Toward a Behavioral Theory of Boards and Corporate Governance

13 Pages Posted: 9 Jun 2009

See all articles by Hans van Ees

Hans van Ees

University of Groningen

Jonas Gabrielsson

Lund University - School of Economics and Management

Morten Huse

Norwegian School of Management (BI) - Department of Innovation and Economics; MH Management Consultants; University of Witten/Herdecke; BI Norwegian Business School

Abstract

A coherent alternative to an economic approach of corporate governance is missing. In this paper we take steps towards developing a behavioral theory of boards and corporate governance.

Building upon concepts such as political bargaining, routinization of decision making, satisficing, and problemistic search, a behavioral theory of boards and corporate governance will focus more on (1) interactions and processes inside and outside the boardroom; (2) the fact that decision making is made by coalitions of actors and objectives are results of political bargaining; and (3) the notion that not only conflicting, but also cooperating, interests are parts of the boards' decision making and control over firm resources.

The consequences are a new research agenda for boards and corporate governance. The agenda will focus on actual instead of stylized descriptions of board behavior. In a behavioral perspective the emphasis on problems of coordination, exploration, and knowledge creation may dominate over problems of conflict of interest, exploitation, and the distribution of value. A future research agenda based on a behavioral framework calls for novel and adventurous research designs.

A behavioral theory of boards and corporate governance will be closer to actual board behavior than the traditional economic approach and research about boards and corporate governance may thus become more actionable for practitioners.

Suggested Citation

van Ees, Hans and Gabrielsson, Jonas and Huse, Morten, Toward a Behavioral Theory of Boards and Corporate Governance. Corporate Governance: An International Review, Vol. 17, No. 3, pp. 307-319, May 2009, Available at SSRN: https://ssrn.com/abstract=1416359 or http://dx.doi.org/10.1111/j.1467-8683.2009.00741.x

Hans Van Ees (Contact Author)

University of Groningen ( email )

Department of Economics
P.O.Box 800
9700 AH Groningen
Netherlands

Jonas Gabrielsson

Lund University - School of Economics and Management ( email )

Tycho Brahes väg 1,
S-220 07 Lund, 223 63
Sweden

HOME PAGE: http://www.circle.lu.se/html/person.aspx?ID=81

Morten Huse

Norwegian School of Management (BI) - Department of Innovation and Economics ( email )

P.O. Box 580
N-1302 Sandvika
Norway

MH Management Consultants ( email )

Butterudveien 32
N 1339 Vøyenenga
Vøyenenga
Norway

HOME PAGE: http://www.boardsandwine.net

University of Witten/Herdecke ( email )

Alfred-Herrhausen-Straße 50
Witten, 58448
Germany

BI Norwegian Business School ( email )

Nydalsveien 37
Oslo, 0442
Norway

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