Board directors see their role as CEO supporters, not monitors: Research

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There is a broad perception that boards of directors see monitoring of senior executives, including the CEO, as a primary part of their job description. However, recent research finds these boards instead view their jobs as supporting executives and being their strategic partners.

In a study published June 24 in Strategic Management Journal, management professors from College Station-based Texas A&M University, Athens-based University of Georgia and Tempe-based Arizona State University conducted extensive interviews with current directors and executives to gain insights into how they view their role. Their main finding: Boards view themselves as CEO supporters.

"Our analysis of these interviews suggests that directors view their CEOs as generally acting in the best interests of their firms," the researchers wrote. "In turn, directors consider strategically collaborating with their CEOs as critical to their board service. Recognizing the unique perspectives that directors bring to the boardroom has important implications for governance practices directed toward ensuring overall board effectiveness."

The study involved extensive interviews with 48 corporate directors, who serve on the boards of more than 140 companies. Some of the directors were also executives at other companies. Two executives who have never served as directors also participated in the study.

One of the study's authors — Steve Boivie, PhD, a professor in the Mays Business School at Texas A&M University — wrote in an article for The Conversation, a nonprofit, that interviews provided more than 1,000 transcribed pages, which were coded and analyzed by researchers.

"Our overarching finding was that directors generally said they viewed their jobs as primarily supporting managers, not monitoring them. In fact, we were surprised by just how uniform this sentiment was among directors, regardless of demographics like gender or time spent on a board," wrote Dr. Boivie.

He said this means boards rarely seek to go against management decisions and instead "seek to become partners with executives and provide input and improve decision-making. Many directors said that the best way to protect shareholder value or help their company thrive was by collaborating with the chief executive officer."

Dr. Boivie said interviewees also indicated they tend to see their jobs as a way to give back by serving on their boards, and they don't want to monitor CEOs.

"We interpreted their view as basically: Either trust the chief executive officer and give him or her your total support or fire the CEO and hire someone you can trust," he said.

Realizing the importance of ensuring the organization has great leadership in place was also among the 10 signs your board has a strong pulse detailed by Becker's in August.

Read more about the study here

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