Skip to main content
SpringerLink
Log in

Theoretical Paradigms of the Board of Directors

  • Living reference work entry
  • First Online:
Encyclopedia of Sustainable Management

  • 154 Accesses

Synonyms

Theories on the board of directors

Introduction

There are several theories that can contribute to knowledge about the most important governance body of the firm – the board of directors. However, the emergence of alternative theories, opposed in some points, has contributed even more to the broad debate on corporate governance (Garner et al. 2017). The three dominant theoretical paradigms in research on corporate governance are (Nicholson and Kiel 2007): the Agency Theory (Jensen and Meckling 1976; Fama and Jensen 1983), the Stewardship Theory (Donaldson 1990; Donaldson and Davis 1991, 1994), and the Resources and Capabilities Theory (Zald 1969; Pfeffer 1972; Pfeffer and Salancik 1978). These three theories recognize the different main roles of the board of directors, in such a way that the optimal configuration of the board differs depending on the theoretical approach adopted. However, a common aspect of all of them is their emphasis on clarifying the relationship between...

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

Access this chapter

Log in via an institution

Institutional subscriptions

References

  • Åberg, C., Bankewitz, M., & Knockaert, M. (2019). Service tasks of board of directors: A literature review and research agenda in an era of new governance practices. European Management Journal, 37, 648–663.

    Article  Google Scholar 

  • Adams, R. B. (2017). Boards, and the directors who sit on them. European Corporate Governance Institute, Working Paper 515/2017.

    Google Scholar 

  • Aguilera, R. V., Filatotchev, I., Gospel, H., & Jackson, G. (2008). An organizational approach to comparative corporate governance: Costs, contingencies, and complementarities. Organization Science, 19(3), 475–492.

    Article  Google Scholar 

  • Aguilera, R. V., Florackis, C., & Kim, H. (2016). Advancing the corporate governance research agenda. Corporate Governance: An International Review, 24(3), 172–180.

    Article  Google Scholar 

  • Andrés, P., & Santamaría, M. (2018). Del consejo de administración a los códigos de buen gobierno: un paseo por la literatura académica. The Economist, 158, 106–125.

    Google Scholar 

  • Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99–120.

    Article  Google Scholar 

  • Barontini, R., & Bozzi, S. (2018). Family firm heterogeneity and CEO compensation in continental Europe. Journal of Economics and Business, 97, 1–18.

    Article  Google Scholar 

  • Baysinger, B. D., & Hoskisson, R. E. (1990). The composition of boards of directors and strategic control: Effects on corporate strategy. Academy of Management Review, 15, 72–87.

    Article  Google Scholar 

  • Baysinger, B. D., Kosnik, R. D., & Turk, T. A. (1991). Effects of board and ownership structure on corporate R&D strategy. Academy of Management Journal, 34(1), 205–214.

    Google Scholar 

  • Berle, A. A., & Means, G. C. (1932). The modern corporation and private property. New York: Macmillan Publishing.

    Google Scholar 

  • Boyd, B. K. (1994). Board control and CEO compensation. Strategic Management Journal, 15(5), 335–344.

    Article  Google Scholar 

  • Boyd, B. K., Haynes, K. T., & Zona, F. (2011). Dimensions of CEO–board relations. Journal of Management Studies, 48(8), 1892–1923.

    Article  Google Scholar 

  • Corbetta, G., & Salvato, C. A. (2004). Self-serving or self-actualizing? Models of man and agency costs in different types of family firms: A commentary on “Comparing the agency costs of family and non-family firms: Conceptual issues and exploratory evidence”. Entrepreneurship Theory & Practice, 28(4), 355–362.

    Article  Google Scholar 

  • Cuomo, F., Mallin, C., & Zattoni, A. (2016). Corporate governance codes: A review and research agenda. Corporate Governance: An International Review, 24(3), 222–241.

    Article  Google Scholar 

  • Cyert, R. M., & March, J. G. (1963). A behavioral theory of the firm. Englewoods Cliffs: Prentice-Hall.

    Google Scholar 

  • Davis, J., Schoorman, D., & Donaldson, L. (1997). Toward a stewardship theory of management. Academy of Management Review, 22, 20–47.

    Article  Google Scholar 

  • Desai, V. M. (2016). The behavioral theory of the (governed) firm: Corporate board influences on organizations’ responses to performance shortfalls. Academy of Management Journal, 59(3), 860–879.

    Article  Google Scholar 

  • Donaldson, L. (1990). The ethereal hand: Organizational economics and management theory. Academy of Management Review, 15(3), 369–381.

    Article  Google Scholar 

  • Donaldson, L., & Davis, J. H. (1991). Stewardship theory or agency theory: CEO governance and shareholder returns. Australian Journal of Management, 16(1), 49–64.

    Article  Google Scholar 

  • Donaldson, L., & Davis, J. H. (1994). Boards and company performance-research challenges the conventional wisdom. Corporate Governance: An International Review, 2, 151–160.

    Article  Google Scholar 

  • Eisenhardt, K. M. (1989). Agency theory: An assessment and review. Academy of Management Review, 14, 57–74.

    Article  Google Scholar 

  • Fama, E. F. (1980). Agency problems and the theory of the firm. The Journal of Political Economy, 88, 288–307.

    Article  Google Scholar 

  • Fama, E. F., & Jensen, M. C. (1983). Agency problems and residual claims. The Journal of Law and Economics, 26(2), 327.

    Article  Google Scholar 

  • García-Ramos, R., & García-Olalla, M. (2014). Board independence and firm performance in Southern Europe: A contextual and contingency approach. Journal of Management & Organization, 20(3), 313–332.

    Google Scholar 

  • Garner, J., Kim, T. Y., & Kim, W. Y. (2017). Boards of directors: A literature review. Managerial Finance, 43(10), 1189–1998.

    Article  Google Scholar 

  • Hillman, A. J., & Dalziel, T. D. (2003). Boards of directors and firm performance: Integrating agency and resource dependence perspectives. The Academy of Management Review, 28, 383–396.

    Article  Google Scholar 

  • Hillman, A. J., Withers, M. C., & Collins, B. J. (2009). Resource dependence theory: A review. Journal of Management, 35(6), 1404–1427.

    Article  Google Scholar 

  • Jaskiewicz, P., & Klein, S. B. (2007). The impact of goal alignment on board composition and board size in family businesses. Journal of Business Research, 60(10), 1080–1108.

    Article  Google Scholar 

  • Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305–360.

    Article  Google Scholar 

  • Kaczmarek, S. (2017). Rethinking board diversity with the behavioural theory of corporate governance: Opportunities and challenges for advances in theorising. Journal of Management & Governance, 21(4), 879–906.

    Article  Google Scholar 

  • Keay, A. (2017). Stewardship theory: Is board accountability necessary? International Journal of Law and Management, 59(6), 1292–1314.

    Article  Google Scholar 

  • Korac-Kakabadse, N., Kakabadse, A. K., & Kouzmin, A. (2001). Board governance and company performance: Any correlations? Corporate Governance, 1(1), 24–30.

    Article  Google Scholar 

  • Krause, R., Semadeni, M., & Cannella, A. A. (2014). CEO duality: A review and research agenda. Journal of Management, 40, 256–286.

    Article  Google Scholar 

  • Le Breton-Miller, I., & Miller, D. (2009). Agency vs. stewardship in public family firms: A social embeddedness reconciliation. Entrepreneurship Theory & Practice, 33(6), 1169–1191.

    Article  Google Scholar 

  • Le Breton-Miller, I., Miller, D., & Lester, R. H. (2011). Stewardship or agency? A social embeddedness reconciliation of conduct and performance in public family businesses. Organization Science, 22(3), 704–721.

    Article  Google Scholar 

  • Li, H., Terjesen, S., & Umans, T. (2018). Corporate governance in entrepreneurial firms: A systematic review and research agenda. Small Business Economics, 1–32.

    Google Scholar 

  • Martin, J. A., & Butler, F. C. (2017). Agent and stewardship behavior: How do they differ?. Journal of Management & Organization, 23(5), 633–646.

    Google Scholar 

  • Miller, D., Le Breton-Miller, I., & Scholnick, B. (2008). Stewardship Vs. Stagnation: An empirical comparison of small family and non-family businesses. Journal of Management Studies, 45(1), 51–78.

    Article  Google Scholar 

  • Muth, M. M., & Donaldson, L. (1998). Stewardship theory and board structure: A contingency approach. Corporate Governance: An International Review, 6(1), 5–28.

    Article  Google Scholar 

  • Nicholson, G. J., & Kiel, G. C. (2007). Can directors impact performance? A case-based test of three theories of corporate governance. Corporate Governance: An International Review, 15(4), 585–608.

    Article  Google Scholar 

  • Nielsen, B. B., & Nielsen, S. (2013). Top management team nationality diversity and firm performance: A multilevel study. Strategic Management Journal, 34(3), 373–382.

    Article  Google Scholar 

  • Pearce, J. A., & Zahra, S. A. (1992). Board composition from a strategic contingency perspective. Journal of Management Studies, 29, 411–438.

    Article  Google Scholar 

  • Pfeffer, J. (1972). Size and composition of corporate boards of directors: The organization and its environment. Administrative Science Quarterly, 17, 218–229.

    Article  Google Scholar 

  • Pfeffer, J., & Salancik, G. R. (1978). The external control of organisations. New York: Harper & Row.

    Google Scholar 

  • Smith, A. (1776). The wealth of nations. Edited by Edwin Cannan, 1904. Reprint edition 1937. New York: Modern Library.

    Google Scholar 

  • Stano, M. (1976). Monopoly power, ownership control, and corporate performance. The Bell Journal of Economics, 7, 672–679.

    Article  Google Scholar 

  • Terjesen, S., Couto, E. B., & Francisco, P. M. (2016). Does the presence of independent and female directors impact firm performance? A multi-country study of board diversity. Journal of Management & Governance, 20(3), 447–483.

    Article  Google Scholar 

  • Wernerfelt, B. (1984). A resource-based view of the firm. Strategic Management Journal, 5(2), 171–180.

    Article  Google Scholar 

  • Wiseman, R. M., & Gomez-Mejia, L. R. (1998). A behavioral agency model of managerial risk taking. Academy of Management Review, 23(1), 133–153.

    Article  Google Scholar 

  • Wiseman, R. M., Cuevas-Rodríguez, G., & Gomez-Mejia, L. R. (2012). Towards a social theory of agency. Journal of Management Studies, 49(1), 202–222.

    Article  Google Scholar 

  • Withers, M. C., Hillman, A. J., & Cannella, A. A. (2012). A multidisciplinary review of the director selection literature. Journal of Management, 38(1), 243–277.

    Article  Google Scholar 

  • Zahra, S., & Pearce, J. (1989). Boards of directors and corporate financial performance: A review and integrative model. Journal of Management, 15, 291–334.

    Article  Google Scholar 

  • Zald, M. N. (1969). The power and functions of boards of directors: A theoretical synthesis. American Journal of Sociology, 75, 97–111.

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Department of Business Administration, University of Cantabria, Santander, Spain

    Rebeca García-Ramos & Belén Díaz Díaz

Authors
  1. Rebeca García-Ramos
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Belén Díaz Díaz
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Rebeca García-Ramos .

Editor information

Editors and Affiliations

  1. London Metropolitan University, Guildhall Faculty of Business and Law London Metropolitan University, London, UK

    Samuel Idowu

  2. Cologne Business School, Ingolstadt, Germany

    René Schmidpeter

  3. College of Business, Loyola University New Orleans, New Orleans, LA, USA

    Nicholas Capaldi

  4. International Training Centre of the IL, International Labor Organization, Turin, Italy

    Liangrong Zu

  5. Department of Economics, Society and Politics, University of Urbino Carlo Bo, Urbino, Italy

    Mara Del Baldo

  6. Instituto Politécnico da Guarda, Guarda, Portugal

    Rute Abreu

Section Editor information

  1. No affiliation provided

    Dirk Reiser

Rights and permissions

Reprints and permissions

Copyright information

© 2020 Springer Nature Switzerland AG

About this entry

Check for updates. Verify currency and authenticity via CrossMark

Cite this entry

García-Ramos, R., Díaz, B.D. (2020). Theoretical Paradigms of the Board of Directors. In: Idowu, S., Schmidpeter, R., Capaldi, N., Zu, L., Del Baldo, M., Abreu, R. (eds) Encyclopedia of Sustainable Management. Springer, Cham. https://doi.org/10.1007/978-3-030-02006-4_485-1

Download citation

  • DOI: https://doi.org/10.1007/978-3-030-02006-4_485-1

  • Received:

  • Accepted:

  • Published:

  • Publisher Name: Springer, Cham

  • Print ISBN: 978-3-030-02006-4

  • Online ISBN: 978-3-030-02006-4

  • eBook Packages: Springer Reference Business and ManagementReference Module Humanities and Social SciencesReference Module Business, Economics and Social Sciences

Publish with us

Policies and ethics

Search

Navigation