Chapter

Understanding Board Structure, Composition, and Vigilance

Sydney Finkelstein, Donald C. Hambrick and Albert A. Cannella

in Strategic Leadership

Published in print October 2008 | ISBN: 9780195162073
Published online January 2009 | e-ISBN: 9780199867332 | DOI: http://dx.doi.org/10.1093/acprof:oso/9780195162073.003.0008

Series: Strategic Management Series

 Understanding Board Structure, Composition, and Vigilance

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This chapter provides an overview of the key driving forces influencing the makeup and behavior of boards of directors. Theories of resource dependence, institutionalization, and agency are all examined, with still-unanswered questions posed as propositions. The concept of board vigilance is introduced as perhaps the central construct in corporate governance. Vigilant boards are effective at monitoring and disciplining managers and are appropriately involved in strategic decision making. What accounts for board vigilance is of fundamental importance in research and in practice. While the relative power of a CEO to a board is a key influence, recent research has also considered a variety of interpersonal mechanisms that are at play. What remains is a key set of research opportunities to explore the vigilance dynamic in much greater detail, including the development of considerably more valid measures of vigilance than has historically been the case.

Keywords: board of directors; corporative governance; board vigilance; critical contingencies; board composition; board structure

Chapter.  12736 words.  Illustrated.

Subjects: Business Strategy

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