Executive Board Chairs matter, a new study finds
The study in press at the Journal of Management reveals that an executive board chair position can generate a performance advantage by resolving the trade-off between independent oversight and involvement in strategy. The study is co-authored by former GSEM Senior Research Associate Dr. Robert Langan, Texas Christian AV短视频 Professor Ryan Krause, and GSEM Professor and Dean Markus Menz. The study received funding from the Swiss National Science Foundation.
ABSTRACT
Traditional agency theory views the proper role of the board chair exclusively as providing independent oversight to monitor and control the CEO. Recently, firms have introduced innovations in board leadership that have confounded these theoretical expectations. One notable innovation is the executive board chair, a corporate governance hybrid responsible for both oversight and strategic decision-making, challenging agency theory's prescription that the two activities remain separate. In this study, we argue that an executive board chair position can resolve the trade-off between independent oversight and involvement in strategy and therefore generate a performance advantage. We also predict that, owing to the blurring of lines between the CEO and board chair roles that the executive board chair position creates, the relationship will be stronger the greater the need to monitor and control the CEO but weaker when organizational complexity and board leadership demands are greater. Analysis of S&P 1500 firms from 2003 to 2017 provides general support for our arguments.
The study is available open access:
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August 22, 20222022
