Document Type
Article
Publication Date
1-1-2012
Abstract
Seventy-seven percent of low corporate governance ratings for U.S. publicly-traded companies are attributable to poorly-performing boards (GovernanceMetrics International (GMI), 2005). Research suggests a relationship between governance quality and financial performance with evidence of better performance by active vs. passive boards. While most governance research has focused on board member demographics to predict governance quality, few scholars have addressed board dynamics. Adopting a grounded theory approach to address this deficit, we conducted semi-structured interviews with 23 board directors of U.S. publically traded small- and medium-sized enterprises (SMEs) with high and low independently attributed governance ratings. Results indicate directors in both groups similarly distinguish front and back stage board environments characterized by discrete social norms ─ but respond to violations of them differently. More “democratically” recruited high governance-rated SME boards are less tolerant of deviant behavior and respond to it more directly resulting in higher board stability ─ while low governance-rated boards, commonly “inner circle” recruits, are more apt to purge perpetrators of affective conflict.
Keywords
SMEs, board governance, cognitive conflict, affective conflict, team dynamics
Rights
© The Author(s). Kelvin Smith Library provides access for non-commercial, personal, or research use only. All other use, including but not limited to commercial or scholarly reproductions, redistribution, publication or transmission, whether by electronic means or otherwise, without prior written permission is strictly prohibited.
Department/Center
Design & Innovation
Recommended Citation
Charas, Solange, "Out Of Control: The Impact Of Unaddressed Affective Conflict On SME Board Stability" (2012). Student Scholarship. 324.
https://commons.case.edu/studentworks/324