Abstract
Where was the board? This is the cry that emerges each time a company disastrously collapses or becomes enmeshed in a scandal. The board of directors are, in principle, the guardians of the company, the people who ensure it is well-managed, financially secure and operates in the best interests of its shareholders and other stakeholders. Yet when companies come crashing to the ground, it emerges that the board has failed in its fiduciary duty to the organization to ensure it is managed responsibly and sustainably, and to all stakeholders including shareholders to ensure their interests are not harmed. This chapter argues why board failure should be getting greater attention than it has—including that it has been with us for 300 years, across the world, and that the causes of these failures are both predictable and preventable if all concerned paid greater attention to board and organizational culture.
Keywords
- Culture
- Corporate disaster
- Board failure
- Business scandals
- Board governance
- Non-executive directors
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Notes
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Gerry Brown, Andrew Kakabadse and Filipe Morais, The Independent Director in Society, Basingstoke: Palgrave Macmillan, 2020.
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Ibid.
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Wall Street Journal, 5 May 2019, https://www.wsj.com/articles/boeing-knew-about-safety-alert-problem-for-a-year-before-telling-faa-airlines-11557087129.
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Gerry Brown, The Independent Director: The Non-Executive Director’s Guide to Effective Board Presence, Basingstoke: Palgrave Macmillan, 2015; Brown et al., 2020.
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Randall S. Peterson, D. Brent Smith, Paul V. Martorana and Pamela D. Owens, ‘The Impact of Chief Executive Officer Personality on Top Management Team Dynamics: One Mechanism by Which Leadership Affects Organizational Performance’, Journal of Applied Psychology 88 (3), 2003; Robert Hogan and Robert B. Kaiser, ‘What We Know About Leadership’, Review of General Psychology 9 (2), 2005.
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Hogan and Kaiser, p. 176.
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Steven Boivie, Michael K, Bednar, Ruth V. Aguilera and Joel L. Andrus, ‘Are Boards Designed to Fail? The Implausibility of Effective Board Monitoring’, Academy of Management Annals, February 2016.
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Brown, G., Peterson, R.S. (2022). Where Was the Board?. In: Disaster in the Boardroom. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-91658-9_1
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DOI: https://doi.org/10.1007/978-3-030-91658-9_1
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