The role of the Board of Directors in Corporate Governance - Achieving effectiveness
Psarelli, Maria
Purpose: Corporate governance is an important area of great interest to researchers, stakeholders and the general public. Nowadays, there exists an increased concern about the effectiveness of the board within corporate organizations, due to large corporate scandals, which pointed out the inefficiency of monitoring boards and the overseeing of the board’s decision making. This paper aims to investigate the variables that affect the board’s effectiveness and propose methods of addressing the problem. Design, methodology and approach: Through the method of literature review, firstly, we identify the key policy documents and codes of practice that deal with reform in Corporate Governance regarding the boards. Then, we try to determine the impact and acceptance those documents and codes have to the modern business world. Finally, we present the results of our academic research on the subject of board effectiveness and propose methods on how to achieve this effectiveness. Findings: We identify the existing pressure forces on the board of directors, we determine the variables of board performance, we establish the characteristics of highperforming boards and we proceed in the proposal of practices and processes to ensure quality function of the board. Value: The paper's contribution lies primarily on investigating issues relating to achieving effectiveness of the board of directors as a means to optimization of the corporate governance.
