This document discusses two research studies on the role of trust in governance and organizational performance. The first study interviewed 100 company Chairs and identified trust as the most important factor enabling effective board decision-making. Specifically, trust allowed for diversity of views, independence of mind, and openness to alternatives. The second study interviewed 50 CEOs and found trust was critical to organizational resilience.
The document analyzes differences in how Chairs and CEOs discussed the role of trust. Chairs emphasized trust's role in enabling critical reflection, while CEOs focused on trust supporting deep relationships. However, both groups saw trust as important for open communication. The document also examines gender differences, finding male Chairs placed more emphasis on trust supporting predict
This document summarizes seven commonly held myths about boards of directors that are not supported by empirical evidence. The myths discussed include: 1) an independent chairman always provides better oversight; 2) staggered boards always harm shareholders; 3) directors meeting independence standards are truly independent; 4) interlocked directorships reduce governance quality; 5) CEOs make the best directors; 6) directors face significant liability risks; and 7) company failure is always the board's fault. The document reviews relevant research studies for each myth and finds mixed or inconclusive evidence regarding their impact. It concludes that more attention should be paid to the board process rather than just its structural features in evaluating governance quality.
Placing Trust in Employee Engagement by Acas CouncilElizabeth Lupfer
This document discusses the importance of trust in building an engaged workforce. It argues that trust is low in many organizations currently and outlines four key drivers of engagement - leadership, line managers, employee voice, and integrity. For each driver, it examines the role of trust. High-trust workplaces are characterized by honest leadership that involves employees and admits mistakes. They empower line managers to lead through trust rather than control and enable various forms of employee voice. The document provides recommendations for practical steps organizations can take to rebuild trust, such as aligning values and leadership, developing management skills, and reviewing employee forums.
The document provides a communication audit report for the Residential and Commuter Life Advisory Board (RCL AB) to improve organizational communication. It identifies strengths like high member commitment and effective leadership. Weak areas include low satisfaction with meeting conduct and lack of agenda/task feedback. Recommendations include having weekly executive and general body meetings, disseminating agendas before meetings, using an evaluation system for events, taking electronic minutes, and designating a parliamentarian. The report utilized surveys, interviews, and observations to analyze the organization and provide suggestions.
The document summarizes a study on the advisory boards of Dutch family businesses. It aims to provide insight into why and how these businesses set up advisory boards through qualitative case studies of eight firms. The study finds that privately held Dutch family businesses set up advisory boards for several reasons: to have a sounding board, to professionalize the business, to support succession planning, to have a controlling mechanism, and to access specific resources. It also finds that the process of setting up an advisory board generally consists of six steps, though the pace differs between firms depending on contextual factors. The study seeks to address gaps in understanding the advisory board's role by taking a practice perspective on their establishment within family businesses.
This document examines the relationship between corporate culture, trust, and the effectiveness of virtual teams. A survey was administered to employees at three insurance companies that use virtual teams. The results showed Company B had the lowest levels of personality, institutional, and cognitive trust between virtual team members. High levels of trust were found to directly improve virtual team effectiveness. Corporate culture was found to directly influence the three modes of trust and thus virtual team performance.
Matt Argano - Personality and Commitment Research Proposalttutemple
This dissertation examines the relationship between leaders' personality traits and organizational commitment. A study of 50 leaders and 204 associates in apparel and consumer goods companies found that leaders' interpersonal sensitivity and adjustment traits significantly influenced associates' commitment levels. Specifically, emotionally stable and empathetic leaders were more effective at earning organizational commitment from their followers. The study concluded that demonstrating favorable personality traits is important for leaders to develop relationships and maximize employee performance and organizational success.
ABSTRACT
The results of this study revealed a correlation between leaders’ personality traits and levels of organizational commitment in Apparel and/or Consumer Packaged Goods organizations. Data were collected from 50 leaders in these organizations, along with 204 of their associates in the New York and New Jersey area.
Using the Hogan Personality Inventory (HPI), the Organizational Commitment
Questionnaire (OCQ), and a demographic survey, the data were collected. Leaders were comprised of Director and Vice President level managers. These leaders completed the Hogan Personality Inventory, which measured five distinct areas of personality: Ambition, Adjustment, Sociability, Interpersonal Sensitivity, and Prudence. Associates reporting to these leaders completed the Organizational Commitment Questionnaire, rating their own levels of organizational commitment. Evidence supported the reliability and validity of both leader personality and organizational commitment models and instruments.
This research study concluded there is a significant relationship
between leaders’ personality traits and associates’ levels of organizational commitment. Specifically, leaders’ Interpersonal Sensitivity and Adjustment personality traits both influence and shape associates’ levels of organizational commitment. The remaining personality traits examined showed weak relationships with organizational commitment. Statistical data and implications for the findings are included
This document summarizes a research paper about using advisory boards as a strategic practice in family businesses. The paper proposes studying advisory boards at the micro-level using a strategy as practice perspective to understand how they are actually used. It presents a case study of a medium-sized family firm that has recently established an advisory board. The paper aims to develop understanding of advisory boards as an informal governance mechanism and identify the enabling and constraining factors of working with one. It argues that a strategy as practice lens can provide rich insights into the routines, interactions, roles and activities involved in an advisory board's strategizing work.
This document summarizes seven commonly held myths about boards of directors that are not supported by empirical evidence. The myths discussed include: 1) an independent chairman always provides better oversight; 2) staggered boards always harm shareholders; 3) directors meeting independence standards are truly independent; 4) interlocked directorships reduce governance quality; 5) CEOs make the best directors; 6) directors face significant liability risks; and 7) company failure is always the board's fault. The document reviews relevant research studies for each myth and finds mixed or inconclusive evidence regarding their impact. It concludes that more attention should be paid to the board process rather than just its structural features in evaluating governance quality.
Placing Trust in Employee Engagement by Acas CouncilElizabeth Lupfer
This document discusses the importance of trust in building an engaged workforce. It argues that trust is low in many organizations currently and outlines four key drivers of engagement - leadership, line managers, employee voice, and integrity. For each driver, it examines the role of trust. High-trust workplaces are characterized by honest leadership that involves employees and admits mistakes. They empower line managers to lead through trust rather than control and enable various forms of employee voice. The document provides recommendations for practical steps organizations can take to rebuild trust, such as aligning values and leadership, developing management skills, and reviewing employee forums.
The document provides a communication audit report for the Residential and Commuter Life Advisory Board (RCL AB) to improve organizational communication. It identifies strengths like high member commitment and effective leadership. Weak areas include low satisfaction with meeting conduct and lack of agenda/task feedback. Recommendations include having weekly executive and general body meetings, disseminating agendas before meetings, using an evaluation system for events, taking electronic minutes, and designating a parliamentarian. The report utilized surveys, interviews, and observations to analyze the organization and provide suggestions.
The document summarizes a study on the advisory boards of Dutch family businesses. It aims to provide insight into why and how these businesses set up advisory boards through qualitative case studies of eight firms. The study finds that privately held Dutch family businesses set up advisory boards for several reasons: to have a sounding board, to professionalize the business, to support succession planning, to have a controlling mechanism, and to access specific resources. It also finds that the process of setting up an advisory board generally consists of six steps, though the pace differs between firms depending on contextual factors. The study seeks to address gaps in understanding the advisory board's role by taking a practice perspective on their establishment within family businesses.
This document examines the relationship between corporate culture, trust, and the effectiveness of virtual teams. A survey was administered to employees at three insurance companies that use virtual teams. The results showed Company B had the lowest levels of personality, institutional, and cognitive trust between virtual team members. High levels of trust were found to directly improve virtual team effectiveness. Corporate culture was found to directly influence the three modes of trust and thus virtual team performance.
Matt Argano - Personality and Commitment Research Proposalttutemple
This dissertation examines the relationship between leaders' personality traits and organizational commitment. A study of 50 leaders and 204 associates in apparel and consumer goods companies found that leaders' interpersonal sensitivity and adjustment traits significantly influenced associates' commitment levels. Specifically, emotionally stable and empathetic leaders were more effective at earning organizational commitment from their followers. The study concluded that demonstrating favorable personality traits is important for leaders to develop relationships and maximize employee performance and organizational success.
ABSTRACT
The results of this study revealed a correlation between leaders’ personality traits and levels of organizational commitment in Apparel and/or Consumer Packaged Goods organizations. Data were collected from 50 leaders in these organizations, along with 204 of their associates in the New York and New Jersey area.
Using the Hogan Personality Inventory (HPI), the Organizational Commitment
Questionnaire (OCQ), and a demographic survey, the data were collected. Leaders were comprised of Director and Vice President level managers. These leaders completed the Hogan Personality Inventory, which measured five distinct areas of personality: Ambition, Adjustment, Sociability, Interpersonal Sensitivity, and Prudence. Associates reporting to these leaders completed the Organizational Commitment Questionnaire, rating their own levels of organizational commitment. Evidence supported the reliability and validity of both leader personality and organizational commitment models and instruments.
This research study concluded there is a significant relationship
between leaders’ personality traits and associates’ levels of organizational commitment. Specifically, leaders’ Interpersonal Sensitivity and Adjustment personality traits both influence and shape associates’ levels of organizational commitment. The remaining personality traits examined showed weak relationships with organizational commitment. Statistical data and implications for the findings are included
This document summarizes a research paper about using advisory boards as a strategic practice in family businesses. The paper proposes studying advisory boards at the micro-level using a strategy as practice perspective to understand how they are actually used. It presents a case study of a medium-sized family firm that has recently established an advisory board. The paper aims to develop understanding of advisory boards as an informal governance mechanism and identify the enabling and constraining factors of working with one. It argues that a strategy as practice lens can provide rich insights into the routines, interactions, roles and activities involved in an advisory board's strategizing work.
Master's Thesis Capstone Action Learning Project Option One Final ReportArdavan Shahroodi
This document summarizes the transformation of the author's capstone project from a consulting case project to an action-based learning project. Originally, the author aimed to study sustainability practices of four pioneering companies but was unable to establish contact with them. The professor suggested focusing on the hospitality industry instead. The author visited eight hotels in Boston and left a sustainability questionnaire with managers. This marked the beginning of engaging organizations in the new action-based project approach.
Classified boards, firm value, and managerial entrenchmentLucianus Kelen
This paper examines the relationship between classified boards and firm value. It finds that classified boards, which stagger the election of directors over multiple years, are associated with lower firm value. The paper also finds evidence that classified boards entrench management and reduce accountability to shareholders. Specifically, classified boards decrease the likelihood of CEO turnover following poor performance, reduce the sensitivity of CEO compensation to performance, deter proxy contests led by shareholders, and decrease the likelihood that shareholder proposals will be implemented. The evidence suggests classified boards hurt shareholders by insulating management from market discipline rather than providing benefits related to stability and continuity.
LDR 7980 Capstone Essay Three Assignment Influencing Motivating and Leading t...Ardavan Shahroodi
The document discusses influencing, motivating, and leading knowledge workers. It defines knowledge workers as highly educated employees who contribute through specialized knowledge rather than manual labor. While knowledge workers are increasingly seen as the main source of competitive advantage, organizations struggle to measure their value and understand how to empower them. The document argues that knowledge workers respond best to leadership that inspires trust, clarifies purpose, aligns systems to support goals, and unleashes talent through individual support and setting an example. An effective performance review system focuses on skills development rather than decisions about pay. Overall, organizations must transition to a new model that recognizes all employees, including so-called unskilled workers, as potential knowledge workers in order to fully benefit from their human
The document discusses research on human resources management and board composition. It covers several key areas:
1. Director demographics like age, education, gender, and race, and how they can impact decision making but results are inconsistent.
2. Human capital factors of directors such as industry experience, experience as a CEO, venture capital experience, and financial expertise, and how they influence decisions.
3. Social capital aspects including ties to other firms, relationships with managers, and social standing, and how they can provide benefits but also constraints.
4. Suggestions for future research including focusing on appropriate level of analysis, improving measurement methods, and exploring more complex relationships.
CalPERS proposed new global governance principles advocating for annual evaluations of any director serving for 12+ years to assess their independence. While directors were traditionally considered independent unless employed by the company, critics now argue long-tenured directors may be less likely to critically evaluate management. However, long-serving directors provide valuable organizational knowledge and relationships with management. Studies have shown both enhanced and diminished independence from lengthy board tenure. Rather than term limits, balance is important to ensure boards have the right mix of experience, support for management, and objective skepticism.
The document discusses the client-consultant relationship in organizational development. It begins with the consultant initially contacting the client and having meetings to understand the situation. The consultant then defines the client system and works to build mutual trust between the client and consultant through confidentiality and interactions. The consultant acts as a facilitator using the client's internal resources to take a collaborative approach. The appropriate depth of intervention is determined based on producing enduring solutions and committing the client's energy and resources to change. Feedback loops are also important to improve the relationship and activities. The goal is for the client to internalize skills and make free choices to continue developing on their own after the relationship ends.
The Top 9 Leadership Behaviors That Drive Employee Commitmenttconsolini
The document summarizes research on the top 9 leadership behaviors that drive employee commitment. The research found that improving a manager's effectiveness in any of the 9 behaviors positively impacts employee satisfaction, but some have a greater effect. The top 9 behaviors are: inspiring others, driving for results, strategic perspective, collaboration, walking the talk, trust, developing and supporting others, building relationships, and courage. Leaders with strengths in multiple behaviors had employees with the highest levels of satisfaction and commitment. The document recommends leaders identify areas to improve by addressing weaknesses or building profound strengths in one of the top behaviors.
Looks at the financial business cost (operational and human resources) of allowing unprofessional inappropriate behavior's in the social work environment. (bullying betrayal, gossip, sabotage)
This document discusses modern leadership theories and their impact on organizations. It analyzes transformational leadership theory, noting that transformational leaders guide organizations through change with vision and respect for followers. They seek input from followers and listen to their needs. This positively impacts followers by giving them a sense of purpose and direction, and impacts organizations by creating loyal followers and lowering turnover rates.
by David F. Larcker and Brian Tayan, Stanford Closer Look Series, October 7, 2019
A reliable system of corporate governance is considered to be an important requirement for the long-term success of a company. Unfortunately, after decades of research, we still do not have a clear understanding of the factors that make a governance system effective. Our understanding of governance suffers from 1) a tendency to overgeneralize across companies and 2) a tendency to refer to central concepts without first defining them. In this Closer Look, we examine four central concepts that are widely discussed but poorly understood.
We ask:
• Would the caliber of discussion improve, and consensus on solutions be realized, if the debate on corporate governance were less loosey-goosey?
• Why can we still not answer the question of what makes good governance?
• How can our understanding of board quality improve without betraying the confidential information that a board discusses?
• Why is it difficult to answer the question of how much a CEO should be paid?
• Are U.S. executives really short-term oriented in managing their companies?
This document provides a top management report analyzing a dispute between Ms. Cooke, the COO of DSS Consulting, and Ms. Peterson, the team leader of the Southwest Region. The report examines the dispute from seven organizational behavior and human resource management perspectives: leadership, management style, communication, teamwork, organizational culture, change management, and training. The analysis finds deficiencies in Cooke's leadership, management style, communication skills, and change management. It also finds evidence of "groupthink" developing within Peterson's team. The report concludes with recommendations on how to address the problems, including improving two-way communication between Cooke and Peterson and introducing management skills training.
LDR 7980 Capstone Essay Four Assignment Ethics and LeadershipArdavan Shahroodi
This document provides an analysis of ethics and leadership in organizations. It discusses how the modern organization structure can deprive employees of engagement needed for ethical development. Researchers found unethical decisions often stem from pressure from managers and lack of support from executives. The document recommends leaders develop strong value systems, avoid oversimplifying problems, be objective in evaluations, and seek diverse perspectives to make ethical decisions. Cultivating an authentic culture of engagement between leaders and followers is key to sustainable ethics.
Shades of Grey: An Exploratory Study of Engagement in Work TeamsEngage for Success
Following the publication of “Engagement through CEO Eyes” in 2013, the Barriers TAG have commissioned the largest ever UK study of barriers to team engagement.
The joint study, from Engage for Success, Ashridge Executive Education and Oracle, challenges conventional thinking about the way engagement is measured and suggests that teams are often nowhere near as engaged as their organisations think they are.
The study shows that only a quarter of UK teams are giving their best at work, while almost a third (32 per cent) are actively disengaged.
The report is based on a study of 195 participants from 28 teams across seven industry sectors. Organizations in the study varied from SMEs to UK-based multi-nationals, from sectors ranging from Government and aviation to chemicals and healthcare.
Esssay. Relational vs Transactional psychological contractsDimitrios Kordas
This is an essay, written for the LSE Summer School 2013, focused on the comparison and analysis of transactional and relational, Psychological Contracts (PC) and their intreconnection with different working environments. The author tries to keep a deeper eye on the emerging trend of hiring initially on a transactional contractual basis and later on a relational one. The limited scope and academic requirements constrained a more elaborated view on the causes of psychological contract breach and a wider approach on the several PC models have already been developed. The Harvard model is used as a "map of the HRM territory" (Beer et al., 1984) to depict how the HR-policies can empower the two, examined, psychological contract types.
- The document examines how an external emphasis on boards prioritizing the monitoring function can negatively impact their ability to provide resources. It argues that appointing fully independent nominating committees in response to this emphasis undermines resource provision in two ways.
- First, it reduces information sharing between managers and nominating committees, leading to a mismatch between directors' experience and the firm's specific resource needs.
- Second, it decreases trust between the CEO and board, resulting in a less collaborative relationship that hinders resource provision.
- To mitigate these issues, the author proposes including a non-CEO executive on nominating committees to better understand the firm's resource needs and foster a more cooperative CEO-board dynamic.
This document discusses elements of an effective organization. It argues that a decentralized organizational structure is most effective in today's global environment. Key elements of effective organizations include structure, global operations, communication strategies, management, decision-making, problem-solving, and leadership. Decentralized structures allow for open communication across departments and empower employees. Clear, participatory communication is important both internally and externally. Principles of effective management should follow an open-system approach in decentralized organizations.
Does firm volatility affect managerial influenceAlexander Decker
This document discusses how firm volatility may affect managerial influence on firm performance. It develops a theoretical framework drawing from existing literature on group decision-making. The hypothesis is that the effect of managerial ability on firm value differs according to a firm's characteristics like risk and volatility. An empirical analysis tests this hypothesis using data on Korean firms from 1999-2008. Managerial ability is controlled by focusing on those who graduated from top universities. The analysis finds the influence of such managers on Tobin's Q (a measure of firm value) varies interactively with a firm's volatility, market risk, and return variability.
Develop an organizational climate for engagement to increase employee motivation and build a better, more productive place to work using survey guided development.
This document discusses trust behaviors that are important for innovation. It notes that innovative companies are able to build relationships with weak ties, characterized by informality and complementary knowledge. However, current organizational practices make it difficult to establish relationships with weak ties. The document outlines a workshop where participants will learn to audit trust behaviors, identify trust damaging behaviors in their own organizations, and discuss how to encourage more trust building behaviors. It then discusses different types of trust behaviors and how specific behaviors can build, damage, or violate trust in a relationship. The goal is for organizations to focus on and develop trust building behaviors to facilitate innovation.
This document summarizes research that challenges several commonly held beliefs about best practices for corporate boards of directors. It discusses four such myths:
1. That the chairman should always be independent of the CEO. Research finds no consistent relationship between chairman independence and company performance, and in some cases forced separation can hurt the company.
2. That staggered boards are always bad for shareholders. While they can entrench poor management, staggered boards can also benefit shareholders by allowing long-term planning and protecting valuable company assets.
3. That directors meeting NYSE independence standards are truly independent. Factors like social connections can compromise a director's independence even if they meet regulatory standards.
4. That interlocked directorships always
Examining CEO Tenure- %22Short & Sweet%22 Vs %22Long & Illustrious%22Andrew Doyle
- The document examines the relationship between CEO tenure and firm performance, reviewing literature that finds both positive and negative relationships. It tests hypotheses about founder CEOs, internally promoted CEOs, and the relationship between tenure and compensation.
- Data is collected on 395 S&P 500 firms, including measures of firm performance, CEO tenure, compensation, and controls. Regressions are run to analyze the relationships between tenure and performance, and tenure and compensation.
- Preliminary results found some support for long tenures being beneficial, as increasing tenure was not found to adversely affect performance. The analysis sought to provide insights into when the agency problem between managers and shareholders is most pronounced.
Master's Thesis Capstone Action Learning Project Option One Final ReportArdavan Shahroodi
This document summarizes the transformation of the author's capstone project from a consulting case project to an action-based learning project. Originally, the author aimed to study sustainability practices of four pioneering companies but was unable to establish contact with them. The professor suggested focusing on the hospitality industry instead. The author visited eight hotels in Boston and left a sustainability questionnaire with managers. This marked the beginning of engaging organizations in the new action-based project approach.
Classified boards, firm value, and managerial entrenchmentLucianus Kelen
This paper examines the relationship between classified boards and firm value. It finds that classified boards, which stagger the election of directors over multiple years, are associated with lower firm value. The paper also finds evidence that classified boards entrench management and reduce accountability to shareholders. Specifically, classified boards decrease the likelihood of CEO turnover following poor performance, reduce the sensitivity of CEO compensation to performance, deter proxy contests led by shareholders, and decrease the likelihood that shareholder proposals will be implemented. The evidence suggests classified boards hurt shareholders by insulating management from market discipline rather than providing benefits related to stability and continuity.
LDR 7980 Capstone Essay Three Assignment Influencing Motivating and Leading t...Ardavan Shahroodi
The document discusses influencing, motivating, and leading knowledge workers. It defines knowledge workers as highly educated employees who contribute through specialized knowledge rather than manual labor. While knowledge workers are increasingly seen as the main source of competitive advantage, organizations struggle to measure their value and understand how to empower them. The document argues that knowledge workers respond best to leadership that inspires trust, clarifies purpose, aligns systems to support goals, and unleashes talent through individual support and setting an example. An effective performance review system focuses on skills development rather than decisions about pay. Overall, organizations must transition to a new model that recognizes all employees, including so-called unskilled workers, as potential knowledge workers in order to fully benefit from their human
The document discusses research on human resources management and board composition. It covers several key areas:
1. Director demographics like age, education, gender, and race, and how they can impact decision making but results are inconsistent.
2. Human capital factors of directors such as industry experience, experience as a CEO, venture capital experience, and financial expertise, and how they influence decisions.
3. Social capital aspects including ties to other firms, relationships with managers, and social standing, and how they can provide benefits but also constraints.
4. Suggestions for future research including focusing on appropriate level of analysis, improving measurement methods, and exploring more complex relationships.
CalPERS proposed new global governance principles advocating for annual evaluations of any director serving for 12+ years to assess their independence. While directors were traditionally considered independent unless employed by the company, critics now argue long-tenured directors may be less likely to critically evaluate management. However, long-serving directors provide valuable organizational knowledge and relationships with management. Studies have shown both enhanced and diminished independence from lengthy board tenure. Rather than term limits, balance is important to ensure boards have the right mix of experience, support for management, and objective skepticism.
The document discusses the client-consultant relationship in organizational development. It begins with the consultant initially contacting the client and having meetings to understand the situation. The consultant then defines the client system and works to build mutual trust between the client and consultant through confidentiality and interactions. The consultant acts as a facilitator using the client's internal resources to take a collaborative approach. The appropriate depth of intervention is determined based on producing enduring solutions and committing the client's energy and resources to change. Feedback loops are also important to improve the relationship and activities. The goal is for the client to internalize skills and make free choices to continue developing on their own after the relationship ends.
The Top 9 Leadership Behaviors That Drive Employee Commitmenttconsolini
The document summarizes research on the top 9 leadership behaviors that drive employee commitment. The research found that improving a manager's effectiveness in any of the 9 behaviors positively impacts employee satisfaction, but some have a greater effect. The top 9 behaviors are: inspiring others, driving for results, strategic perspective, collaboration, walking the talk, trust, developing and supporting others, building relationships, and courage. Leaders with strengths in multiple behaviors had employees with the highest levels of satisfaction and commitment. The document recommends leaders identify areas to improve by addressing weaknesses or building profound strengths in one of the top behaviors.
Looks at the financial business cost (operational and human resources) of allowing unprofessional inappropriate behavior's in the social work environment. (bullying betrayal, gossip, sabotage)
This document discusses modern leadership theories and their impact on organizations. It analyzes transformational leadership theory, noting that transformational leaders guide organizations through change with vision and respect for followers. They seek input from followers and listen to their needs. This positively impacts followers by giving them a sense of purpose and direction, and impacts organizations by creating loyal followers and lowering turnover rates.
by David F. Larcker and Brian Tayan, Stanford Closer Look Series, October 7, 2019
A reliable system of corporate governance is considered to be an important requirement for the long-term success of a company. Unfortunately, after decades of research, we still do not have a clear understanding of the factors that make a governance system effective. Our understanding of governance suffers from 1) a tendency to overgeneralize across companies and 2) a tendency to refer to central concepts without first defining them. In this Closer Look, we examine four central concepts that are widely discussed but poorly understood.
We ask:
• Would the caliber of discussion improve, and consensus on solutions be realized, if the debate on corporate governance were less loosey-goosey?
• Why can we still not answer the question of what makes good governance?
• How can our understanding of board quality improve without betraying the confidential information that a board discusses?
• Why is it difficult to answer the question of how much a CEO should be paid?
• Are U.S. executives really short-term oriented in managing their companies?
This document provides a top management report analyzing a dispute between Ms. Cooke, the COO of DSS Consulting, and Ms. Peterson, the team leader of the Southwest Region. The report examines the dispute from seven organizational behavior and human resource management perspectives: leadership, management style, communication, teamwork, organizational culture, change management, and training. The analysis finds deficiencies in Cooke's leadership, management style, communication skills, and change management. It also finds evidence of "groupthink" developing within Peterson's team. The report concludes with recommendations on how to address the problems, including improving two-way communication between Cooke and Peterson and introducing management skills training.
LDR 7980 Capstone Essay Four Assignment Ethics and LeadershipArdavan Shahroodi
This document provides an analysis of ethics and leadership in organizations. It discusses how the modern organization structure can deprive employees of engagement needed for ethical development. Researchers found unethical decisions often stem from pressure from managers and lack of support from executives. The document recommends leaders develop strong value systems, avoid oversimplifying problems, be objective in evaluations, and seek diverse perspectives to make ethical decisions. Cultivating an authentic culture of engagement between leaders and followers is key to sustainable ethics.
Shades of Grey: An Exploratory Study of Engagement in Work TeamsEngage for Success
Following the publication of “Engagement through CEO Eyes” in 2013, the Barriers TAG have commissioned the largest ever UK study of barriers to team engagement.
The joint study, from Engage for Success, Ashridge Executive Education and Oracle, challenges conventional thinking about the way engagement is measured and suggests that teams are often nowhere near as engaged as their organisations think they are.
The study shows that only a quarter of UK teams are giving their best at work, while almost a third (32 per cent) are actively disengaged.
The report is based on a study of 195 participants from 28 teams across seven industry sectors. Organizations in the study varied from SMEs to UK-based multi-nationals, from sectors ranging from Government and aviation to chemicals and healthcare.
Esssay. Relational vs Transactional psychological contractsDimitrios Kordas
This is an essay, written for the LSE Summer School 2013, focused on the comparison and analysis of transactional and relational, Psychological Contracts (PC) and their intreconnection with different working environments. The author tries to keep a deeper eye on the emerging trend of hiring initially on a transactional contractual basis and later on a relational one. The limited scope and academic requirements constrained a more elaborated view on the causes of psychological contract breach and a wider approach on the several PC models have already been developed. The Harvard model is used as a "map of the HRM territory" (Beer et al., 1984) to depict how the HR-policies can empower the two, examined, psychological contract types.
- The document examines how an external emphasis on boards prioritizing the monitoring function can negatively impact their ability to provide resources. It argues that appointing fully independent nominating committees in response to this emphasis undermines resource provision in two ways.
- First, it reduces information sharing between managers and nominating committees, leading to a mismatch between directors' experience and the firm's specific resource needs.
- Second, it decreases trust between the CEO and board, resulting in a less collaborative relationship that hinders resource provision.
- To mitigate these issues, the author proposes including a non-CEO executive on nominating committees to better understand the firm's resource needs and foster a more cooperative CEO-board dynamic.
This document discusses elements of an effective organization. It argues that a decentralized organizational structure is most effective in today's global environment. Key elements of effective organizations include structure, global operations, communication strategies, management, decision-making, problem-solving, and leadership. Decentralized structures allow for open communication across departments and empower employees. Clear, participatory communication is important both internally and externally. Principles of effective management should follow an open-system approach in decentralized organizations.
Does firm volatility affect managerial influenceAlexander Decker
This document discusses how firm volatility may affect managerial influence on firm performance. It develops a theoretical framework drawing from existing literature on group decision-making. The hypothesis is that the effect of managerial ability on firm value differs according to a firm's characteristics like risk and volatility. An empirical analysis tests this hypothesis using data on Korean firms from 1999-2008. Managerial ability is controlled by focusing on those who graduated from top universities. The analysis finds the influence of such managers on Tobin's Q (a measure of firm value) varies interactively with a firm's volatility, market risk, and return variability.
Develop an organizational climate for engagement to increase employee motivation and build a better, more productive place to work using survey guided development.
This document discusses trust behaviors that are important for innovation. It notes that innovative companies are able to build relationships with weak ties, characterized by informality and complementary knowledge. However, current organizational practices make it difficult to establish relationships with weak ties. The document outlines a workshop where participants will learn to audit trust behaviors, identify trust damaging behaviors in their own organizations, and discuss how to encourage more trust building behaviors. It then discusses different types of trust behaviors and how specific behaviors can build, damage, or violate trust in a relationship. The goal is for organizations to focus on and develop trust building behaviors to facilitate innovation.
This document summarizes research that challenges several commonly held beliefs about best practices for corporate boards of directors. It discusses four such myths:
1. That the chairman should always be independent of the CEO. Research finds no consistent relationship between chairman independence and company performance, and in some cases forced separation can hurt the company.
2. That staggered boards are always bad for shareholders. While they can entrench poor management, staggered boards can also benefit shareholders by allowing long-term planning and protecting valuable company assets.
3. That directors meeting NYSE independence standards are truly independent. Factors like social connections can compromise a director's independence even if they meet regulatory standards.
4. That interlocked directorships always
Examining CEO Tenure- %22Short & Sweet%22 Vs %22Long & Illustrious%22Andrew Doyle
- The document examines the relationship between CEO tenure and firm performance, reviewing literature that finds both positive and negative relationships. It tests hypotheses about founder CEOs, internally promoted CEOs, and the relationship between tenure and compensation.
- Data is collected on 395 S&P 500 firms, including measures of firm performance, CEO tenure, compensation, and controls. Regressions are run to analyze the relationships between tenure and performance, and tenure and compensation.
- Preliminary results found some support for long tenures being beneficial, as increasing tenure was not found to adversely affect performance. The analysis sought to provide insights into when the agency problem between managers and shareholders is most pronounced.
1. The document summarizes the findings of a study conducted by The Beacon Group on organizational effectiveness.
2. The study examined seven organizations and found that lack of focus was the top issue, with an average score of 52% across organizations. Business architecture and organizational culture also scored relatively low.
3. Key findings included that silos negatively impact performance, senior leaders fail to align frontline managers, accountability is lacking, and strategic decisions are not well communicated.
By many measures, current CEOs should be the best candidates to serve on boards of directors. They have extensive strategic, operational, and risk management expertise, as well as experiences and leadership attributes that are important for a firm’s long-term success.
However, there is currently no widely accepted, rigorous study that demonstrates that current CEOs are better board members or that companies with CEO directors benefit in terms of improved advice or monitoring. In fact, recent survey data suggests that active CEOs might not always be the best board members because of the time constraints of their full time job and personality attributes that may make it difficult for them to contribute constructively to a boardroom environment.
We examine this issue in closer detail and ask:
1. Should companies reassess the importance of this criteria when looking for new board members?
2. Does the requirement for CEO-level experience limit the pool of available directors, particularly diversity candidates who may be less likely to have this experience?
3. If the availability of CEO directors is low, should professional directors be recruited to fill the gap?
4. Do the positive qualities of a retired CEO deteriorate, or do they never become outdated?
Read the attached Closer Look and let us know what you think!
DQ4-1 Responses Trust is the most important element in any rel.docxmadlynplamondon
DQ4-1 Responses
Trust is the most important element in any relationship. Without trust, misunderstandings, clashes and conflicts are bound to happen which can affect any relationship whether it is personal or professional. In an organization, trust is one of the most valued elements which can be used to gain follower ship and support of the workforce. A positive example is when a manager trusts his employee to lead a project, it will automatically motivate the employee to work harder and to prove himself trustworthy to the manager. This would not only help in bringing down the employee turnover rate but will help in improving the efficiency and productivity of the workforce. On the contrary, when employees feel that they are not being trusted with leading jobs, they will feel unmotivated which might affect their performance and the overall productivity in the organization.
Yvette
https://smallbusiness.chron.com/effective-communication-organization-1400.html
2.
Re: Topic 4 DQ 1
Trust is the most important element in any relationship. Without trust, misunderstandings, clashes and conflicts are bound to happen which can affect any relationship whether it is personal or professional. In an organization, trust is one of the most valued elements which can be used to gain follower ship and support of the workforce. A positive example is when a manager trusts his employee to lead a project, it will automatically motivate the employee to work harder and to prove himself trustworthy to the manager. This would not only help in bringing down the employee turnover rate but will help in improving the efficiency and productivity of the workforce. On the contrary, when employees feel that they are not being trusted with leading jobs, they will feel unmotivated which might affect their performance and the overall productivity in the organization.
Yvette
https://smallbusiness.chron.com/effective-communication-organization-1400.html
3.
n business , organizations need to have a good relationship with each other in order to have a successful partnership; one of the main factors of a good relationship is trust. According to Piricz, (2018) trust is so important because it can be used as a marker of the satisfaction an organization has with another or even their displeasure.
Trust decides how frequently groups work together and the value placed on each transaction in a business perspective. In the example of nonprofits, an annual partnership of five years and successful events working towards the same goal, has a higher level of trust than a first-time partnership with mixed results. Should both organizations ask the partnering organization to collaborate on a project, that business would choose the one of five years over the one-time partnership, (Piricz, 2018).
Trust on a personal level between the people in an organization and working with other organizations assists in negotiating terms, conditions, and limits. A trusted leader can inspire more follower ...
Project Selection Criteria List TemplateCategoryProject Crit.docxwkyra78
Project Selection Criteria List Template
Category
Project Criteria
Criteria Description
Reasonableness
(Insert additional rows as necessary to complete the Project Selection Criteria List table)
Definitions for Project Selection Criteria Categories:
Relevance: the extent to which the project supports the class objectives, the Information Systems Management program and your own professional goals.
Risk: the level of potential events or uncertainty that could have a negative effect on your project.
Reasonableness: an assessment of the ability to successfully complete the project as related to the triple constraint and related issues (availability of expertise, availability of required equipment and facilities, proposed level of scope for a two-month period, etc.).
Return: the overall benefit of completing the project (financial gain, value of experience, networking opportunities, providing professional and/or community service, etc.).
Other: any other areas of project considerations not mentioned above.
Kreitner/Kinicki/Cole
Fundamentals of Organizational Behaviour: Key Concepts, Skill, and Best Practices
Chapter 11
Leadership
Chapter Learning Objectives
· Explain the theory of leadership and discuss behavioural leadership theory.
· Explain, according to Fiedler’s contingency model, how leadership style interacts with situational control.
· Discuss path-goal theory.
· Describe how charismatic leadership transforms followers and work groups.
· Explain the leader-member exchange (LMX) model of leadership and the substitutes for leadership.
· Review the principles of servant-leader and superleadership.
Opening Case
Land of the Giant
This case profiles a visionary leader, Gwyn Morgan of EnCana Corp. in Calgary, know as the ‘philosopher-king’ of the oil patch. He exhibits charismatic qualities including a clear vision of a global energy giant headquartered in Canada, and strong communication skills to inspire others to work toward this vision. He appeals to ideological values through the ‘corporate constitution’, and provides intellectual stimulation for followers through the values such as ‘seize opportunities’, ‘teamwork and trust’, and ‘fear of the status quo’. He inspires followers to rise to new levels of performance by communicating his expectations for leadership ‘with character, competence, and humility’ to achieve ‘nothing less than the best effort’. His display of confidence in himself and in the employees of Alberta Energy Co. Ltd. and PanCanadian Energy Corp., led to the merger of these two companies to form EnCana Corp. – definitely performance beyond the call of duty.
Chapter Summary
Leadership
Leadership is defined as influencing employees to voluntarily pursue organizational goals. It is a social influence process in which the leader seeks the voluntary participation of subordinates in an effort to reach organizational goals.
Trait and Behavioural Theories of Leadership
A leader trait ...
Identifying & Building Leadership CapabilityOpicGroup
With the aim of getting as many different perspectives as possible, we have
compared the literature and the vast amount of data available on organisational development and leadership. This whitepaper outlines research undertaken to identify the common capabilities (defined as a combination of attributes and traits that lead to sustainable behaviour) for executive roles.
The document discusses organizational trust and its value. It conducted research that identified four key reasons why being a trustworthy organization is valuable: 1) It drives overall business performance by gaining customer loyalty and advocacy, attracting investors and partners, etc. 2) It puts an organization in a stronger position during times of crisis by having more goodwill from stakeholders. 3) It overcomes the growing skepticism that stakeholders have towards organizations. 4) It allows an organization to manage stakeholder relationships proactively by understanding how trust impacts future behavior. The research also developed a model and methodology for organizations to measure, diagnose, and take actions to build and maintain trust levels.
Leveraging Culture to Build Trust inside the OrganizationDenison Consulting
1) The document discusses organizational trust and how it can be built through organizational culture. It defines trust and its importance for organizations.
2) It introduces the Denison Organizational Trust Module, which measures trust along components like benevolence, integrity, and openness.
3) Research showed that culture indexes like empowerment, agreement, and capability development strongly correlated with higher trust scores. Organizations can therefore leverage aspects of culture to build trust.
A Study on the Impact of Manager’s Personality on the financial performance o...IRJET Journal
This document discusses a study on the impact of managers' personality traits on the financial performance of companies listed on the BSE 100 index in India. It aims to analyze the correlation between managers' characteristics like age, gender, experience, and tenure with companies' return on assets and return on equity. The study reviews previous literature on these relationships and outlines its research methodology, including objectives, hypotheses, sampling plan, and data analysis tools. Regression models will be used to analyze the relationship between financial performance indicators and managers' traits. The study is limited to BSE 100 companies from 2017-2022 but aims to contribute to understanding how management qualities influence organizational success.
Board size, composition and the performance of private sector banks 2IAEME Publication
This document analyzes the relationship between board size, composition, and performance of private sector banks in India. It first provides background on corporate governance in Indian banks and reviews prior literature on the relationship between board structure and firm performance. The document then outlines the objectives, methodology, and variables of the study. Specifically, the study examines the relationship between board size and composition, meetings, and various performance metrics including return on assets, net profit margin, and interest spread for 8 major private sector banks over a 10-year period. The results of the analysis found a significant relationship between board composition and certain performance indicators in private banks, suggesting board composition impacts bank performance. The private banks were also found to utilize their asset and equity bases more efficiently
This document summarizes a study that investigated the relationship between "soft" governance factors and the performance of insurance companies in Ghana from 2005-2009. The study hypothesized that factors like recruitment policy, staff training, communication policy, and performance evaluation would have a positive relationship with firm performance. A questionnaire was used to collect data on these soft governance factors, while return on assets, return on equity, and corporate social responsibility were used to measure firm performance. Regression analysis found statistically significant positive relationships between the soft governance factors of recruitment policy, staff training, communication policy, and performance evaluation, and the performance of the insurance companies. The study recommends treating soft governance as a strategic issue and fully implementing related policies to maximize performance benefits.
This document discusses trust between middle managers and senior leadership in organizations. Some key points:
1) Only 36% of middle managers say they trust their business leader to a great extent, and trust declines in larger organizations.
2) Middle managers perceive their organizations as less transparent and rewarding of openness than senior leaders do.
3) High-trust managers, who trust their organization greatly, rate their organization higher on behaviors like transparency and honesty.
4) Middle managers play a vital role in building trust but often don't feel their role is valued or supported, and want leaders who communicate openly and honestly.
The document discusses the importance of focusing on quality of interaction, rather than just tangible changes, when formulating and executing strategy. It notes that starting with changes to structure, processes and hierarchy often backfires by causing anxiety, distrust and failure to capitalize on the transformational power of interaction. The participative approach outlined puts interaction at the heart of strategy work by building consensus through conversations focused on why change is needed, the desired changes, how to implement them, and responsibilities. This helps address emotional and psychological needs better than a top-down approach over-focused on tangible changes.
The Influence of Leadership on Followers Performance among Bottle Water Compa...Dr. Amarjeet Singh
This study aimed to investigate the relationship between leadership style and followers' performance in bottle water companies in Port Harcourt, Nigeria. It identified democratic, autocratic, participative, and transactional leadership styles as the independent variables, and followers' performance as the dependent variable.
A questionnaire was distributed to 100 employees across several bottle water companies, with a response rate of 90%. The results found that democratic leadership had a mean range of 3.04-3.34 and was agreed to have a high impact on followers' performance. Autocratic leadership obtained a mean range of 3.20-3.50 and was also agreed to highly impact performance. Overall, the study concluded that leadership styles positively impact followers, but each style
Annotated Bibliography – Part 115MGMT 8410 Assignment A.docxjustine1simpson78276
Annotated Bibliography – Part 1 15
MGMT 8410 Assignment: Annotated Bibliography – Part 1
Uchenna Ohaeri, [email protected]
Student ID #: A00647580
Program: PhD in Management
Specialization: Leadership and Organizational Change
Faculty: Terry McGovern, [email protected]
Walden University
September 4, 2016
Scandura, T. A., & Pellegrini, E. K. (2008). Trust and leader-member exchange: A closer look at relational vulnerability. Journal of Leadership & Organizational Studies, 15(2), 101–110. doi: 10.1177/1548051808320986
The study by Scandura and Pellegrini examined the effect of trust in a leader-member exchange (LMX) quality, which they conducted amongst 228 full-time employed professionals enrolled in an Executive MBA program at a large Southeastern University. The authors achieved this by espousing Lewicki, Bunker, and Stevenson’s 11-item scaling method, which explored the Calculus-Based Trust (CBT), and Identification-Based Trust (IBT) scales. The scales are rated on the Cronbach alpha index to show their proportionality and linearity with LMX. Scandura and Pellegrini’s study revealed that a third-order “S-shaped” polynomial relationship existed between the CBT and LMX. They also found out that a linear relationship existed between the IBT and LMX, thereby providing support for their Hypothesis number 2.
The authors’ work draws strength from some four decades of available leadership researches and their opposition with leadership styles. Their main proposition is connected to the fact that leaders differentiate in their dyadic relationship with followers rather than espousing a particular leadership style with other members of the team or group. According to them, recent studies has resulted to the LMX research development, which in their view, asserts that the supervisor–subordinate dyad exist between two different possibilities ranging from “low-quality” relationship to “high-quality” relationships.
Scandura & Pellegrini’s finding reveals the significance of trust in the leader as a valuable tool between LMX and performance. This is affirmative, as the LMX concept is analyzed as a “trust-building” process. The implications of this study of the social exchange theory (SET) are that it will help in providing strategies on how ethical leaders affect organizational goals and outcomes. Some researchers posit that the SET suggests that team members and employees requite the leaders' behavior on them on a mutual ground. Relationship in social exchange can eventually evolve which is characterized by good levels of trust and diminished levels of control. The important concern is that it is pertinent to note that some of the LMX parameters have measures that are directly correlated with the concept of trust. I contend that power distance, which is an important cultural factor in any social exchange, may have an influence in an LMX relationship. Consequently, further research should be conducted in order to investigate the.
Similar to AICD - The role of trust in ensuring business performance and good governance (20)
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Introduction
In 2015, we conducted research for the AICD on the
relationship between governance and performance (Kay
and Goldspink, 2015). This involved interviewing 100
Chairs from private and listed companies, as well as
from not-for-profits and public sector organisations. The
research identified three key factors that the Chairs said
impacted the quality of board decision-making and, as
such, their organisation’s ability to achieve successful
outcomes. These were:
• Perspective — an ability to question and debate the
assumptions informing the board’s assessment of
the organisation’s situation, given its complexity and
ambiguity;
• Scale — the ability to appropriately frame or
understand the implications of decisions across
time and different levels of organisational scale,
i.e. decisions taken at the level of the team may
have unintended consequences at the divisional or
organisational and vice versa;
• Prediction — the ability of the team to use
information and experience as a basis for predicting
plausible future circumstances and their implications
for the organisation.
The Chairs argued that the attributes needed to support
these three key factors were:
At the individual level:
• Independence of mind (as distinct from structural
independence); and
• Openness to alternatives;
And at the collective level:
• Diversity of views and experiences; and
• Trust.
Achieving and maintaining these attributes, they
argued, came down to the selection, development and
maintenance of an effective team, comprising both the
board and the executive. Importantly, the Chairs also
discussed the fact that it was a challenge to bring these
attributes together, and even more difficult to maintain
them over time. Of these attributes, trust - both between
members of the board and between the board and the
executive - was seen as the most important factor as it
enabled the other attributes. Significantly, in a study we
conducted in 2012 involving interviews with 50 CEOs of
critical infrastructure organisations, (Kay Goldspink,
2012), trust was also found to be critical to organisational
resilience.
In this paper, we will explore the role of trust in more
detail, comparing the views of the CEOs from the 2012
study1
with those of the Chairs from the 2015 study.
We will also consider broader research, which provides
insights into trust dependent processes linked to effective
governance and effective group decision-making more
generally.
1 We would like to thank Commonwealth Attorney General's Department for making the data set from the 2012 study available to use for re-analysis.
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Research approach
In this paper, we have relied on two pre-existing data
sets. This included (i) 50 qualitative interviews with CEOs
of large critical infrastructure organisations, focused
primarily on the factors supporting organisational
resilience in their businesses; and (ii) 100 qualitative
interviews with Chairs from a wide range of organisations
– including listed, public sector, private and not-for-profit
organisations – focused on the relationship between
governance and performance.
In both cases, the interviews were semi-structured,
recorded and transcribed for subsequent analysis. The
results described in this paper were the product of a
detailed recoding of those transcripts specifically focused
on the subject of trust. It is important to note that trust
was not the focus of either research project. Instead,
it emerged as an important explanatory variable for
understanding organisational resilience in the case of the
CEO study, and the relationship between good governance
and performance in the AICD Chairs study. Consequently,
while questions about trust were asked in the interviews,
they were usually in response to comments made by
interviewees.
In terms of gaining a deeper insight into the role of trust,
our methodology is both a strength and a weakness. It is a
strength in that we made no prior assumptions about any
potential role for trust and, accordingly, did not adopt one
definition or assumption in favour of another.
This means the results direct attention to those aspects of
trust that the respondents valued, rather than imposing
the assumptions of the researchers. The weakness is
that the research methodology was not framed so as
to separate the ways in which trust may operate (i.e.
cognitive, affective or dispositional). As such, care is
needed when considering the findings; as while the
findings highlight some interesting patterns, they should
not be over interpreted.
Ultimately, this paper is designed to stimulate debate
about the various roles that trust may play in the
relationship between good governance and performance,
and to help guide further research into trust that supports
the effectiveness of boards.
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What role does trust perform?
The topic of trust has received considerable attention
in the academic literature since the late 1950s. Despite
this, it remains an elusive and complex topic. Webster’s
dictionary lists no fewer than 17 different definitions
of trust, with the way the topic is viewed often
dependent on the context or situation in which trust is
being observed. For this paper we are concerned with
understanding trust in the context of governance and,
more particularly, the role that trust might play in the
relationship between good governance and performance.
In the 2015 AICD study, it was found that trust
underpinned or enabled the decision-making team
(comprising the board and executive) to maintain:
• Diversity of views and experiences;
• Independence of mind; and
• Openness to alternatives.
These factors were found to support the capacity of the
board to make effective decisions and, in this sense,
it could be argued that the board provides a reflective
capacity for the executive as its distinctive role in the
broader team.
This view is distinctive from the vast majority of
academic research on governance, as it focuses on
processes of collective sense-making, and is therefore
talking to the strategic role of the board rather than to
the control-related i.e. regulatory and compliance roles
(Roberts, McNulty et al. 2005). It also begs the question
that if trust is critical to the collective sense-making of
those with governance responsibilities, is it viewed the
same way by both the board and executive and if so,
what role does it play?
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Differences between the board
and executive
Having extensively re-coded both the CEO and Chair data
sets, Figure 1 clearly illustrates differences in emphasis
between the board and executive in relation to the role
of trust. While the 2012 CEO study was concerned to
identify what helps build an organisations’ resilience to
uncertainty in the environment, we feel it is legitimate
to compare these two data sets as the Chairs considered
similar themes in describing the role of the board.
Figure 1 Role of Trust by Chairs and CEO
Supports critical reflection
Supports focus on outcomes and decisions
Supports deep relationshipsSupports predictability
Chair
CEO
Supports resilience through
collaboration
Supports open
communication
0%
5%
10%
15%
20%
25%
30%
35%
40%
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The key difference between the way the CEOs and Chairs
discussed how trust was valued related to the role of trust
in ‘supporting deep relationships’, which was favoured
by the CEOs, and its role in ‘supporting critical reflection’,
which was favoured by the Chairs. For the CEOs, ‘deep
relationships’ encouraged mutual support between parties
when the organisation found itself in times of need,
while ‘critical reflection’ (emphasised more by the Chairs)
referred to the quality of debate that could be achieved in
the pursuit of superior decision-making outcomes.
In our view, as both factors received considerable
attention from both groups, this difference reflects role
differences between the Chairs and the executive, rather
than a fundamental difference in the way that trust was
conceived. Significantly, both CEOs and Chairs placed
a high emphasis on the role of trust in supporting open
communication.
It is also worth noting that when discussing the role
of trust, the interviewees primarily referred to trust
between internal stakeholders, i.e. between the board
and its own members as well as between the board and
the executive. Although trust with external parties,
e.g. suppliers, was also raised this was mostly by the
CEOs. The importance of high levels of trust between
the board and executive may raise alarm bells as board
independence is typically concerned with the perceived
need for the board to operate at-arms-length from the
executive in order to fulfil its control function. This is
derived from, or reflected in, the assumptions of agency
theory (Eisenhardt, 1989) which has tended to dominate
thinking about the role of the board and good governance
(Pye and Pettigrew, 2005). It is argued from this
perspective, that without effective control, management
will seek to maximise its own interests at the expense
of the owners of the business. The role of the board,
therefore is to ensure that the remote or fragmented (in
the case of publicly listed companies) owners’ interests
are protected from the assumed risk of managerial
opportunism. It is also assumed that the board’s capacity
to perform this role is derived through structural
independence from the executive and its fiduciary
obligations in law. For some external stakeholders,
signals of an overly close (i.e. open and trust-based)
relationship between the board and the executive would
therefore be a red flag.
In contrast to the above, both the CEOs and Chairs
advocated the importance of trust, between the board
and executive, as an enabler of improved decision-
making. Indeed, accounts of organisational dysfunction
in the interviews often involved distrust as both a cause
and result of the problems experienced. This gives
rise to a possible tension between the needs of some
external stakeholders (regulators, the general public and
remote shareholders) and internal stakeholders. External
stakeholders may trust the company as a whole where
they perceive an arms-length relationship between the
board and executive management – seeing it as key
to avoiding downside risks (such as opportunism, rent
seeking and malfeasance). By comparison, internal
stakeholders may value closer collaboration and
coordination between the board and executive.
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Significantly, the Chairs in the AICD study were both
conscious of and concerned to achieve a balance between
these competing aspects.
[Chair 10] Well it’s interesting, the whole thing about
trust. I mean, you know, what does that mean,
really? They want you to bring up fresh questions
and make sure that money’s, you know, being used
properly and … I mean trust can be a bit passive,
can’t it? I mean you want to trust people are going
to do a good job and be professional, but you, don’t
want them to sort of all be the same.
This need for balance links directly to the direction of
governance reform, which, having responded primarily
to governance failures, has tended to be preoccupied
with the need for control, potentially at the expense of
the strategic role of the board. This has been challenged
in the wider research literature. McNulty and Styles
have argued, for example, that the board ‘... should be
‘engaged but non-executive’, ‘challenging but supportive’
and ‘independent but involved’’ (Roberts, McNulty et al.
2005: S6). They go on to state that:
‘... in practice, such accountability is realized
through a wide range of behaviours –
challenging, questioning, probing, discussing,
testing, informing, debating and exploring –
that draws upon non-executive experience in
support of executive performance.’ (Roberts
McNulty and Styles: S12)
This strongly aligns with the view of the Chairs and
supports the argument that independence of mind is more
critical than structural independence, however, to sustain
this robust challenge, within both the board environment
and in relation to dealing with the executive, the need
for a trust-based collegiality was crucial. Trust then is
essential to provide openness of communication, allowing
multiple perspectives to be voiced and heard – including
that of the executive. In the absence of trust, there is
naturally a greater likelihood of defensive behaviours,
and a tendency to withhold information and/or hide
evidence of poor organisational performance.
In this sense, trust provides the social ‘glue’ that
supports robust challenge while conserving the integrity
and quality of the interpersonal relationships. Again,
there is support for this in the literature. Peterson and
Behfar have established empirically, for example, that
intra-group trust moderates the impact of increased
task-related conflict (2003:10). All of which leads us to
consider how it is that the Chairs and CEOs believe that
trust works.
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How does trust work?
One of the few areas where there is broad agreement is
that trust involves a willingness on the part of someone
to accept vulnerability or to take a social risk (Bigley
and Pearce 1998). Clearly, to speak one’s mind and to
challenge others’ assumptions, in the way suggested
by the Chairs, involves taking such a risk. People are
only likely to take such risks to the extent that they
hold positive expectations about another’s intentions or
behaviours in relation to them (Mayer, Davis et al. 1995).
Social similarity has been shown to support more trusting
interpersonal relationships (Newcomb 1956). People with
similar backgrounds and experiences are more likely to
share similar values, beliefs and assumptions. This will
be conducive to more open exchanges and sharing of
views and, therefore, collegiate relationships. However,
this pathway to collegiality may come at the expense
of diversity. The Chairs interviewed for the AICD study
saw diversity of views as fundamental to better decision-
making and therefore performance. They were conscious
of the need to maintain and encourage diversity of views
on their boards by recruiting directors with different
backgrounds or perspectives.
[Chair 10] …there’s a sort of natural tendency to
sort of go with people that are like you … it sort of
takes discipline to say, “We’re going to look for, you
know, diverse thinking,” and know that that’s going
to probably be a bit harder. But in the end, hopefully
we’ll get some better decisions.
Within the wider push for greater diversity on boards,
it has been argued that women bring different views
and styles to men (Huse 2006). For the 2015 AICD
study, we purposefully oversampled for women in
the hope we could identify differences in perspectives
between genders. Analysis of the data in terms of overall
thinking about the relationship between governance and
performance – the primary focus of the study – identified
no significant differences between male and female
directors. However, in recoding the data set specifically
for considerations of trust, some interesting differences
emerged.
Figure 2, shows differences between male and female
directors in relation to the emphasis they placed on trust
and its role in governance. Whilst more than 20 roles
were identified in the transcripts, this was reduced down
to the 6 that were most frequently discussed and which
showed differentiation by gender. It is important to note
that the differences presented in Figure 2 are a function
of the frequency with which these dimensions were
discussed by interviewees. The assumption is that the
more often the concept came up in interviews, the more
important it was to the Chairs.
Supports predictability
Supports
focus on
outcomes
Supports open
communication
Supports
resilience
through
collaboration
Supports
deep
relationships
0%
5%
10%
20%
25%
30%
35%
40%
Male
Female
15%
Supports critical refection
Figure 2 Role of Trust by Gender
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For the male Chairs, there was a slightly greater emphasis
on the role of trust in ‘supporting predictability’; indeed,
this was also the case in the CEO sample . The role of
trust, from this perspective, is reducing behavioural
uncertainty. A person is trusted when the person
granting the trust has (based on experience) formed
a judgment that he or she can rely on that person to
respond in a predictable way (under certain conditions).
In this sense, trust is an expectation or prediction of an
outcome based on knowledge of the people and processes
involved. In the context of organisational resilience this
was important as it reduced one area of uncertainty in a
crisis and emerged as the primary theme around trust in
the CEO study.
Whilst the CEO study had a smaller percentage of female
respondents than the AICD study, it is significant that the
greater emphasis on prediction from male respondents
remained present with the Chairs. One Chair used an
analogy to team sports to explain that it is like:
[Chair 09]: …where you expect the individual
in a team sport to really perform well when they
are required to. You know, if it's football, when
they're going for the ball, they're expected to
perform well. When the team's defending, they're
expected to perform as a team, you know, and it's
not unlike that when a board operates.
Within the literature on trust, the making of judgements
about another’s intentions can be based on rational
assessment and prior experience (as reflected more
strongly in the male responses), or on gut feel. This
suggests two ways in which trust may work – rationally
or emotionally. These two possible sources of trust are,
respectively, referred to as cognitive and affective.
For McAllister (1995), the ‘cognitive’ refers to an
assumption that, at least in part, we choose whom we
trust and why for rational reasons. In these circumstances
we should be able to explain why, based on experience,
we choose to trust someone. This is an important
assumption in the context of governance as it suggests
that we consciously make trust-based decisions rather
than sub-consciously. The second of McAllister’s
categories, the ‘affective’ foundations for trust, relate
more to the emotional bonds between people (Lewis
and Weigert, 1985), where an emotional investment in a
relationship supports a belief in the virtue of the other
person and that those sentiments will be reciprocated. In
contrast to the cognitive perspective, ‘affective’ trust is
not necessarily conscious.
Some have argued that these two aspects of trust can be
integrated, with cognitive trust being more dispositional
(and hence innate) and affective trust more cultural.
Either way the judgment will inevitably be made on
limited information or experience, as a ‘rule of thumb’.
As such it may be subject to systematic preferences and
biases.
Trust, in this sense, serves to reduce the cognitive
load; if I do not have to focus on how others are doing
and can assume they will do their best to support the
organisational outcomes, I am free to focus more on the
other challenges at hand. For example:
‘… trust enhances the predictability of others’ actions
(Gulati, 1995). This enhanced predictability allows
exchange partners to anticipate others’ actions and
2 Of the 100 Chairs interviewed for the 2015 study, 30% were woman. All sectors were sampled this way. This compares with an average of approximately 22% female representation
on ASX 200 boards. (AICD statistics)
3 The number of female CEOs in the resilience study was 9 out of 50, or 18%. Gender was not a consideration in the sampling for that study.
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to adjust their own accordingly when the need for
such adjustment arises. Hence, trust also enhances
adaptive capacity.’ (Puranam Vanneste, 2009: 15)
This may apply to intra- as well as inter-group
dynamics, including between the board and the
executive. To the extent that these two key groups
have confidence in one another to do what needs to
be done, they can concentrate on adding distinctive
value befitting their roles, rather than attempting to
second guess one another. This, of course, opens up
the possibility of the ‘dark side’ of trust, in that the
assumption of trust may be misplaced and the trustor
may be blind-sided by betrayal.
It is of concern and somewhat paradoxical then that
‘... settings where trust is most needed – situations
of interdependence, potential conflict, and risk... are
those where betrayals of trust are known to be more
prevalent’ (McAllister 1997: 96). Trust as a basis for
future prediction may therefore be valuable in a crisis
but may not be something which could or should be
relied upon as a normal mode of operation.
Interestingly, female Chairs placed greater emphasis on
the role of trust in ‘supporting open communications’
and ‘supporting critical reflection’ rather than its role in
reducing uncertainty. These are closer to what Roberts
refers to as ‘socialising’ in nature.
‘...the opportunity to challenge, elaborate, clarify
and question – has the potential to engage more
fully the person and thereby offer a fuller sense
of personal recognition and identity. At the same
time, such open communication draws people into
a deeper sense of their relatedness to each other.
Indeed, in the absence of hierarchy it is only through
such processes of dialogue that individual differences
and interdependencies can be articulated. [these]
have the potential to be an alternative source of
identity at work, to build an immediate sense of
the interdependence of self and other, as well as to
generate shared, credible and possibly alternative
understandings of organizational reality.’ (Roberts
2001: 1554)
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The two factors, ‘Supports Open Communication’ and
‘Supports Critical Reflection’, were dynamically related
in that, for the Chairs, trust was both enabled by and
an enabler of these factors – suggesting the existence of
virtuous and vicious cycles of trust building. Typically,
the focus of discussion for the Chairs in describing these
relationships was the dynamics between the board and
the executive. For example
[Chair 02]…it's a very important thing to have
a shared relationship of trust between the board
and the CEO in particular. That needs to be a
trusted and shared relationship, very important,
… Because if you expect a CEO to come to the
board with his concerns, or her concerns, or with
doubts, that requires a safe environment for
the CEO to do that. So, that's important for the
Chairman in particular, to manage, to make sure
that the Directors don't judge the CEO for coming
with those uncertainties, or incomplete ideas.
In this quote, the respondent is noting the role of
trust in creating or reflecting an environment of
psychological safety (Edmondson 2003 ). Schein
(1985: 298) argued that psychological safety helps
people overcome the defensiveness (Argyris, 1990)
or “learning anxiety” that occurs when people are
presented with data that does not conform with their
expectations or hopes. This can thwart productive
learning behaviours. Psychological safety therefore
opens up a capacity to learn and change thinking, as
well as to hear alternative perspectives (Edmondson,
2003 : 5).
Importantly psychological safety has also been shown
to support greater task conflict (which is positively
related to group capacity to solve complex problems),
without giving rise to interpersonal conflict (which is
negatively associated with effective problem solving).
Forbes and Milliken (1999) argue, for example, that
the most effective boards will be characterised by high
levels of interpersonal cohesiveness while at the same
time encouraging task-oriented disagreement. This was
a view strongly reflected by the Chairs:
[Chair 32]: … it’s the personal qualities and it’s
this being able to operate in a collegiate process
but independently thinking at the same time.
And it’s getting that balance. You can be a very
independent thinker who just wants to think your
way and never, ever listen to what anybody else
says, which is going to be pretty disruptive on a
board. Or you can be the other way where you
just accept everything that’s said and don’t think
independently about an issue.
For women, then, the emphasis was more on the role
of trust in enabling effective group functioning – in
expanding the group’s capacity to respond to complex
problems and high uncertainty by harnessing the
diversity of views within the board and between the
board and the executive. This is a more relational focus.
These differences were, however, very much around
the margins and, overall, both males and females
placed emphasis on the same aspects; that is, those that
provided the ‘social glue’ to hold relationships together
while, at the same time, supporting robust challenge
and questioning in the interests of the organisation.
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What can we conclude?
From the above discussion we can conclude that the role
of trust in governance, to a large degree, depends upon
the starting position for the discussion and, indeed, the
stakeholder perspective being adopted. Puranam and
Vanneste (2009) argue that the approach chosen in
relation to governance typically corresponds to whether
the concern is framed as one of ‘minimising risk’ or
‘maximising performance’. The former tends to place
emphasis on how trust supports or undermines the role
of the board in exercising its control function, while the
latter is concerned with the role of trust in advancing the
strategic function of the board.
Given that the sociological research suggests that trust is
more readily lost than gained (Lewicki and Bunker, 1996;
Elangovan and Shapiro, 1998), it is perhaps unsurprising
that, in the face of persistent governance failures,
regulators have, to a degree, assumed a negative role for
trust in attempting to address instances of managerial
opportunism, devaluing the effective and legitimate role
trust plays in supporting organisational performance.
This is an excessively myopic view and runs the risk of
becoming an ‘own goal’ (Roberts, McNulty et al. 2005).
This paper has focused more on the role of trust in
relation to the boards’ strategic role (Pugliese, Bezemer et
al. 2009). From this perspective, based on the interviews
and organisational research, the conclusion is that,
‘... board effectiveness and ultimately, firm
performance may be enhanced by close, trusting
CEO–board relationships... (Westphal, 1999: 19).
The Chairs’ approach emphasised that trust forms part of
a ‘socialising’ approach to accountability, rather than a
‘policing’ one. Roberts (2001; 1567) has argued that this
approach has a greater impact on accountability due to its
immediate face-to-face nature:
‘One of the vital benefits of face-to-face
accountability between relative equals is that it
allows us to test and challenge our own and others’
assumptions through dialogue. On occasions, such
testing may only reinforce our concerns, but it may
also allow the other to overwhelm our assumptions
in a way that deepens and refines our reciprocal
understanding. Over time, such face-to-face
accountability is a vital source of learning and can
produce complex relationships of respect, trust and
felt reciprocal obligation, which far exceed the purely
instrumental orientation to action that agency theory
assumes.’
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Assuming mistrust, rather than trust, shuts down scope
for learning by denying participants the psychological
safety that is needed to support robust relationships,
which can remain viable in the face of questioning
and challenge. It is this quality of relationship which
the Chairs argue is at the heart of good governance,
and which balances the needs of both the control and
strategic roles.
Trust provides the level of social cohesion necessary for
effective decision-making under uncertainty by allowing
the diversity of views and experiences of the board to be
harnessed. Trust is built up gradually and incrementally,
reinforced by previous trusting behaviours and previous
positive experiences (McAllister 1995; Lewicki and
Bunker 1996).
The balance that the Chairs argued for can be slow
to build and all too easily lost. For this reason, it was
unsurprising that many Chairs described it as a sought
after ‘sweet-spot’ that was rarely experienced but, when
attained, was powerfully advantageous. It is of concern,
therefore, that while the regulatory focus remains with
the control function, too little is known about what helps
achieve, stabilise and sustain this quality of functioning
within the board itself and between the board and the
executive. There is therefore a need to better understand
how the behavioural dynamics of trust (Paliszkiewicz
2011), patterns of interaction, formal and informal
leadership, and organisational context influence
the quality of decision making (van Ees, Gabrielsson
et al. 2009).
If the Chairs we interviewed are right, and as Styles et
al have argued, ‘Actual board effectiveness... depends
upon the behavioural dynamics of a board, and how the
web of interpersonal and group relationships between
executive and non-executives is developed in a particular
company context’ (Roberts, McNulty et al. 2005: S11),
then the near absence of empirical research in this area
is an issue requiring urgent attention. Research with this
focus is far more likely to provide the sought after link to
organisational performance, than the current dominant
concern with the control function alone.
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