Читать книгу Understanding and Managing Strategic Governance - Wei Shi - Страница 16

Mainly driven by the argument under agency theory that top managers have too much power and thereby use the firm for better perquisites (such as compensation), board members abide by an institutional norm holding that governance should be focused on control and overcoming potential managerial malfeasance, which is often labeled as the audit culture.²¹ Too focused on auditing, board members may not sufficiently emphasize the need for stewardship and providing strategic advice. As boards are primarily formed to oversee the decision-making processes of corporations, while CEOs and the top management teams are in charge of decision management,²² strategic governance should center on better use of the human and social capital of board members to improve, and not just watch over, strategic decision-making.²³

Because of the audit culture found on many boards, outside directors have not been used fully to contribute to strategic decision-making. However, outside board members can help shape the content, context, and conduct of strategy formulation.²⁴ According to a survey by Russell Reynolds Associates,²⁵ boards of companies that exceeded total shareholder return (TSR) compared to relevant benchmarks for two or more years in a row spend more time on forward-looking, value-creating activities such as strategic planning and review and oversight on major strategic transactions, and less time on audit or compliance activities than their fellow directors on other boards. As a result, “the emphasis on board independence and control may hinder the board contribution to the strategic decision-making.”²⁶