Beyond agency conceptions of the work of the non-executive director: Creating accountability in the boardroom

This paper examines board effectiveness through an examination of the work and relationships of non-executive directors. It is based on 40 in-depth interviews with company directors, commissioned for the Higgs Review. The paper observes that research on corporate governance lacks understanding of the behavioural processes and effects of boards of directors. Whilst board structure, composition and independence condition board effectiveness it is the actual conduct of the non-executive vis-a-vis the executive that determines board effectiveness. Data about behaviour and relationships on boards suggest that traditional theoretical divisions between agency and stewardship theory, and control versus collaboration models of the board do not adequately reflect the lived experience of non-executive directors and other directors on the board. Developing accountability as a central concept in the explanation of how boards operate effectively enables the paper to both challenge the dominant grip of agency theory on governance research and support the search for theoretical pluralism and greater understanding of board processes and dynamics. Practically, the work suggests that corporate governance reform will be undermined by prescription that supports distant perceptions of board effectiveness but not the actual effectiveness of boards.