Who Controls Whom? An Examination of the Relation Between Management and Boards of Directors in Large American Corporations<sup />

TLDR

Boards of directors in large American corporations are widely believed to be dominated by management. The paper contests this view by redefining control and proposing a research agenda on board‑management relations. The authors introduce a framework that distinguishes long‑run from short‑run control, illustrate it with case examples, and address potential objections.

Abstract

Most organization theorists believe that boards of directors in large American corporations are dominated by management. This paper argues that this view is based on a problematic definition of control. Several distinctions between long run and short run control are presented, and a framework in which boards of directors have control over managers is suggested. Case examples are given and possible objections are confronted. Finally, an agenda for further research on board-management relations is offered.