Power and trust in board-CEO relationships

Document Type

Article

Publication Date

8-1-2013

Abstract

In this paper we develop and test a theoretical model that reduces relational risks to solve the puzzle of conflicting task requirements imposed on boards of directors in listed companies. Doing so unites two seemingly conflicting tasks-board control and service tasks-through examining relational risks between the board and the CEO. We also present two mechanisms that could reduce relational risks. One is board power over the CEO, and the other board trust in the CEO. Practitioners could apply these two mechanisms to achieve better performance of board control and service tasks simultaneously. We test hypotheses using 441 survey responses collected in 2005. The result shows a good fit between the model and survey data, indicating examining relational risks is a rewarding approach to understanding conflicting board task performance, and board control over the CEO and board trust in the CEO are two effective mechanisms to reduce relational risks. © 2011 Springer Science+Business Media, LLC.

Publication Title

Journal of Management and Governance

Volume

17

Issue

3

First Page

745

Last Page

765

Digital Object Identifier (DOI)

10.1007/s10997-011-9188-z

ISSN

13853457

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