The role of corporate governance and boards in organizational performance

Cornforth, Chris and Chambers, Naomi (2010). The role of corporate governance and boards in organizational performance. In: Walshe, Kieran; Harvey, Gill and Jas, Pauline eds. Connecting knowledge and performance in public services: from knowing to doing. Cambridge: Cambridge University Press, pp. 99–127.

DOI: https://doi.org/10.1017/CBO9780511762000.007

Abstract

For more than two decades, successive UK governments have been concerned with modernising the delivery of public services and seeking performance improvements. As part of this drive, corporate governance arrangements across the sector have been reformed and much greater attention has been paid to the training, development and support of those serving on governing bodies and boards. An underlying assumption of these shifts in policy is that improvements in corporate governance arrangements, and in particular the working of boards, will lead to improvements in effectiveness. This chapter examines what evidence there is to support that assumption.

Before proceeding it is important to be clear about what we mean by corporate governance. The term governance has become an important concept in a variety of different disciplinary and practice arenas including management, public administration, public policy and politics. It has its roots in a Latin word meaning to steer or give direction. As Kooiman (1999) notes in a useful review article, the term is used in a number of different ways which can lead to confusion. He suggests one useful way of distinguishing between different usages is in terms of levels of analysis. The focus here is on the organisational level, and the term corporate governance will be used to refer to the structures, systems and processes concerned with ensuring the overall direction, control and accountability of an organisation.

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