How Do Multiple Boards Provide Operating Advantages?

27 Pages Posted: 1 Dec 2010 Last revised: 10 May 2011

Shann Turnbull

International Institute for Self-Governance; Sustainable Money Working Group; New Garden City Alliance

Date Written: February 28, 2011

Abstract

Research Question/Issue: How do organisations with multiple boards provide operating advantages?

Research Findings/Insights: Multiple boards allow: (i) avoidance of absolute power to mitigate hubris and corruption of board members and the organisation; (ii) distributing power to allow and value contrary views to provide checks and balances; (iii) simplification of decision making-labour to reduce errors; (iv) integrating governance functions with management to spread participation and constructive involvement of stakeholders; (v) multiple sources of feed back information for increasing knowledge to improve: (a) the detection of errors in decision-making, communications and control and (b) the integrity of decision making, and (vi) adoption of nature’s self-regulating architecture to reduce litigation and the burden of government interventions;.

Theoretical/Academic Implications: Transaction Byte Analysis (TBA), unlike Transaction Cost Economics provides a way to empirically evaluate and compare differences in the communication and control architecture of organizations and living systems. TBA explains the competitive advantages of an ecological form of network governance found in nature and illustrated by multiple boards in Mondragon firms. TBA explains why evolution developed contrary behavior in humans to create “tensegrity” for sustaining their existence in uncertain environments on a self-regulating basis. Tensegrity is a feature of “holons” and “holarchy” illustrated in Mondragon and explicated by the science of governance. TBA is not inconsistent with other governance theories while providing answers to the research question.

Practitioner/Policy Implications: Provide lawmakers, regulators, executives, investors and/or other stakeholders, ways to improve operations of organisations and their regulators while reducing the size, cost and intrusiveness of government.

Keywords: Corporate Governance, Ecological Governance, Multiple Boards, Tensegrity, Transaction Byte Analysis.

JEL Classification: B41, C81, D23, D70, D80, G30, K22

Suggested Citation

Turnbull, Shann, How Do Multiple Boards Provide Operating Advantages? (February 28, 2011). Finance and Corporate Governance Conference 2011 Paper. Available at SSRN: https://ssrn.com/abstract=1706069 or http://dx.doi.org/10.2139/ssrn.1706069

Shann Turnbull (Contact Author)

International Institute for Self-Governance ( email )

PO Box 266 Woollahra
Cell: +61418222378
Sydney, New South Wales 1350
Australia
+61293278487 (Phone)
+61280655905 (Fax)

HOME PAGE: http://independent.academia.edu/ShannTurnbull/CurriculumVitae
SKYPE: shann.turnbull

Sustainable Money Working Group ( email )

Holyoake House
Hanover Street
Manchester, M60 0AS
United Kingdom

New Garden City Alliance ( email )

113 Guinness Court
Snowsfields
London, UK, hello@gardencities.org.uk SE1 3TA
United Kingdom
+44 207 378 1902 (Phone)

HOME PAGE: http://www.gardencities.org.uk

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