Search results

Defaults in corporations, financial institutions and semipublic organizations have resulted in (corporate) governance Codes and Law provisions that aim to improve governance, risk management and policy making by executive and non-executive directors of involved boards in The Netherlands and across the globe. The aim of this chapter is to discuss how semipublic organizations deal with public interest and the contribution of multiple stakeholder team production theory (MSTP) to effectively deal with the issue of how to include interests of different stakeholders and the general public interest in the governance of and policy making by boards of semipublic organizations. This includes the identification, raising awareness and analysis of various interests and their implications.

The authors use a literature review and their own experience.

Based on our literature review and experience converging in a case study design, we hold that a semipublic organization’s exposure to public interests and how it deals with that will remain a critical issue.

We develop a research approach for dealing with stakeholders’ and the public interest and conclude that a governance perspective grounded in team production theory allows for a much better focused incorporation of possibly conflicting stakeholder interests, including public stakeholder interests and stakeholder commitment and cooperation than the dominant control perspective that is currently prevailing.

We contribute to the literature by arguing that the combined MSTP approach offers a pre-eminent approach to influence and shape board behaviour, an increased awareness of interests of different stakeholders coalescing in the public interest and an alternative, complementary view on decision-making by boards viewed as a team.

The literature considers three main models of nonprofit sector structure and development: liberal, welfare partnership, and social democratic. This study analyzes the cases of Italian and Canadian nonprofit organizations (NPOs) that operate in two third-sector contexts, widely known as “hybrids.” In particular, we aim to verify whether some features of governance, leadership, and volunteer participation have impacts on the financial performances of selected Italian and Canadian NPOs.

Differences between the two studied nonprofit contexts influenced the sampling, the data collection, and the methods of analysis. Data on Italian and Canadian NPOs are analyzed both together and separately, using multiple regression models. Revenues, fund-raising and other grants from the general public, and program expenses are used as measurements of financial performance.

Our analysis demonstrates that some board characteristics, as well as volunteer participation and representation on the board, have impacts on the nonprofit financial performance. The characteristics of the CEO studied in this work are not significantly associated with the level of financial performance.

This study has several important implications for research on board characteristics, CEO characteristics and volunteer management and governance, as well as implications for practitioners. The limitations of this study are related mostly to the different methods used for sampling NPOs and collecting data in the two different country contexts due to the different level of availability of data.

The past literature has not adequately examined the relationships among the board and CEO characteristics, the role of volunteers in governance and financial performance.

Despite the growing interest in IJVs and their governance, systematic research is limited on the board of directors and their roles in international joint ventures in emerging markets. In this study, we draw from corporate governance research that suggests that the levels of control and collaboration by boards are influenced by organizational complexity. While joint ventures possess several similarities compared to unitary firms, they also have unique sources of complexity given the fact that two or more international partners collaborate within JVs under an incomplete contract. Based on a sample of 114 IJVs, we argue and show four separate conditions that influence the functions that boards undertake as well as how control and collaboration as two separate functions are interrelated. Our findings address calls for research to open the black box of what boards actually do as well as to bring corporate governance theory to new organizational forms such as joint ventures.

Purpose – Grant-giving foundation leaders are increasingly concerned with understanding the primary role their institutions are pressured to play in financing the growing nonprofit sectors. The main objective of the chapter is to determine whether effective governance plays a major role in driving foundations’ innovation and value-creation processes.Methodology – Building on the idea that foundations should act as financial partners, managerial experts, and innovator facilitators who deal with the projects proposed by nonprofit organizations, this chapter uses a survey and the annual reports of Italian grant-giving foundations to isolate their records in term of governance, innovation attitude, and performance.Findings – The results of this chapter contribute to improving understanding of the drivers that help foundations to improve the sophistication level of the grant-giving process. In particular, the analysis of governance provides relevant insights about the path foundations follow to incorporate selected tailored methods and practices from the “for profit” competitive arena to improve foundations’ output and nonprofit grantees’ outcomes.Social implication – Many academics, political leaders, and practitioners expect foundations to play the unique dual role of merchant bank and venture capitalist to foster the positive impact of nonprofit organizations on societies and people. The findings of this chapter facilitate this process.Originality/value of the chapter – The main contribution of this study lies in proposing and testing a theoretical framework that foundations can implement to disseminate liquidity and managerial expertise efficiently among selected grantees and to improve grantees’ social outcome.

This case explores the context in which decisions related to the composition of the board of directors are made at a company with a strong, participatory culture and strong values of accountability, responsibility, and community.

This case study seeks an in-depth understanding of a 100% ESOP company’s (Carris Reels, Inc.) values, culture, and processes related to broad-based employee participation in decision-making and governance of the company. Data were collected from formal and informal interviews and discussions with Carris Reels’ employees, observation, and company archival data, including newsletters, meeting minutes, and announcements.

Goals may be sufficiently different at highly participatory, majority employee-owned ESOP companies such that regulatory guidelines for board structure for public or privately held companies that are not employee-owned should be evaluated in the context of that company’s stakeholders.

A trend toward external members for boards of directors should be given careful consideration in the case of majority ESOP companies whose employee-owned and governed status is central to the company’s vision.

This case study provides an in-depth look at a company’s board of directors’ composition-related decision-making in the context of broad-based participatory processes and the desire to maintain a profitable and fully employee-owned and governed enterprise.

Purpose – The aim of this article is to examine the effects of ownership concentration and board characteristics on the performance of firms domiciled in Jordan.

Design/methodology/approach – The article employs two-stage least square (2SLS) regressions on a sample of 103 firms listed on the Amman Stock Exchange for financial years 2002–2005.

Findings – The empirical results suggest that ownership concentration, multiple directorships and board size are each positive and significant in determining firm performance. Although this result contradicts the findings of some developed country studies, they are consistent with recent emerging market studies.

Implications – The findings of this article echo some of prior researchers’ contention that reforms in corporate governance principles in emerging markets should go beyond adopting the best practice in developed markets and take into account the country- and firm-specific characteristics.

Originality/value – This article exploits a unique dataset of ownership and board characteristics in an emerging market, as well as provides additional evidence on the relation between corporate governance and firm performance. Results of this research provide useful information for policymakers and legislators to understand the environment for corporate control in developing countries.

Many organizations around the world currently are facing board diversity issues and challenges. Hence, this empirical paper investigates the relationship between board diversity and firm’s financial performance. We use a sample of 35 companies from five countries in Southeast Europe (Macedonia, Croatia, Serbia, Bosnia and Herzegovina, and Greece) for the period between 2008 and 2012 to find that, on average, companies with well-educated board members are more profitable and overvalued on the market. When running the regression again to test the levels of heterogeneity, we also find that the companies with more women on board tend to be overvalued on the market, while those with more foreigners on board are subject of undervaluation. The paper mostly contributes to the literature on corporate governance and board diversity. First, we postulate the impact of each of the board diversity variables on the financial performance and then show the extent of this impact and its economic interpretation. Our findings have important practitioners’ implications for corporate regulators and policy-makers since the demonstrated positive impact of the well-educated board members on firm’s financial performance gives a new impetus in building a corporate strategy that will intend to engage more people holding PhD on board.

Positivist deductive research on transformational leadership brings along with it 25 years of researcher presuppositions. Such research not only suggests that a transformational leader’s influence is unidirectional but also that transformational leadership theory is a universal theory. In this chapter, I inductively seek to examine board-executive director interactions, free from the shackles of existing theory.

The current chapter uses an inductive research approach to the collection and analysis of the empirical material. By being open to surprises in the empirical material, I am able to explore behaviors and relationships, while analyzing a specific context – the nonprofit board-executive director relationship.

The current study finds evidence that individualized consideration in a governance model frequently occurs in the opposite direction. Despite organizational documents promoting a hierarchical structure, evidence of top-down, collegiality, and bottom-up individualized consideration suggests hierarchical boundaries are commonly crossed in the decision making process.

Results of this exploratory study suggest that in a governance context, hierarchical actors do not fit neatly into the boxes defined by 30 years of research on transformational leadership theory, suggesting that the leadership process is more complex than portrayed by current dichotomizations. The findings provide support for recent criticisms of transformational leadership theory.

The findings of this chapter provide evidence of the benefits of eliciting input from organizational actors at multiple hierarchical levels. The empirical evidence provides practitioners with a fresh perspective on board roles and relationship, diverging from the traditional structural prescriptions.

The chapter aims to clarify the relationship between corporate governance structure and corporate subscription to Global Compact standards. Part one of the chapter looks at the relationship between different models of board governance and active Global Compact participation by publicly listed companies. Part two of the chapter examines a number of external mechanisms aimed at bringing corporate behavior in line with Global Compact principles, and argues that there is a mutually reinforcing relationship between internal governance structures and external provisions aimed at influencing corporate behavior.

Part one of the chapter uses an independent T-test to compare the average (mean) proportion of publicly listed companies from unitary board countries with an active Global Compact Communication on Progress status with the average proportion of publicly listed companies from two-tier/hybrid corporate governance systems listed as active Global Compact participants. Part two of the chapter uses primary and secondary sources to examine external mechanisms operating across national borders aimed at influencing corporate behavior.

The chapter finds that a higher proportion of public companies from countries with two-tier/hybrid corporate governance structures have become active Global Compact participants compared to public companies from legal systems with unitary board corporate governance structures. Part two of the chapter examines the potentially mutually reinforcing relationship between internal governance structures and external mechanisms for modifying corporate behavior.

While external codes and standards such as the UN Guiding Principles on Business and Human Rights and the OECD Guidelines for Multinational Enterprises appear to be influencing corporate behavior worldwide, quantitative data confirming and recording the extent and nature of this influence (if any) remains limited.

The chapter provides useful insights for policy makers and corporate leaders into the relationship between internal corporate governance structures and external codes, standards and guidelines aimed at influencing corporate behavior.

This chapter provides original insights into whether and how internal governance structures can complement and reinforce social standards regarding global corporate citizenship, and the legal guidelines reflecting those standards.

The chapter provides a case study of the strategic-level employee involvement (EI) program at a high-performance company, Delta Air Lines. EI at Delta – probably the most extensive in breadth, depth, and representational structure for nonunion workers at an American company – extends from shop floor to board room. Attention here is on the board component: a group of five peer-selected employees called the Delta Board Council (DBC) which has a nonvoting seat on the board of directors and participates in a wide range of strategic decisions and roles. The chapter discusses why this kind of representational EI group, although widespread up to the 1930s, is now quite rare in the United States. The main part of the chapter focuses on the structure, purpose, and accomplishments of the DBC, presented through a question and answer (Q&A) interview with a founding DBC member. Provided are numerous EI “lessons-learned” and “do’s” and “don’ts” for managers.