Skip to main content
SpringerLink
Log in

Corporate Governance and the Board

  • Chapter
  • First Online:
Theory and Practice of Corporate Social Responsibility

Abstract

What is a board of directors to do, in the face of competing demands on the resources of the company and conflicting perspectives on what their roles are and should be? Corporate governance has become a central theme in management in the past two decades owing to a string of major corporate failures and evidence that the boards of these companies either failed to grasp the scale of the problems or failed to stand up to managers. Those corporations might have set out upon the wrong strategy, or engaged in fraud, or unethical behaviour, or simply suffered from bad luck. Their failures have led to a debate both with industry and in public policy about what mechanisms might prevent a recurrence, not least because they show how great the influence of the corporate sector is on society at large. In this chapter we consider how boards contribute to governing the corporation, the tensions they face along the way, and how theories of corporate governance point to the persistence of those tensions.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Log in via an institution
Chapter
USD 29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD 39.99
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book
USD 54.99
Price excludes VAT (USA)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

References

  • Adams RB, Hermalin BE, Weisbach MS (2009) The role of boards of directors in corporate governance: a conceptual framework & survey. SSRN eLibrary. Retrieved 5 Aug 2009, from http://ssrn.com/paper=1299212

  • Albert-Roulhac C (2009, March 10) Corporate governance report 2009: boards in turbulent times. Heidrick & struggles biennial survey of corporate governance in Europe. Retrieved 23 Dec 2009, from http://www.heidrick.com/NR/rdonlyres/A03A8F3A-A676-43FC-BBBA-06105F43B034/0/CorporateGovernance2009Europe.pdf

  • Bebchuk LA, Grinstein Y, Peyer UC (2009) Lucky CEOs and lucky directors. Journal of Finance, 4Forthcoming. Retrieved 24 July 2009, from http://ssrn.com/paper=1405316

  • Berle AA, Means GC (1932/1991) The modern corporation and private property, Revised edn. Transaction Publishers, New Brunswick, NJ

    Google Scholar 

  • Branson DM (2006) No seat at the table: how corporate governance and law keep women out of the boardroom. New York University Press, New York, NY

    Google Scholar 

  • Brick IE, Palmon O, Wald JK (2006) CEO compensation, director compensation, and firm performance: Evidence of cronyism? J Corp Finance 12(3):403–423

    Article  Google Scholar 

  • Cadbury A (1992) The financial aspects of corporate governance. Retrieved 9 Apr 2007, from http://www.ecgi.org/codes/documents/cadbury.pdf

  • Carapeto M, Lasfer M, Machera K (2005) Does duality destroy value? Cass business school research paper. Retrieved 27 June 2008, from http://ssrn.com/paper=686707

  • Caswell JA (1984) An institutional perspective on corporate control and the network of interlocking directorates. J Econ Issues 18(2):619

    Google Scholar 

  • Dahya J, Travlos NG (2000) Does the one man show pay? Theory and evidence on the dual CEO revisited. Eur Financ Manage 6(1):85–98

    Article  Google Scholar 

  • D’Aveni RA, Kesner IF (1993) Top managerial prestige, power and tender offer response: a study of elite social networks and target firm’s cooperation during takeovers. Organ Sci 4(2):123–151

    Article  Google Scholar 

  • Davis JH, Schoorman FD, Donaldson L (1997) Toward a Stewardship theory of management. Acad Manage Rev 22(1):20–47

    Article  Google Scholar 

  • Dittmann I, Maug EG, Schneider C (2008) Bankers on the boards of German firms: what they do, what they are worth, and why they are (Still) there. Retrieved 22 Mar 2008, from http://ssrn.com/paper=1093899

  • Donaldson L, Davis JH (1991) Stewardship theory or agency theory: CEO governance and shareholder returns. Aust J Manage 16(1):49–64

    Article  Google Scholar 

  • Elsayed K (2007) Does CEO duality really affect corporate performance? Corp Governance: Int Rev 15(6):1203–1214

    Article  Google Scholar 

  • Fama EF (1980) Agency problems and the theory of the firm. J Polit Econ 88(2):288–307

    Article  Google Scholar 

  • Fama EF, Jensen MC (1983) Separation of ownership and control. J Law Econ 23(2):301–325

    Article  Google Scholar 

  • Fear J (1997) German capitalism. In: McCraw TK (ed) Creating modern capitalism: how entrepreneurs, companies, and countries triumphed in three industrial revolutions. Harvard University Press, Cambridge, MA, pp 133–182

    Google Scholar 

  • Financial Reporting Council (2008) Combined code on corporate governance. Retrieved 11 Aug 2008, from http://www.frc.org.uk/documents/pagemanager/frc/Combined_Code_June_2008/Combined%20Code%20Web%20Optimized%20June%202008(2).pdf

  • Fram EH (2005) Are professional board directors the answer? MIT Sloan Manage Rev 46(2):75–77

    Google Scholar 

  • Freeman RE (1984) Strategic management: a stakeholder approach. Pitman Publishing, Boston

    Google Scholar 

  • Freeman RE, Evan WM (1990) Corporate governance: a stakeholder interpretation. J Behav Econ 19(4):337–359

    Article  Google Scholar 

  • Hallock KF (1997) Reciprocally interlocking boards of directors and executive compensation. J Financ Quant Anal 32(3):331–344

    Article  Google Scholar 

  • Hamilton RW (2000) Corporate governance in America 1950–2000: major changes but uncertain benefits. J Corp Law 25(2):349

    Google Scholar 

  • Higgs D (2003) Review of the role and effectiveness of non-executive directors. Retrieved 15 Oct 2006, from http://www.ecgi.org/codes/documents/higgsreport.pdf

  • Hillman AJ, Cannella JAA, Paetzold RL (2000) The resource dependence role of corporate directors: strategic adaptation of board composition in response to environmental change. J Manage Stud 37(2):235–255

    Article  Google Scholar 

  • Hopt KJ, Leyens PC (2004) Board models in Europe – recent developments of internal corporate governance structures in Germany, the United Kingdom, France, and Italy. Retrieved from http://ssrn.com/paper=487944

  • Jensen MC (1993) The modern industrial revolution, exit, and the failure of internal control systems. J Finance 48(3):831–880

    Article  Google Scholar 

  • Jensen MC (2001) Value maximization, stakeholder theory, and the corporate objective function. J Appl Corp Finance 14(3):8–21

    Article  Google Scholar 

  • Jensen MC, Meckling WH (1976) Theory of the firm: managerial behaviour, agency costs and ownership structure. J Financ Econ 3(4):305–360

    Article  Google Scholar 

  • Johnston J, Phillips L (2005) Male, pale and stale. Dir Boards 29(4):48–50

    Google Scholar 

  • Leblanc R (2004) Preventing future hollingers. Ivey Bus J 69(1):1–9

    Google Scholar 

  • Lee P (2002) Not badly paid but paid badly. Corp Governance: Int Rev 10(2):69–75

    Article  Google Scholar 

  • Lipton M, Lorsch JW (1992) A modest proposal for improved corporate governance. Bus Lawyer 48(1):59–77

    Google Scholar 

  • MacAvoy P, Millstein I (2003) The recurrent crisis in corporate governance. Palgrave Macmillan, Basingstoke

    Book  Google Scholar 

  • Muth MM, Donaldson L (1998) Stewardship theory and board structure: a contingency approach. Corp Governance 6(1):5–28

    Article  Google Scholar 

  • NASDAQ (2002) Summary of NASDAQ corporate governance proposals. Retrieved 3 Nov 2002, from http://www.nasdaq.com/about/Corp_Gov_Summary101002.pdf

  • Newell R, Wilson G (2002) A premium for good governance. McKinsey quarterly. Retrieved 28 May 2007, from http://www.mckinseyquarterly.com/article_abstract.aspx?ar=1205&L2=39&L3=3

  • Nordberg D (2007) Rebalancing the board’s agenda. J Gen Manage 33(2):13–23

    Google Scholar 

  • Nordberg D (2008) The ethics of corporate governance. J Gen Manage 33(6):35–52

    Google Scholar 

  • NYSE (2003) Final NYSE corporate governance rules. Retrieved 15 Oct 2006, from http://www.ecgi.org/codes/documents/finalcorpgovrules.pdf

  • Opsahl T, Seierstada C (16 June 2009) A change in representation on Norwegian boards of directors: compliance, prominence, and social capital. Retrieved 24 Dec 2009, from http://thetore.files.wordpress.com/2009/06/opsahl_seierstad-a_change_in_representation_on_norwegian_boards_of_directors.pdf

  • Penrose E (1959) The theory of growth of the firm. Wiley, New York, NY

    Google Scholar 

  • Pfeffer J, Salancik GR (1978) The external control of organizations: a resource dependence perspective. Harper & Row, New York, NY

    Google Scholar 

  • Sealy R, Vinnicombe S, Singh V (2008) The female FTSE report 2008: A decade of delay. International centre for women leaders. Retrieved 24 July 2009, from http://www.som.cranfield.ac.uk/som/dinamic-content/research/documents/ft2008.pdf

  • Singh V (2007) Ethnic diversity on top corporate boards: a resource dependency perspective. Int J Hum Res Manage 18(12):2128–2146

    Google Scholar 

  • Stewart JB (1992) Den of thieves. Touchstone, New York, NY

    Google Scholar 

  • Tuggle CS, Reutzel CR, Bierman L (2008) CEO duality and board attention to monitoring and control. Academy of Management Proceedings, 1–6

    Google Scholar 

  • Tyson L (2003) The Tyson report on the recruitment and development of non-executive directors, a report to the UK department of trade and industry. Retrieved 8 Apr 2007, from http://facultyresearch.london.edu/docs/TysonReport.pdf

  • Walker D (Nov 26 2009) A review of corporate governance in UK banks and other financial industry entities: Final recommendations. HM Treasury Independent Reviews. Retrieved 26 Nov 2009, from http://www.hm-treasury.gov.uk/d/walker_review_consultation_160709.pdf

  • Wearing R (2005) Cases in corporate governance. Sage, London

    Google Scholar 

  • Wernerfelt B (1984) A resource-based view of the firm. Strateg Manage J 5(2):171–180

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Westminster University, London, UK

    Donald Nordberg

Authors
  1. Donald Nordberg
    View author publications

    You can also search for this author in PubMed Google Scholar

Editor information

Editors and Affiliations

  1. London Metropolitan Business School, London Metropolitan University, Moorgate 84, London, EC2M 6SQ, United Kingdom

    Samuel O. Idowu

  2. Vlerick Leuven Gent Management School, Reep 1, Ghent, 9000, Belgium

    Celine Louche

Rights and permissions

Reprints and permissions

Copyright information

© 2011 Springer-Verlag Berlin Heidelberg

About this chapter

Cite this chapter

Nordberg, D. (2011). Corporate Governance and the Board. In: Idowu, S., Louche, C. (eds) Theory and Practice of Corporate Social Responsibility. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-16461-3_3

Download citation

Publish with us

Policies and ethics

Search

Navigation