Board of director performance: a group dynamics perspective

Purpose This paper proposes mainly that boards of directors (BOD) are teams that share characteristics with many other kinds of teams. As a consequence, some of the factors that lead to board effectiveness are the same factors that lead to team effectiveness in general. By integrating the organizational behaviour literature on teams with the governance literature, a comprehensive model of BOD performance is proposed. Design/methodology/approach This conceptual paper proposes a model to assess the performance of a board and situates board performance as one input into firm performance. Findings This paper outlines the dynamic interplay between board characteristics, functionality and performance and proposes a comprehensive model, based largely on the group dynamics literature. Research limitations/implications Suggests that future research attempt to empirically address some (or all) of the items in the conceptual model. Acknowledges that operationalizing certain variables will prove challenging, but suggests that ethnographic accounts of how these variables (and potentially others) interact may be a valuable first step in more fully understanding board composition, functioning and performance. Practical implications It is argued that by extending traditional passive agency roles, BOD may be able to provide a wider range of contributions to enhance shareholder value. Originality/value This interdisciplinary paper integrates the group dynamics literature with the governance literature to propose a comprehensive model of BOD performance.