Boards of directors are coming under increasing scrutiny in terms of their contribution in monitoring and controlling management, particularly in the wake of high-profile corporate frauds and failures, and also their potential to add value to organisational performance through involvement in the strategy process and through building relationships with key investors. Despite the importance of these issues, not only to organisations, but also arguably to national competitiveness, the nature of board activity remains largely a black box, clouded by prescriptions, prejudices, and half-truths. This ... More

Boards of directors are coming under increasing scrutiny in terms of their contribution in monitoring and controlling management, particularly in the wake of high-profile corporate frauds and failures, and also their potential to add value to organisational performance through involvement in the strategy process and through building relationships with key investors. Despite the importance of these issues, not only to organisations, but also arguably to national competitiveness, the nature of board activity remains largely a black box, clouded by prescriptions, prejudices, and half-truths. This book responds to calls for greater scrutiny of boards of directors with an in-depth examination of directors of organisations in the United Kingdom, drawing on the accounts of directors themselves as to their roles, influence, and the potential and limits to their power. The study shows that boards, in many cases, are far more than passive rubber stamps for management and that non-executive directors are encouraged to act as trusted advisers to the executives and the chief executive officer, rather than solely monitors of executive activity. Boards are important mechanisms in maintaining the strategic framework of the organisation through setting the boundaries of organisational activity. The potential of the non-executive board members to fulfil such a mandate depends on a number of factors, including ability, willingness to engage with the organisational issues, and the degree of knowledge they have relevant to the host firm. Above all, the degree of trust built between members of the board, and between the board and key external constituencies, is at the heart of effective board behaviour.