The soft underbelly of corporate governance (Part 1): The hardware of board dynamics
AbstractIn spite of the abundance of corporate governance codes, legislation to ensure compliance and stock exchange reporting requirements, corporate failures still persist because of poor governance. It can be argued that though the ‘rules of the road’ – codes, legislation, and requirements – are in place, the chances of governance failure will remain high if explicit attention is not given to ‘soft’ governance: The “black box of what happens behind the boardroom door” in terms of board dynamics. The rela- tively unstudied people side of boards remains the soft underbelly of corporate governance; its Achilles heel. The aim of this two-part paper is to address the elements affecting board dynamics and board performance, together with the consequential implications for corporate governance. A conceptual framework for soft governance is proposed by means of which board dynamics and performance can be explored and studied. This is Part 1 of the two-part article.
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