City Research Online

Abstract

Boards are increasingly viewed as an important asset for the organization, with the potential to contribute to a sustainable competitive advantage(Huse, 2007d; Minichilli, Gabrielsson, & Huse, 2007a). There has been increased demand and pressure on boards regarding accountability issues and member liability during the last decade(Minichilli, et al., 2007a). These demands have been materialized in the developed Codes for Practice of Corporate Governance, internationally and nationally. One of the recommended actions in these Codes is that boards should perform an evaluation of their work.

The fact that board evaluations are recommended by many Codes of Corporate Governance indicates that they are considered an important corporate governance mechanism useful for assessing and enhancing board effectiveness, perhaps especially because of their possibility to assess actual tasks against expected tasks. Although the Norwegian Code for Practice of Corporate Governance recommends that board evaluations are conducted, it is left to the companies themselves to decide the different elements of the process. No research has yet been done to increase our knowledge about how board evaluations have been implemented by Norwegian listed companies. Thus, it is not possible to establish to what extent board evaluations contribute to enhanced corporate governance in a Norwegian context.

The thesis looks into board evaluation as a corporate governance mechanism. Multiple case studies (9 large listed Norwegian companies representing about 75 % of the market capitalisation as of 31 December 2007) of the implemented processes of board evaluation were performed. In each case, an average of three board members was interviewed. From this, valuable insight into the approaches adopted by Norwegian companies and factors influencing these approaches has been gained and an understanding of board evaluation as a means to increase board effectiveness developed.
The research shows that the process of board evaluation in listed companies may be categorised as a process which lacks structure, communication and involvement. The implemented processes of board evaluation in boards of Norwegian listed companies appear to be based on conformance, not performance, and board evaluations appear to be institutionalized.

The research adds to the concept of board evaluation. Empirical research into the process of board evaluation implemented in boards of Norwegian listed companies has given valuable insight into how board evaluations are performed and their role in a corporate governance context.

Based on the field research, a model of board evaluation was developed which can, if implemented, enhance corporate governance in a Norwegian context.

Publication Type:	Thesis (Doctoral)
Subjects:	H Social Sciences > HD Industries. Land use. Labor
Departments:	Bayes Business School Doctoral Theses Bayes Business School > Bayes Business School Doctoral Theses

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