Understanding Boards of Directors: A Systems Perspective
Jay W. Lorsch, Harvard University, USA, jlorsch@hbs.eduAbstract
In this essay my goal is to explore why, despite the tireless efforts of talented people, research on corporate governance has been slow and uneven, and where that research should turn to next to be most valuable to practitioners. My belief is that the most fruitful work thus far has recognized that corporate boards are dynamic social systems, has identified all the forces that shape those systems, and has acknowledged that boards should seek to represent a wide variety of stakeholders, not just shareholders. The best way for me to establish this argument is to trace the history of research on corporate boards and analyze the trends in that research, including the relative value of the types of data that researchers in this field have used. Ultimately, I identify what I consider to be the best path forward in studying these complex social systems. I have made a deliberate choice to focus primarily on research that reflects firsthand experience with boards rather than on research that utilizes data derived from questionnaires and other secondary sources. Not everyone will agree with my choices, but my hope is that my perspective will nonetheless provide some guidance for people working in this evolving field to understand the true complexity of corporate boards.
Understanding Boards of Directors: A Systems Perspective
Since the middle of the twentieth century, business and legal scholars have tried to explain why corporate boards of directors function as they do, but it is not easy work to understand what happens behind the closed doors of boardrooms. Understanding Boards of Directors examines why research on corporate governance has been slow and uneven, and where that research should turn next to be most valuable to practitioners. The author traces the history of research on corporate boards and analyzes the trends in that research, including the relative value of the types of data that researchers in this field have used, and ultimately identifying the best path forward in studying these complex social systems. The author focuses primarily on research that reflects firsthand experience with boards that should provide some guidance for people working in this evolving field and help to understand the true complexity of corporate boards.
