Design guidelines for boardroom’s effectiveness: the case of Fortune 500 firms
Abstract
Purpose
Boardroom’s effectiveness has emerged as an issue of considerable importance in the minds of academics and practitioners, particularly in the aftermath of the highly visible corporate governance scandals of the past few decades. The purpose of this paper is to shed new lights on this topic by proposing a robust design framework for boardroom’s effectiveness.
Design/methodology/approach
The interpretative investigation is based on semi-structured interviews administered to directors of Fortune 500 firms. The adopted thematic analysis is phenomenology, or the feelings, experiences and perceptions of events as depicted first hand by individuals with significant boardroom’s experience.
Findings
Two central findings could be construed from this investigation. First, the optimum boardroom’s configuration is not a universal proposition. In other words, there are no magic recipes, and no one-size fits all approach. Rather, the optimum boardroom’s configuration ought to be framed in light of the overarching needs of the firm in relation to the dynamic forces in the external environment. Second, the design of boardrooms ought to span beyond structural aspects (i.e. the outwardly visible aspects) to also encompass two largely unobserved boardroom’s phenomena, namely, the directorship personal trait factors and the directorship behavioral patterns.
Research limitations/implications
The findings presented herein may be contaminated with cognitive and personal biases, a common and unavoidable occurrence in qualitative research. A more integrative research approach using inductive and deductive techniques would allow for triangulation of results, thus providing an additional dose of validity and relevance to the research findings.
Practical implications
There has been a growing disenchantment about the modus operandi of the board of directors among practitioners, particularly as it pertains to large corporations with diffuse and heterogeneous shareholders and stakeholders. New design guidelines for the board of directors would directly impact on corporate practices.
Social implications
The design of high performance boardrooms is instrumental to shareholders, policymakers, directors, executives, rank and file employees, suppliers, customers and other direct and indirect stakeholders, as it may help avert future corporate governance mishaps.
Originality/value
As of today, the academic and popular literature has yet to provide unequivocal guidance for the development of high performance boardrooms. This study fills an important gap in the prevailing corporate governance literature by integrating both structural and socio-cognitive factors into the design framework of the board of directors.
Keywords
Citation
Rebeiz, K.S. (2016), "Design guidelines for boardroom’s effectiveness: the case of Fortune 500 firms", Corporate Governance, Vol. 16 No. 3, pp. 490-506. https://doi.org/10.1108/CG-08-2015-0104
Publisher
:Emerald Group Publishing Limited
Copyright © 2016, Emerald Group Publishing Limited