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Executive Board Chairs: Examining the Performance Consequences of a Corporate Governance Hybrid
Journal article   Open access   Peer reviewed

Executive Board Chairs: Examining the Performance Consequences of a Corporate Governance Hybrid

Robert Langan, Ryan Krause and Markus Menz
Journal of management, Vol.49(7), pp.2218-2253
09/01/2023
DOI: 10.1177/01492063221102394
PMCID: PMC10394401
PMID: 37539045
url
https://doi.org/10.1177/01492063221102394View
Published (Version of record) Open Access

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.
 Business Business & Economics Management Psychology Psychology, Applied Social Sciences

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