Power and trust in board–CEO relationships

Pingying Zhang ()

Journal of Management & Governance, 2013, vol. 17, issue 3, 745-765

Abstract: In this paper we develop and test a theoretical model that reduces relational risks to solve the puzzle of conflicting task requirements imposed on boards of directors in listed companies. Doing so unites two seemingly conflicting tasks—board control and service tasks—through examining relational risks between the board and the CEO. We also present two mechanisms that could reduce relational risks. One is board power over the CEO, and the other board trust in the CEO. Practitioners could apply these two mechanisms to achieve better performance of board control and service tasks simultaneously. We test hypotheses using 441 survey responses collected in 2005. The result shows a good fit between the model and survey data, indicating examining relational risks is a rewarding approach to understanding conflicting board task performance, and board control over the CEO and board trust in the CEO are two effective mechanisms to reduce relational risks. Copyright Springer Science+Business Media, LLC. 2013

Keywords: Relational risks; Power; Trust; Corporate governance (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (2)

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DOI: 10.1007/s10997-011-9188-z

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