Strategic Performance Information and Canadian Board Involvement in Strategy Related Issues: A Field Study

28 Pages Posted: 15 Jan 2012

See all articles by Anthony C. Atkinson

Anthony C. Atkinson

University of Waterloo

Natalia Kochetova

Saint Mary’s University - Sobey School of Business

Alan Webb

University of Waterloo - School of Accounting and Finance

Date Written: January 14, 2012

Abstract

This study contributes to the growing body of research examining the governance processes undertaken by Boards of public companies. Specifically, we investigate the Board’s role in developing, executing and monitoring strategy and the nature and extent of strategic performance information provided to Boards. We also examine directors’ perceptions of indicators of effective Board involvement in strategy-related issues. Despite calls for greater Board involvement in strategy, few studies have examined this issue in a Canadian setting. To address this gap in the literature, we conducted 18 field interviews with directors (n = 14) of Canadian public companies and other governance experts (e.g., former directors, consultants). Our findings indicate Boards are commonly involved in monitoring strategy but there is more variation regarding the extent to which they also play an advisory role in developing and executing strategy. We also find that while Boards typically receive key performance indicators (financial and non-financial) there is limited provision of more strategy-based performance information such as balanced scorecards. Finally, our interviewees indicated that indicators of effective Board involvement in strategy should focus on process measures (e.g., nature and extent of strategy discussions) rather than objective outcomes such as financial performance. Our descriptive, field-based evidence provides a better understanding of Canadian Board involvement in strategy-related issues and suggests important areas for future empirical research.

Keywords: strategy, governance, directors

Suggested Citation

Atkinson, Anthony Alan and Kochetova, Natalia and Webb, Alan, Strategic Performance Information and Canadian Board Involvement in Strategy Related Issues: A Field Study (January 14, 2012). CAAA Annual Conference 2012. Available at SSRN: https://ssrn.com/abstract=1985228 or http://dx.doi.org/10.2139/ssrn.1985228

Anthony Alan Atkinson

University of Waterloo ( email )

DeGroote School of Business
Waterloo, Ontario N2L 3G1
Canada
519-888-4567 ext. 6514 (Phone)
519-888-7562 (Fax)

Natalia Kochetova

Saint Mary’s University - Sobey School of Business ( email )

SB 318, Dept. of Accounting
Sobey School of Business, Saint Mary's University
Halifax, Nova Scotia B3H 3C3
Canada
902-420-5800 (Phone)
902-420-5011 (Fax)

Alan Webb (Contact Author)

University of Waterloo - School of Accounting and Finance ( email )

200 University Avenue West
Waterloo, Ontario N2L 3G1 N2L 3G1
Canada

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