The Board of Directors as a Team: Getting Inside the Black Box

Abstract

As one of the primary internal governance mechanisms available to a firm, the board of directors has attracted considerable research attention in the past few decades. Nevertheless, mainly due to particular theoretical (i.e. agency theory) and methodological (i.e., input-output approach) limitations characterizing past research, academic knowledge with respect to how boards actually operate and what determines their effectiveness remains relatively limited. In this paper we argue for a team perspective on boards to address this research gap. In particular, we show that boards can be rightfully conceptualized as teams and suggest that introducing concepts and theories from team literature into board studies would prove to be a very fruitful approach in opening up the black box of board functioning. In this light, in drawing upon recent team literature, we develop and discuss a comprehensive theoretical model addressing the board of directors from a team perspective, thereby drawing attention to a number of interesting avenues for further research that board scholars may explore.