Are Boards Designed to Fail? The Implausibility of Effective Board Monitoring

Steven Boivie, Michael K. Bednar, Ruth V. Aguilera, Joel L. Andrus

Research output: Contribution to journalReview articlepeer-review

Abstract

Abstract: In this review, we challenge the idea that directors are well positioned to be effective monitors of management. Moving beyond the logic of incentives and ability, we conceptualize a model based on the premise of boards as groups of individuals obtaining, processing and sharing information and explain how variation in information-processing demands at the director, board and firm level may challenge effective monitoring. We draw on multiple theoretical perspectives to identify these barriers to effective board monitoring. Our goal in reviewing these barriers is to help us take stock of existing research in corporate governance and to better explain board behavior beyond traditional agency and resource dependency accounts. We also aim to uncover gaps in the conceptual and empirical research and suggest areas of fruitful future research.

Original languageEnglish (US)
Pages (from-to)319-407
Number of pages89
JournalAcademy of Management Annals
Volume10
Issue number1
DOIs
StatePublished - Jan 1 2016

ASJC Scopus subject areas

  • Business and International Management
  • Organizational Behavior and Human Resource Management

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