The Impact of the Board on Strategy: An Empirical Examination

Philip Stiles

Journal of Management Studies, 2001, vol. 38, issue 5, 627-650

Abstract: Boards of directors are coming under increasing scrutiny, both in the wake of a number of serious corporate frauds and failures and through a more general debate about the nature of corporate governance and its role in achieving national competitiveness. Though research on boards is growing, there remains a lack of empirical studies on the perceptions of directors themselves as to their role and influence in the running of organizations, and in particular the strategic process. This article responds to widespread calls for direct study of boards of directors by using a multi‐method approach involving an in‐depth examination of 51 directors of UK public companies, a survey of 121 company secretaries and four case studies of UK plcs, where multiple board members were interviewed. Through the use of a grounded methodology, this article examines the impact of boards on strategy and shows that by establishing the business definition, gatekeeping, selecting directors, and confidence building, the board influences the boundaries of strategic action. Evidence for the managerial domination of boards was slight, but the results showed support for a number of theoretical frameworks, suggesting that multiple perspectives are required to fully understand the nature of board activity.

Date: 2001
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