource for strategizing on boards, little is known how knowledge of individual directors becomes deployed behind the doors of the boardroom. Drawing on the concept of absorptive capacity, we develop a model that explores how directors’ explorative, transformative and exploitative learning affects boards’ strategic involvement. Using large-scale survey data, our findings indicate that learning helps to ex-plain how directors’ knowledge leads to higher levels of strategic involvement. Moreover, we find that learning processes mutually reinforce each other and have complementary effects on boards’ strategic involvement. Our study contributes to the board and absorptive capacity lit-eratures by demonstrating that learning processes are interconnected with each other and rep-resent an intermediate way to put directors’ knowledge into effective use.
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Exploring the relationship between the board of directors and the Shari’ah Supervisory Board in Islamic financial institutions in Saudi ArabiaMachold, Silke; Alasmri, Ahmed Dhaifallah (University of Wolverhampton, 2020-04)Shari’ah-based governance has grown in the last three decades to become a unique and exclusive system in Islamic financial institutions (IFIs). Although there has been growing research interest in the topic concerning the need to have an efficient and sound Shari’ah corporate governance (CG) system in IFIs, there are no insights into the role and function of governance bodies within this new framework. Specifically, there is a lack of academic studies that have focused on investigating the relationship between the board of directors (BODs) and Shari’ah supervisory boards (SSBs) in the IFIs in Saudi Arabia. The main objective of this research was to examine how the BODs and the SSBs exercise their roles in the Saudi Islamic banks. In order to address this objective, the thesis sought to provide answers to three questions. First, the research attempted to examine the nature of the relationship between the company directors and the SSBs in Saudi Arabia, focusing especially on the roles and tasks of these governance bodies. Second, the research was designed to identify the factors in the CG structure of IFIs in Saudi Arabia that either support or undermine the deployment of the SSBs. Third, it intended to explore potential areas of convergence or divergence which exist between the BODs and the SSBs. A qualitative research approach was used to collect relevant information from the study participants using interviews for the data collection process. Findings drawn from the interviews revealed that the nature of the current relationship between SSBs and the BODs is initiated and sustained by several factors. Some of the important factors which inform the relationship of these two boards include the growing focus and foundation in Saudi Arabia towards the important role that the boards play, including promoting the achievement of IFIs objectives and stakeholder interests. Results from the study also indicated that several factors have been reported to support or undermine the uptake of SSBs. Some of the important facilitators include increasing public and consumer support for the need to have SSBs, the growing consensus among stakeholders to ensure banks offer legitimate products in line with Shari’ah principles, changing perceptions in the Islamic financial sector towards CG, and the desire to achieve effective governance via compliance with Shari’ah and Islamic laws. Finally, data revealed that the roles which the boards play supplement each other towards achieving the same objective of financial growth and stakeholder interests. Fundamentally, the two boards engage in frequent communication and information exchange regarding banking practices, where the outcome includes improved policy and process formulation and practice for their companies. In conclusion, findings from this study show that the SSBs and the BODs need to be perceived as complementary units that supplement each other as opposed to being perceived as being separate and conflicting boards in the IFIs.