The Power and Functions of Boards of Directors: A Theoretical Synthesis

Abstract

Many social scientists have assumed that the boards of directors (governing boards) of corporate organizations control their organiza- tions in name only. Others, examining the relationship of American social and business elites to the operation of welfare organizations and elite social clubs conclude that they are controlled by their boards. This contradiction is resolved by a theoretical analysis of the external "detachable" resources, personal characteristics, and strategic con- tingency situations conducive to more or less board power vis-a-vis executives. Bases of board power include control of resources and knowledge about organizational operation. Personal characteristics affecting board members power are social status and sex. Strategic contingencies are events of organizational life cycles, such as mergers, major program and goal changes, and selection of chief executives, conducive to the exercise of board power