The quality impact of governance change on board decision making

Abstract

Purpose

The purpose of this paper is to investigate how a regulation has influenced board structures, board processes, and board decision making and specifically, to explore the structural differences of a board before and after enforcing a regulation. This paper also investigates the change in operational processes of a board and determines which factors can influence the board's decision making.

Design/methodology/approach

To expand the scope of board studies, this study used the board minutes which were recorded in a stenographic form. Data from the board minutes provide the following information: date, director name, attendance rate, agenda, and spoken details by outside directors, etc. The minutes are taken from 24 public institutions in Korea.

Findings

The study on governance structure and processes has demonstrated the following outcomes. First, the number of directors has increased since enforcing the regulation. Second, the percentage of outside directors has increased. Third, the number of board meetings has increased. Fourth, the attendance rate in the board meetings showed a constant rate. Fifth, the number of agenda items in both reports and decisions has increased. Sixth, the SPCA unit of outside directors appeared different according to their job. Seventh, the number of decisions with amendments has increased. Eighth, there are several factors that influence board decisions.

Originality/value

The paper contributes to a better understanding of boards' decisions.

Citation

Wook Kim, S. (2011), "The quality impact of governance change on board decision making", Asian Journal on Quality, Vol. 12 No. 1, pp. 113-123. https://doi.org/10.1108/15982681111140589