Abstract
Despite the critical leadership role that corporate boards play in organizations, the character of their members has been neglected in research studies. We used a multi-method data collection approach to explore whether current directors in the public, private, and not-for-profit sectors believe that leader character plays an important role in board governance, particularly with regards to how boards make decisions, recruit new members, lead their organizations, and work together to perform their fiduciary and other responsibilities. Despite the perceived importance of leader character as reported by highly experienced corporate directors, we found that leader character is not commonly attended to in board conversations as a means to purposively improve the way boards operate. We outline practical implications of our findings as well as offer a call to action for future research on character in the context of board governance with the intent to improve governance in the public, private, and not-for-profit sectors and hence to foster sustained excellence in organizations.
Similar content being viewed by others
References
Ancona, D. G., & Caldwell, D. F. (1988). Beyond task and maintenance: Defining external functions in groups. Group & Organization Studies, 13, 468–494.
Ashford, S. J., & DeRue, D. S. (2012). Developing as a leader: The power of mindful engagement. Organizational Dynamics, 41, 146–154.
Bandura, A. (1997). Self-efficacy: The exercise of control. New York, NY: WH Freedman.
Bednar, M. K., & Westphal, J. D. (2006). Surveying the corporate elite: Theoretical and practical guidance on improving response rates and response quality in top management survey questionnaires. In D. Ketchen & D. Bergh (Eds.), Research methodology in strategy and management (Vol. 3, pp. 37–56). Bingley: JAI Press.
Bennis, W. G., & Goldsmith, J. (2003). Learning to lead: A workbook on becoming a leader. Philadelphia, PA: Basic Books.
Benz, M., & Frey, B. S. (2007). Corporate governance: What can we learn from public governance? Academy of Management Review, 32, 92–104.
Bettis, R. A., & Hitt, M. A. (1995). The new competitive landscape. Strategic Management Journal, 16, 7–19.
Bezemer, P. J., Nicholson, G., & Pugliese, A. (2014). Inside the boardroom: exploring board member interactions. Qualitative Research in Accounting and Management, 11, 238–259.
Bono, J. E., & Judge, T. A. (2004). Personality and transformational and transactional leadership: A meta-analysis. Journal of Applied Psychology, 89, 901–910.
Bright, D. S., Cameron, K. S., & Caza, A. (2006). The amplifying and buffering effects of virtuousness in downsized organizations. Journal of Business Ethics, 64, 249–269.
Cameron, K., Bright, D., & Caza, A. (2004). Exploring the relationships between organizational virtuousness and performance. American Behavioral Scientist, 47, 1–24.
Chizema, A., Kamuriwo, D. S., & Shinozawa, Y. (2015). Women on corporate boards around the world: Triggers and barriers. Leadership Quarterly, 26, 1051–1065.
Cohan, J. A. (2002). “I didn’t know” and” I was only doing my job”: Has corporate governance careened out of control? A case study of Enron’s information myopia. Journal of Business Ethics, 40, 275–299.
Cohen, T. R., Panter, A. T., Turan, N., Morse, L., & Kim, Y. (2014). Moral character in the workplace. Journal of Personality and Social Psychology, 107, 943–963.
Conger, J., & Hollenbeck, G. P. (2010). What is the character of research on leadership character? Consulting Psychology Journal: Practice and Research, 62, 311–316.
Crête, R. (2016). The volkswagen scandal from the viewpoint of corporate governance. European Journal of Risk Regulation, 7, 25–31.
Cronin, M. A., Weingart, L. R., & Todorova, G. (2011). Dynamics in groups: Are we there yet? Academy of Management Annals, 5, 571–612.
Crossan, M., Byrne, A., Seijts, G., Reno, M., Monzani, L., & Gandz, J. (2017). Toward a framework of leader character in organizations. Journal of Management Studies, 54, 986–1018.
Crossan, M., Mazutis, D., Seijts, G., & Gandz, J. (2013). Developing leadership character in business programs. Academy of Management Learning & Education, 12, 285–305.
Crossan, M., Seijts, G., & Gandz, J. (2016). Developing leadership character. New York, NY: Routledge Publishing.
Dalton, D. R., & Dalton, C. M. (2011). Integration of micro and macro studies in governance research: CEO duality, board composition, and financial performance. Journal of Management, 37, 404–411.
Dalton, D. R., Hitt, M. A., Certo, S. T., & Dalton, C. M. (2007). The fundamental agency problem and its mitigation: Independence, equity, and the market for corporate control. Academy of Management Annals, 1, 1–64.
Deetz, S. A., Tracy, S. J., & Simpson, J. L. (2000). Leading organizations through transition. Thousand Oaks, CA: Sage.
Du, Y., Deloof, M., & Jorissen, A. (2011). Active boards of directors in foreign subsidiaries. Corporate Governance: An International Review, 19, 153–168.
Esser, J. K. (1998). Alive and well after 25 years: A review of groupthink research. Organizational Behavior and Human Decision Processes, 73, 116–141.
Finkelstein, S., & D’Aveni, R. A. (1994). CEO duality as a double-edged sword: How boards of directors balance entrenchment avoidance and unity of command. Academy of Management Journal, 37, 1079–1108.
Finkelstein, S., Hambrick, D. C., & Cannella, A. A. (2009). Strategic leadership: Theory and research on executives, top management teams, and boards. New York, NY: Oxford University Press.
Forbes, D. P., & Milliken, F. J. (1999). Cognition and corporate governance: Understanding boards of directors as strategic decision-making groups. Academy of Management Review, 24, 489–505.
Fried, V. H., Bruton, G. D., & Hisrich, R. D. (1998). Strategy and the board of directors in venture capital-backed firms. Journal of Business Venturing, 13, 493–503.
Furlong, W., Crossan, M., Gandz, J., & Crossan, L. (2017). Character’s essential role in addressing misconduct in financial institutions. Business Law International, 18, 199–223.
Gandz, J., Crossan, M., Seijts, G., & Stephenson, C. (2010). Leadership on trial: A manifesto for leadership development. London, ON: The Richard Ivey School of Business.
Gentry, W. A., Cullen, K. L., Sosik, J. J., Chun, J. U., Leupold, C. R., & Tonidandel, S. (2013). Integrity’s place among the character strengths of middle-level managers and top-level executives. Leadership Quarterly, 24, 395–404.
Grahek, M. S., Thompson, A. D., & Toliver, A. (2010). The character to lead: A closer look at character in leadership. Consulting Psychology Journal: Practice and Research, 62, 270–290.
Hackett, R. D., & Wang, G. (2012). Virtues and leadership: An integrating conceptual framework founded in aristotelian and confucian perspectives on virtues. Management Decision, 50, 868–899.
Hambrick, D. C., Werder, A. V., & Zajac, E. J. (2008). New directions in corporate governance research. Organization Science, 19, 381–385.
Hannah, S. T., & Avolio, B. J. (2011). The locus of leader character. Leadership Quarterly, 22, 979–983.
Hannah, S. T., & Jennings, P. L. (2013). Leader ethos and big-C character. Organizational Dynamics, 42, 8–16.
Hannah, S. T., Sumanth, J. J., Lester, P., & Cavarretta, F. (2014). Debunking the false dichotomy of leadership idealism and pragmatism: Critical evaluation and support of newer genre leadership theories. Journal of Organizational Behavior, 35, 598–621.
Hillman, A. J., Nicholson, G., & Shropshire, C. (2008). Directors’ multiple identities, identification, and board monitoring and resource provision. Organization Science, 19, 441–456.
Hillman, A. J., Shropshire, C., Certo, S. T., Dalton, D. R., & Dalton, C. M. (2011). What I like about you: A multilevel study of shareholder discontent with director monitoring. Organization Science, 22, 675–687.
Huse, M. (2005). Accountability and creating accountability: A framework for exploring behavioural perspectives of corporate governance. British Journal of Management, 16, 65–79.
Huse, M., Hoskisson, R., Zattoni, A., & Viganò, R. (2011). New perspectives on board research: Changing the research agenda. Journal of Management and Governance, 15, 5–28.
James, E. H., Wooten, L. P., & Dushek, K. (2011). Crisis management: Informing a new leadership research agenda. Academy of Management Annals, 5, 455–493.
Janis, I. L. (1972). Victims of groupthink: A psychological study of foreign-policy decisions and fiascoes. Oxford: Houghton Mifflin.
Jensen, M., & Zajac, E. J. (2004). Corporate elites and corporate strategy: How demographic preferences and structural position shape the scope of the firm. Strategic Management Journal, 25, 507–524.
Johnson, J. L., Daily, C. M., & Ellstrand, A. E. (1996). Boards of directors: A review and research agenda. Journal of Management, 22, 409–438.
Johnson, S. G., Schnatterly, K., & Hill, A. D. (2013). Board composition beyond independence: Social capital, human capital, and demographics. Journal of Management, 39, 232–262.
Judge, W. Q., Jr., & Zeithaml, C. P. (1992). Institutional and strategic choice perspectives on board involvement in the strategic decision process. Academy of Management Journal, 35, 766–794.
Kiel, F. (2015). Return on character: The real reason leaders and their companies win. Boston, MA: Harvard Business Review Press.
Kotter, J. P., & Heskett, J. L. (2011). Corporate culture and performance. New York, NY: The Free Press.
Locke, E. A., & Latham, G. P. (1990). A theory of goal setting and task performance. Englewood Cliffs, NJ: Prentice-Hall.
Locke, E. A., & Latham, G. P. (2013). New developments in goal setting and task performance. New York, NY: Routledge.
Lorsch, J. W., & MacIver, E. (1989). Pawns or potentates: The reality of America’s corporate boards. Boston, MA: Harvard Business School Press.
Lynall, M. D., Golden, B. R., & Hillman, A. J. (2003). Board composition from adolescence to maturity: A multitheoretic view. Academy of Management Review, 28, 416–431.
Mahadeo, J. D., Soobaroyen, T., & Hanuman, V. O. (2012). Board composition and financial performance: Uncovering the effects of diversity in an emerging economy. Journal of Business Ethics, 105, 375–388.
Mardjono, A. (2005). A tale of corporate governance: Lessons why firms fail. Managerial Auditing Journal, 20, 272–283.
Mazutis, D., & Zintel, C. (2015). Leadership and corporate responsibility: A review of the empirical evidence. Annals in Social Responsibility, 1, 76–107.
McCauley, C. (1998). Group dynamics in Janis’s theory of groupthink: Backward and forward. Organizational Behavior and Human Decision Processes, 73, 142–162.
McNulty, T., & Pettigrew, A. (1999). Strategists on the board. Organization Studies, 20, 47–74.
Minichilli, A., Zattoni, A., & Zona, F. (2009). Making boards effective: An empirical examination of board task performance. British Journal of Management, 20, 55–74.
Monks, R. A. G., & Minow, N. (1995). Corporate governance. Chichester: Wiley.
Moore, G. (2005). Corporate character: Modern virtue ethics and the virtuous corporation. Business Ethics Quarterly, 15, 659–685.
Mumford, M. D., Barrett, J. D., & Hester, K. S. (2012). Background data: Use of experiential knowledge in personnel selection. In N. Schmitt (Ed.), The Oxford handbook of personnel assessment and selection (pp. 353–382). New York, NY: Oxford University Press.
Nadler, D. A. (2004). Building better boards. Harvard Business Review, 82, 102–105.
Nadler, D. A., Behan, B. A., & Nadler, M. B. (2006). Building better boards: A blueprint for effective governance. San Francisco, CA: Wiley.
Nonaka, I., & Takeuchi, H. (2011). The wise leader. Harvard Business Review, 89, 58–67.
O’Reilly, C., Caldwell, D., Chatman, J., & Doerr, B. (2015). The promise and problems of organizational culture: CEO personality, culture, and firm performance. Group and Organization Management, 39, 595–625.
O’Connor, M. A. (2002). The Enron board: The perils of groupthink. University of Cincinnati Law Review, 71, 1233–1320.
Owens, B. P., & Hekman, D. R. (2016). How does leader humility influence team performance? Exploring the mechanisms of contagion and collective promotion focus. Academy of Management Journal, 59, 1088–1111.
Peterson, C., & Seligman, M. E. P. (2004). Character strengths and virtues. New York, NY: Oxford University Press.
Petrovic, J. (2008). Unlocking the role of a board director: A review of the literature. Management Decision, 46, 1373–1392.
Phillips, J. M., & Gully, S. M. (1997). The role of goal orientation, ability, need for achievement, and locus of control in the self-efficacy and goal-setting process. Journal of Applied Psychology, 82, 792–802.
Pinto, J. A. (2016). An examination of the evolution of governance. Banking & Finance Law Review, 31, 325–348.
PricewaterhouseCoopers. (2016). Annual corporate directors survey. https://www.pwc.com/us/en/corporate-governance/annual-corporate-directors-survey.html. Accessed November 5, 2017.
Pugliese, A., Bezemer, P. J., Zattoni, A., Huse, M., Van den Bosch, F. A., & Volberda, H. W. (2009). Boards of directors’ contribution to strategy: A literature review and research agenda. Corporate Governance: An International Review, 17, 292–306.
Quick, J. C., & Wright, T. A. (2011). Character-based leadership, context and consequences. Leadership Quarterly, 22, 984–988.
Remler, D. K., & Van Ryzin, G. G. (2011). Research methods in practice: Strategies for description and causation. Thousand Oaks, CA: Sage Publications Inc.
Rhodes, C. (2016). Democratic business ethics: Volkswagen’s emissions scandal and the disruption of corporate sovereignty. Organization Studies, 37, 1501–1518.
Salgado, J. F., Viswesvaran, C., & Ones, D. S. (2001). Predictors used for personnel selection: An overview of constructs. In N. Anderson, D. S. Ones, H. K. Sinangil, & C. Viswesvaran (Eds.), Handbook of industrial, work and organizational psychology (pp. 165–199). Thousand Oakes, CA: Sage Publications.
Schein, E. H. (2010). Organizational culture and leadership. San Francisco, CA: Jossey-Bass Publishers.
Seijts, G. (2013). Good leaders learn: Lessons from lifetimes of leadership. New York, NY: Routledge Publishing.
Seijts, G., Crossan, M., & Carleton, E. (2017). Embedding leader character into HR practices to achieve sustained excellence. Organizational Dynamics, 46, 30–39.
Seijts, G., Gandz, J., Crossan, M., & Reno, M. (2015). Character matters: Character dimensions’ impact on leader performance and outcomes. Organizational Dynamics, 44, 65–74.
Seijts, G., Latham, G. P., Tasa, K., & Latham, B. W. (2004). Goal setting and goal orientation: An integration of two different yet related literatures. Academy of Management Journal, 47, 227–239.
Sharfman, B. S., & Toll, S. J. (2008). Dysfunctional deference and board composition: Lessons from Enron. Northwestern University Law Review Colloquy, 103, 153–162.
Sirmon, D. G., Hitt, M. A., & Ireland, R. D. (2007). Managing firm resources in dynamic environments to create value: Looking inside the black box. Academy of Management Review, 32, 273–292.
Sosik, J. J., Gentry, W. A., & Chun, J. U. (2012). The value of virtue in the upper echelons: A multisource examination of executive character strengths and performance. Leadership Quarterly, 23, 367–382.
Sturm, R., Vera, D., & Crossan, M. (2017). The entanglement of leader character and leader competence and its impact on performance. Leadership Quarterly, 28, 349–366.
Van de Ven, A. (2007). Engaged scholarship: A guide for organizational and social research. Oxford, NY: Oxford University Press.
Westphal, J. D., & Zajac, E. J. (2013). A behavioral theory of corporate governance: Explicating the mechanisms of situated and socially constituted agency. Academy of Management Annals, 7, 607–661.
Wright, T. A. (2015). Reflections on the role of character in business education and student leadership development. Journal of Leadership & Organizational Studies, 22, 253–264.
Wright, T. A., & Goodstein, J. (2007). Character is not “dead” in management research: A review of individual character and organizational-level virtue. Journal of Management, 33, 928–958.
Wright, T. A., & Huang, C. C. (2008). Character in organizational research: Past directions and future prospects. Journal of Organizational Behavior, 29, 981–987.
Zhu, D. H. (2013). Group polarization on corporate boards: Theory and evidence on board decisions about acquisition premiums. Strategic Management Journal, 34, 800–822.
Zimbardo, P. G. (2007). The Lucifer effect: Understanding how good people turn evil. New York, NY: Random House.
Acknowledgements
This study was funded by a grant from the Social Sciences and Humanities Research Council of Canada (File: 435-2013-1889) awarded to the first, third and fourth authors.
Author information
Authors and Affiliations
Corresponding author
Ethics declarations
Conflict of interest
The authors declare that they have no conflict of interest.
Ethical standard
All procedures performed in studies involving human participants were in accordance with the ethical standards of the institutional and/or national research committee and with the 1964 Helsinki declaration and its later amendments or comparable ethical standards.
Informed consent
Informed consent was obtained from all individual participants included in the study.
Rights and permissions
About this article
Cite this article
Seijts, G., Byrne, A., Crossan, M.M. et al. Leader character in board governance. J Manag Gov 23, 227–258 (2019). https://doi.org/10.1007/s10997-018-9426-8
Published:
Issue Date:
DOI: https://doi.org/10.1007/s10997-018-9426-8