How two-tier boards can be more effective

Bezemer, Pieter-Jan, Peij, Stefan, de Kruijs, Laura, & Maassen, Gregory F. (2014) How two-tier boards can be more effective. Corporate Governance : The International Journal of Business In Society, 14(1), pp. 15-31.

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Purpose: This study explores how non-executive directors address governance problems on Dutch two-tier boards. Within this board model, challenges might be particularly difficult to address due to the formal separation of management boards’ decision-management from supervisory boards’ decision-control roles.

Design/methodology/approach: Semi-structured interviews and a questionnaire among non-executive directors provide unique insights into three major challenges in the boardrooms of two-tier boards in the Netherlands.

Findings: The study indicates that non-executive directors mainly experience challenges in three areas: the ability to ask management critical questions, information asymmetries between the management and supervisory boards and the management of the relationship between individual executive and non-executive directors. The qualitative in-depth analysis reveals the complexity of the contributing factors to problems in the boardroom and the range of process and social interventions non-executive directors use to address boardroom issues with management and the organization of the board.

Practical implications: While policy makers have been largely occupied with the ‘right’ board composition, the results highlight the importance of adequately addressing operational challenges in the boardroom. The results emphasize the importance of a better understanding of board processes and the need of non-executive directors to carefully manage relationships in and around the boardroom.

Originality/value: Whereas most studies have focussed on regulatory initiatives to improve the functioning of boards (e.g., the independence of the board), this study explores how non-executive directors attempt to enhance the effectiveness of boards on which they serve.

Impact and interest:

2 citations in Scopus
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ID Code: 60580
Item Type: Journal Article
Refereed: Yes
Keywords: boardroom challenges, board independence, non-executive directors, boardroom dynamics, boardroom interventions, two-tier boards, the Netherlands
DOI: 10.1108/CG-02-2013-0018
ISSN: 1472-0701
Subjects: Australian and New Zealand Standard Research Classification > COMMERCE MANAGEMENT TOURISM AND SERVICES (150000) > BUSINESS AND MANAGEMENT (150300)
Divisions: Current > QUT Faculties and Divisions > QUT Business School
Current > Schools > School of Accountancy
Copyright Owner: Copyright 2013 Emerald Group Publishing Ltd.
Copyright Statement: This article is (c) Emerald Group Publishing and permission has been granted for this version to appear here. Emerald does not grant permission for this article to be further copied/distributed or hosted elsewhere without the express permission from Emerald Group Publishing Limited
Deposited On: 04 Jun 2013 01:33
Last Modified: 28 Aug 2015 08:52

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