Melbourne Accounting Research Seminar - Professor Paul Healy

Melbourne Accounting Research Seminar

Deans Boardroom, level 12, The Spot
198 Berkeley St, Carlton

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Mario Schabus

mario.schabus@unimelb.edu.au

T: +61 3 8344 0218

Professor Paul Healy from Harvard Business School will present a MARS seminar.

Topic: Directors' Perceptions of Board Governance and Operational Effectiveness

Abstract: Prior research indicates that team performance is related to team member engagement and interactions, and to team management and governance. Yet these factors have not been amenable to study in the context of one important type of team, the corporate board. We address this gap using data from 577 directors of U.S. public firms that responded to a survey we conducted in 2015-2016 and qualitative data from interviews of 75 directors. Our study explores the relation between director perceptions of their boards’ operations and their ratings of its effectiveness in firm governance. Most respondents perceived that their boards were highly effective in overseeing risk management, somewhat less effective in guiding and appraising strategy, and even less effective in management evaluation and selection. In reviewing board operations, respondents perceived that their boards had highly engaged members, highly functioning personal relationships (both between directors and between directors and management), and effective board meetings, but rated their boards lower on internal governance. Finally, we document a strong positive relation between all three board governance constructs and board operations and internal governance constructs.