A framework for diagnosing board effectiveness
Nicholson, Gavin J. & Kiel, Geoffrey C. (2004) A framework for diagnosing board effectiveness. Corporate Governance: An International Review, 12(4), pp. 442-460.
Pressure on boards to improve corporate performance and management oversight has led to a series of inquiries and reports advocating governance reform. These reports largely reflect an agency perspective of governance and seek to ensure greater board independence from and control of management.
While board independence is important to good governance, we contend that frameworks, models and advice centred on one element of governance ignore the complexity of how boards work. We develop a holistic board framework of how boards work based upon the concept of board intellectual capital to address this concern.
Our framework proposes a series of inputs (company history, company constitution, legal environment) that lead to a particular mix of board intellectual capital. We contend that the balance of the elements of board intellectual capital will lead to a series of board behaviours. Further, the board needs to mobilize its intellectual capital to carry out a series of roles. The exact nature of these roles will depend on the company’s requirements. Thus, the governance outputs of organizational performance, board effectiveness and director effectiveness will depend on the match between the board’s intellectual capital and the roles required of it.
We conclude by demonstrating the benefits of this framework as a diagnostic tool. We outline how boards wishing to improve their governance systems can diagnose common governance problems by evaluating their own board’s capabilities in relation to the different components of the framework.
Impact and interest:
Citation counts are sourced monthly from and citation databases.
These databases contain citations from different subsets of available publications and different time periods and thus the citation count from each is usually different. Some works are not in either database and no count is displayed. Scopus includes citations from articles published in 1996 onwards, and Web of Science® generally from 1980 onwards.
Citations counts from theindexing service can be viewed at the linked Google Scholar™ search.
Full-text downloads displays the total number of times this work’s files (e.g., a PDF) have been downloaded from QUT ePrints as well as the number of downloads in the previous 365 days. The count includes downloads for all files if a work has more than one.
|Item Type:||Journal Article|
|Keywords:||Boards of directors, Board effectiveness, Board evaluation, director evaluation|
|Subjects:||Australian and New Zealand Standard Research Classification > LAW AND LEGAL STUDIES (180000) > LAW (180100)
Australian and New Zealand Standard Research Classification > COMMERCE MANAGEMENT TOURISM AND SERVICES (150000) > BUSINESS AND MANAGEMENT (150300) > Business and Management not elsewhere classified (150399)
|Divisions:||Current > QUT Faculties and Divisions > QUT Business School
Current > Schools > School of Accountancy
|Copyright Owner:||Copyright 2004 Blackwell Publishing|
|Copyright Statement:||The definitive version is available at www.blackwell-synergy.com|
|Deposited On:||14 Sep 2006|
|Last Modified:||29 Feb 2012 13:23|
Repository Staff Only: item control page