Rethinking Directors' Effectiveness: The Development and Empirical Analysis of a Novel Model

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dc.contributor.authorCalvano da Silva, Felipeen
dc.contributor.committeechairSchnatterly, Karen Annen
dc.contributor.committeememberHunt, Richard A.en
dc.contributor.committeememberKumar, Pankajen
dc.contributor.committeememberTownsend, Daviden
dc.contributor.departmentManagementen
dc.date.accessioned2022-06-22T16:31:14Zen
dc.date.available2022-06-22T16:31:14Zen
dc.date.issued2022-04-01en
dc.description.abstractThe purpose of this dissertation is to introduce and empirically test a new theoretical perspective for assessing board effectiveness. Although the ability-motivation models provide a fruitful foundation in developing the characteristics that influence directors' job effectiveness, there are limitations this these models. First, the directors' ability and motivation dimensions are not clear, as existing conceptualizations are fungible and provide little clarity for theoretical and empirical research. Second, the ability-motivation models overlook several characteristics that are known to influence job performance but do not fit within the current dimensions. Finally, the current studies implicitly assume that all directors on the board have the same opportunity to monitor and advise in every domain. Therefore, I integrate the corporate governance literature on board effectiveness and the social psychology literature on job performance and propose that boards' effectiveness is a function of individual directors' capacity, engagement, and opportunity. This dissertation offers several contributions. First, I propose a theoretical model that illuminates and extends the core dimensions (i.e., capacity, engagement, and opportunity) of directors' effectiveness. The core dimensions of the model in my dissertation provide a much-needed conceptual clarity and coherence to the constructs that influence directors' effectiveness, which supports the development of stronger theory of directors' effectiveness. Second, by exploring the role of opportunity, I challenge one major assumption of the corporate governance field that all directors on the board have the same responsibility to monitor and advise in all domains. Third, the dissertation begins to shed light to the 'black box' of boards of directors by exploring how boards might enable directors to exert their full potential regarding their board functions.en
dc.description.abstractgeneralBoard of directors are considered by practitioners as one of the most important corporate governance mechanisms to monitor and advise the CEO and other executives of the firm. Nonetheless, boards often fail in fulfilling these roles. This is exemplified by the constant news regarding organization misconduct and strategic failures. Therefore, the question of when and how directors can effectively perform their board's duties remain answered. In my dissertation I propose that directors must have high levels of capacity, engagement, and opportunity at the same time in order to monitor and advise effectively. Specifically, I emphasize the importance of appropriately matching directors to a position in which they can leverage their capacity and engagement. Boards are pressured to constantly evaluate their capabilities; thus, boards might use the insights of this study to appropriately evaluate and adjust the responsibilities of their directors. Furthermore, investors might use our proposed model to externally evaluate if the boards of the firms in which they are investing are structured in a way that they can mitigate misconduct which could greatly impact their investment outcome. Finally, policy makers can rely on these criteria (capacity-engagement-opportunity) to create board regulations to improve monitoring effectiveness.en
dc.description.degreeDoctor of Philosophyen
dc.format.mediumETDen
dc.identifier.othervt_gsexam:34100en
dc.identifier.urihttp://hdl.handle.net/10919/110888en
dc.language.isoenen
dc.publisherVirginia Techen
dc.rightsCreative Commons Attribution 4.0 Internationalen
dc.rights.urihttp://creativecommons.org/licenses/by/4.0/en
dc.subjectStrategic leadershipen
dc.subjectcorporate governanceen
dc.subjectboard of directorsen
dc.subjectorganization misconducten
dc.subjectmergers and acquisitionsen
dc.titleRethinking Directors' Effectiveness: The Development and Empirical Analysis of a Novel Modelen
dc.typeDissertationen
thesis.degree.disciplineBusiness, Managementen
thesis.degree.grantorVirginia Polytechnic Institute and State Universityen
thesis.degree.leveldoctoralen
thesis.degree.nameDoctor of Philosophyen

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