Nose In, Fingers Out: Essays on Board-Governance Effectiveness

Boards of directors play a crucial role in the governance of organizations. Board-governance effectiveness therefore is a burgeoning research area. In finding an answer to the question what constitutes good corporate governance, much of the governance literature has been dominated by principal-agent theoretic reasoning. Unfortunately, this has generally failed to materialize in unequivocal findings. The paucity of consistent empirical findings has prompted calls for a richer and more nuanced behaviorally oriented understanding of boards.
In this dissertation, I respond to these calls for such a more nuanced understanding of board-governance effectiveness by providing a more socialized, socio-psychological interpretation of what drives board functioning behind the closed doors of the boardroom. Specifically, the social embeddedness perspective I propose emphasizes that boards are social entities and that directors are individuals operating within these social entities. That is, by examining director behavior in a socially situated context and in integrating agency-theoretic insights with a more socialized perspective on boards, this dissertation aims to provide a more in-depth understanding of board functioning. In so doing, a significant contribution of this dissertation is that it offers insights that prompt a rethink of several aspects of the current (under-socialized) perspective on what drives board-governance effectiveness.