Skip to main content Accessibility help

We use cookies to distinguish you from other users and to provide you with a better experience on our websites. Close this message to accept cookies or find out how to manage your cookie settings.

Close cookie message
×
Hostname: page-component-5b777bbd6c-2c8nx Total loading time: 0 Render date: 2025-06-18T19:21:44.132Z Has data issue: false hasContentIssue false

6 - The role of corporate governance and boards in organisational performance

Published online by Cambridge University Press:  05 July 2011

By
Naomi Chambers  and
Chris Cornforth
Edited by
Kieran Walshe ,
Gill Harvey  and
Pauline Jas
Naomi Chambers
Affiliation:
Manchester Business School
Chris Cornforth
Affiliation:
Open University Business School
Kieran Walshe
Affiliation:
Manchester University
Gill Harvey
Affiliation:
Manchester University
Pauline Jas
Affiliation:
University of Nottingham
Get access

Summary

Introduction

For more than two decades, successive UK governments have been concerned with modernising the delivery of public services and seeking performance improvements. As part of this drive, corporate governance arrangements across the sector have been reformed and much greater attention has been paid to the training, development and support of those serving on governing bodies and boards. An underlying assumption of these shifts in policy is that improvements in corporate governance arrangements, and in particular the working of boards, will lead to improvements in effectiveness. This chapter examines what evidence there is to support that assumption.

Before proceeding it is important to be clear about what we mean by corporate governance. The term governance has become an important concept in a variety of different disciplinary and practice arenas including management, public administration, public policy and politics. It has its roots in a Latin word meaning to steer or give direction. As Kooiman (1999) notes in a useful review article, the term is used in a number of different ways which can lead to confusion. He suggests one useful way of distinguishing between different usages is in terms of levels of analysis. The focus here is on the organisational level, and the term corporate governance will be used to refer to the structures, systems and processes concerned with ensuring the overall direction, control and accountability of an organisation.

Type
Chapter
Information
Connecting Knowledge and Performance in Public Services
From Knowing to Doing
 , pp. 99 - 127
Publisher: Cambridge University Press
Print publication year: 2010

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Book purchase

Temporarily unavailable

References

Abbott, S., Smith, R., Proctor, S. and Iacovou, N. (2008). ‘Primary Care Trusts: What is the Role of Boards?’, Public Policy and Administration 23(1): 43–59.CrossRefGoogle Scholar
Addcott, R. (2008). ‘Models of Governance and the Changing Role of the Board in the “Modernised” UK Health Sector’, Journal of Health Organisation and Management 22(2): 147.CrossRefGoogle Scholar
,Audit Commission (2003). Corporate Governance: Improvement and Trust in Local Public Services. London: Audit Commission.Google Scholar
Berle, A. A. and Means, G. C. (1932). The Modern Corporation and Private Property. New York: Macmillan.Google Scholar
Boeker, W. and Goodstein, J. (1991). ‘Organisation Performance and Adaptation: Effects of Environment and Performance on Changes in Board Composition’, Academy of Management Journal 34(4): 805–26.Google Scholar
Boyne, G. A. (2003). ‘Sources of Public Service Improvement: A Critical Review and Research Agenda’, Journal of Public Administration Research and Theory 13: 367–94.CrossRefGoogle Scholar
Bullivant, J., Deighan, M., Stoten, B. and Corbett-Nolan, A. (2008). Integrated Governance II: Governance Between Organisations. London: Institute of Healthcare Management.Google Scholar
,Cadbury Report (1992). The Financial Aspects of Corporate Governance. London: Gee & Co.Google Scholar
,Centre for Public Scrutiny (2006). Strengthening Public Accountability on the School Governing Body. London: CfPS.Google Scholar
Chait, R., Holland, T. and Taylor, B. (1993). The Effective Board of Trustees. Phoenix, AZ: Oryx Press.Google Scholar
Chambers, N. (2008). Grumpy Boards. www.hsj.co.uk/naomi-chambers-on-grumpy-boards/1804238.article (accessed on 29 August 2008).
Chambers, N. and Higgins, J. (2005). Building a Framework for Developing Effective NHS Boards. Centre for Public Policy and Management, University of Manchester.Google Scholar
Cornforth, C. (ed.) (2003). The Governance of Public and Non-profit Organizations: What Do Boards Do?London: Routledge.CrossRef
Dalton, D., Daily, C., Ellstr, A. and and Johnson, J. (1998). ‘Meta-analytic Reviews of Board Composition, Leadership Structure and Financial Performance’, Strategic Management Journal 19(3): 269–90.3.0.CO;2-K>CrossRefGoogle Scholar
Davies, C.et al. (2005). Links Between Governance, Incentives and Outcomes: A Review of the Literature. National Co-ordinating Centre for NHS Service Delivery and Organisation R&D.
Davies, H. T. O., Mannion, R., Jacobs, R., Powell, A. and Marshall, M. (2007). ‘Exploring the Relationship Between Senior Management Team Culture and Hospital Performance’, Medical Care Research and Review 64(1): 46–65.CrossRefGoogle Scholar
Dean, C., Dyson, A., Gallannaugh, F., Howes, A. and Raffo, C. (2007). Schools, Governors and Disadvantage. York: The Joseph Rowntree Foundation.Google Scholar
,Department of Health (2004). Code of Conduct: Code of Accountability in the NHS (2nd rev. edn.). London: DH.Google Scholar
Donaldson, L. and Davis, J. (1991). ‘Stewardship Theory or Agency Theory: CEO Governance and Shareholder Returns’, Australian Journal of Management 16(1): 49–64.CrossRefGoogle Scholar
Dowling, B., Powell, M. and Glendinning, C. (2004). ‘Conceptualising Successful Partnerships’, Health and Social Care in the Community 12(4): 309–17.CrossRefGoogle Scholar
Edwards, C. and Cornforth, C. (2003). ‘The Strategic Contribution of Boards’, in Cornforth, C. (ed.).
Eising, R. (2004). ‘Multilevel Governance and Business Interests in the European Union’, Governance 17(2): 211–45.CrossRefGoogle Scholar
Emslie, S. (2007). Exploring the Factors that Measure the Performance of Boards of Directors of NHS Foundation Trusts and the Association Between Board and Organisational Performance. http://governance.typepad.com/healthcare_governance/files/ft_study_sep_2007.pdf (accessed 20 October 2008).
Farrell, C. (2005). ‘Governance in the UK Public Sector: The Involvement of the Governing Boards’, Public Administration 83(1): 89–110.CrossRefGoogle Scholar
Farrell, C. and Law, J. (1997). The Accountability of School Governing Bodies Paper, delivered at the British Educational Research Association Annual Conference, September. www.leeds.ac.uk/educol/documents (accessed 21 September 2008).
Ferlie, E., Lynn, L. and Pollitt, C. (eds.) (2005). The Oxford Handbook of Public Management. Oxford University Press.Google Scholar
Ferlie, E., Ashburner, L., Fitzgerald, L. and Pettigrew, A. (1996). New Public Management in Action. Oxford University Press.CrossRefGoogle Scholar
Forbes, D. P. and Milliken, F. J. (1999). ‘Cognition and Corporate Governance: Understanding Boards of Directors as Strategic Decision-making Groups’, Academy of Management Review 24: 489–505.CrossRefGoogle Scholar
Gabrielsson, J. and Winlund, H. (2000). ‘Boards of Directors in Small and Medium-sized Industrial Firms: Examining the Effects of the Board's Working Style on Board Task Performance’, Entrepreneurship and Regional Development 12(4): 311–30.CrossRefGoogle Scholar
Garratt, B. (1997). The Fish Rots from the Head – the Crisis in our Boardrooms: Developing the Crucial Skills of the Competent Director. London: HarperCollins.Google Scholar
Glasby, J. (2006). ‘Managing in Partnership With Other Agencies’, in Walshe, K. and Smith, J. (eds.), Healthcare Management. Maidenhead: Open University Press.Google Scholar
Greasley, R. and John, P. (2008). ‘Does Strong Political Leadership Have a Performance Pay-off?’, conference paper at Designing Democratic Institutions: The Political Science and Political Economy Conference, LSE, 13–14 May, London.
Griffiths, R. (1983). Report of the NHS Management Enquiry. London: HMSO.Google Scholar
Heracleous, L. (2008). ‘What is the Impact of Corporate Governance on Organisation Performance?’, Corporate Governance: An International Review 9(3): 165–73.CrossRefGoogle Scholar
Herman, E. S. (1981). Corporate Control, Corporate Power. New York: Cambridge University Press.Google Scholar
Herman, R. and Heimovics, R. (1990). ‘The Effective Nonprofit Executive: Leader of the Board’, Nonprofit Management and Leadership 1(2): 167–80.CrossRefGoogle Scholar
Herman, R. and Renz, D. (1997). ‘Multiple Constituencies and the Social Construction of Nonprofit Organisation Effectiveness’, Nonprofit and Voluntary Sector Quarterly 26: 185–206.CrossRefGoogle Scholar
Herman, R., Renz, D. and Heimovics, R. (1997). ‘Board Practices and Board Effectiveness in Local Nonprofit Organizations’, Nonprofit Management and Leadership 7(4): 373–85.CrossRefGoogle Scholar
Higgs, D. (2003). Review of the Role and Effectiveness of Non Executive Directors. London: The Stationery Office.Google Scholar
Hill, M. (2005). The Public Policy Process. Harlow: Pearson Education.Google Scholar
Hood, C. (2005). ‘Public Management: The Word, the Movement, the Science’, in Ferlie, E., Lynn, L. and Pollitt, C. (eds.).
Hung, H. (1998). ‘A Typology of the Theories of the Roles of Governing Boards’, Corporate Governance: An International Review 6(2): 101–12.CrossRefGoogle Scholar
Jas, P. and Skelcher, C. (2005). ‘Performance Decline and Turnaround in Public Organizations: A Theoretical and Empirical Analysis’, British Journal of Management 16: 195–210.CrossRefGoogle Scholar
Keasey, K., Thompson, S. and Wright, M. (1997). ‘The Corporate Governance Problem – Competing Diagnoses and Solutions’, in Corporate Governance: Economic and Financial Issues. Oxford University Press, pp. 1–17.Google Scholar
Klijn, E.-H. (2005). ‘Networks and Inter-organisational Management’, in Ferlie, E., Lynn, L. and Pollitt, C. (eds.).
Kooiman, J. (1999). ‘Socio-political Governance: Overview, Reflections, Design’, Public Management 1(1): 67–92.CrossRefGoogle Scholar
Lee, S.-Y. D.et al. (2008). ‘An Empirical Taxonomy of Hospital Governing Board Roles’, Health Services Research 43(4): 1223–43.CrossRefGoogle Scholar
Lorsch, J. W. and Clark, R. C. (2008). ‘Leading from the Boardroom’, Harvard Business Review, April: 105–11.Google Scholar
Lorsch, J. W. and MacIver, E. (1989). Pawns or Potentates: The Reality of America's Corporate Boards. Boston, MA: Harvard Business School Press.Google Scholar
Mace, M. L. (1971). Directors: Myth or Reality. Cambridge, MA: Harvard Business School Press.Google Scholar
McDonagh, K. and Limbdenstock, R. (2006). ‘Hospital Governing Boards: A Study of Their Effectiveness in Relation to Organisational Performance’, Journal of Healthcare Management 51(6): 377–89.CrossRefGoogle Scholar
Monitor, (2008). NHS Foundation Trusts: Review and Consolidated Accounts 2007–8. London: The Stationery Office.Google Scholar
Moore, M. (1995). Creating Public Value: Strategic Management in Government. Harvard University Press.Google Scholar
Mordaunt, J. and Cornforth, C. (2004). ‘The Role of Boards in the Failure and Turnaround of Non-profit Organizations’, Public Money and Management, August: 227–34.CrossRefGoogle Scholar
Murray, V., Bradshaw, P. and Wolpin, J. (1992). ‘Power in and around Boards: A Neglected Dimension of Governance’, Nonprofit Management and Leadership 3(2): 165–82.CrossRefGoogle Scholar
Muth, M. M. and Donaldson, L. (1998). ‘Stewardship Theory and Board Structure: A Contingency Approach’, Corporate Governance 6(1): 5–28.CrossRefGoogle Scholar
Ogbanna, E. and Harris, L. (2000). ‘Leadership Style, Organisational Culture and Performance: Empirical Evidence from UK Companies’, International Journal of Human Resources Management 11: 766–88.CrossRefGoogle Scholar
Ostrower, F. and Stone, M. M. (2005). ‘Governance: Research Trends, Gaps and Prospects for the Future’, in Powell, W. and Steinberg, R. (eds.), The Nonprofit Sector, A Research Handbook (2nd edn.). New Haven, CT: Yale University Press.Google Scholar
Peck, E. (1995). ‘The Performance of an NHS Trust Board: Actors’ Accounts, Minutes and Observation', British Journal of Management 6: 135–56.CrossRefGoogle Scholar
Peck, E., Perri, 6, Gulliver, P. and Towell, D. (2004). ‘Why Do We Keep Meeting Like This? The Board as Ritual in Health and Social Care’, Health Services Management Research 17: 100–9.CrossRefGoogle Scholar
Perry, T. and Shivdasani, A. (2005). ‘Do Boards Affect Performance? Evidence from Corporate Restructuring’, Journal of Business 78(4): 1403–31.CrossRefGoogle Scholar
Peterson, R., Martorana, P., Smith, D. and Owens, P. (2003). ‘The Impact of CEO Personality on Top Team Dynamics: One Mechanism by Which Leadership Affects Organisation Performance’, Journal of Applied Psychology 88(5): 795–808.CrossRefGoogle Scholar
Pettigrew, A. and McNulty, T. (1995). ‘Power and Influence in and around the Boardroom’, Human Relations 48(8): 845–73.CrossRefGoogle Scholar
Pettigrew, A. and McNulty, T. (1998). ‘Sources and Uses of Power in the Boardroom’, European Journal of Work and Organizational Psychology 7(2): 197–214.Google Scholar
Pointer, D. (1999) Board Work: Governing Health Care Organisations. New York: Jossey-Bass.Google Scholar
Pollitt, C. (2005). ‘Decentralisation’, in Ferlie, E., Lynn, L. and Pollitt, C. (eds.).
Pounder, D., Ogawa and E. Adams, R. (1995). ‘Leadership as an Organisation-wide Phenomena (sic): Its impact on School Performance’, Educational Administration Quarterly 31(4): 564–88.CrossRefGoogle Scholar
Power, M. (1999). The Audit Society. Oxford University Press.CrossRefGoogle Scholar
,PricewaterhouseCoopers (2007). Academies Evaluation 4th Annual Report.
Pye, A. and Pettigrew, A. (2005). ‘Studying Board Context, Process and Dynamics: Some Challenges for the Future’, British Journal of Management 16 Special Issue: S27–S38.CrossRefGoogle Scholar
Rhodes, R. (1994). ‘The Hollowing Out of the State: The Changing Nature of Public Service in Britain’, Political Quarterly 65(2): 138–51.CrossRefGoogle Scholar
Roberts, J., McNulty, T. and Stiles, P. (2005). ‘Beyond Agency Conceptions of the Work of the Non-executive Director: Creating Accountability in the Boardroom’, British Journal of Management 16 Special Issue: S5–S26.CrossRefGoogle Scholar
Skelcher, C. (1998). The Appointed State: Quasi-governmental Organisations and Democracy. Buckingham: Open University Press.Google Scholar
Skelcher, C. and Mathur, N. (2004). Governance Arrangements and Public Service Performance: Reviewing and Reformulating the Research Agenda. AIM Research Working Paper. London: Advanced Institute of Management.Google Scholar
Skelcher, C. and Snape, S. (2001). ‘Ethics and Local Councillors: Modernising Standards of Conduct’, Parliamentary Affairs 54: 72–87.CrossRefGoogle Scholar
Steele, J. and Parston, G. (2003). ‘Rubber Stamped? The Expectations and Experiences of Appointed Public Service Governors’. London: Office of Public Management.
Stiles, P. and Taylor, B. (2001). Boards at Work: How Directors View their Roles and Responsibilities. Oxford University Press.Google Scholar
Sundaramurthy, C. and Lewis, M. (2003). ‘Cognition and Corporate Governance: Decades of Dialogue and Data’, Academy of Management Review 28(3): 371–83.Google Scholar
Tricker, R. (1980). Corporate Governance. London: Gower.Google Scholar
Tricker, R. (2000). ‘Editorial – Corporate Governance – the Subject Whose Time Has Come’, Corporate Governance 8(4): 289–96.CrossRefGoogle Scholar
Unseem, M. (2006). ‘How Well-run Boards Make Decisions’, Harvard Business Review 84(11): 130–8.Google Scholar
Zald, M. N. (1969). ‘The Power and Functions of Boards of Directors: A Theoretical Synthesis’, American Journal of Sociology 75(1): 97–111.CrossRefGoogle Scholar

Save book to Kindle

To save this book to your Kindle, first ensure no-reply@cambridge.org is added to your Approved Personal Document E-mail List under your Personal Document Settings on the Manage Your Content and Devices page of your Amazon account. Then enter the ‘name’ part of your Kindle email address below. Find out more about saving to your Kindle.

Note you can select to save to either the @free.kindle.com or @kindle.com variations. ‘@free.kindle.com’ emails are free but can only be saved to your device when it is connected to wi-fi. ‘@kindle.com’ emails can be delivered even when you are not connected to wi-fi, but note that service fees apply.

Find out more about the Kindle Personal Document Service.

Available formats
×

Save book to Dropbox

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Dropbox.

Available formats
×

Save book to Google Drive

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Google Drive.

Available formats
×