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Power and trust in board–CEO relationships

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  • Pingying Zhang

Abstract

In this paper we develop and test a theoretical model that reduces relational risks to solve the puzzle of conflicting task requirements imposed on boards of directors in listed companies. Doing so unites two seemingly conflicting tasks—board control and service tasks—through examining relational risks between the board and the CEO. We also present two mechanisms that could reduce relational risks. One is board power over the CEO, and the other board trust in the CEO. Practitioners could apply these two mechanisms to achieve better performance of board control and service tasks simultaneously. We test hypotheses using 441 survey responses collected in 2005. The result shows a good fit between the model and survey data, indicating examining relational risks is a rewarding approach to understanding conflicting board task performance, and board control over the CEO and board trust in the CEO are two effective mechanisms to reduce relational risks. Copyright Springer Science+Business Media, LLC. 2013

Suggested Citation

  • Pingying Zhang, 2013. "Power and trust in board–CEO relationships," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 17(3), pages 745-765, August.
    • Handle: RePEc:kap:jmgtgv:v:17:y:2013:i:3:p:745-765
    DOI: 10.1007/s10997-011-9188-z
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    References listed on IDEAS

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    Cited by:

    1. Nurit Nahum & Abraham Carmeli, 2020. "Leadership style in a board of directors: implications of involvement in the strategic decision-making process," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 24(1), pages 199-227, March.
    2. Kanadlı, Sadi Boĝaç & Torchia, Mariateresa & Gabaldon, Patricia, 2018. "Increasing women's contribution on board decision making: The importance of chairperson leadership efficacy and board openness," European Management Journal, Elsevier, vol. 36(1), pages 91-104.

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