ABSTRACT
The last decade of the 20th century and the decades of the 21st century pointed out a growing role of institutional shareholders (investors’ capitalism), followed by increased pressure from investors and market analysts to considerably strengthen the power of ownership control bodies in corporations: boards of directors (the Anglo-Saxon model) or supervisory boards (the German model), respectively. Active investors decided that passive boards were unable to satisfy their expectations in terms of monitoring and control of strategic management processes. However, according to research conducted by Stiles (2001), Cyert et al. (2002), Hendry and Kiel (2004), Anderson et al. (2007), Kumar and Zattoni (2018), Mali et al. (2018), most boards are still not directly involved in formulating corporate strategy. Also, Polish boards (the German model) investigated by the author of this chapter, primarily perform monitoring and control functions, though their members believe that they should be advisory and initiating bodies as well.
The aim of this chapter is to provide an overview of the worldwide discussion on the role of boards of directors in strategic decision-making processes.
The first part outlines the evolution of the board’s role in corporations over the last three decades. The second part presents the latest studies in this field including the author’s own research (Jezak 2010, 2016) and its implications for future studies in this area.
The main thesis of the chapter is the need to create a new model of board duties, and maintain an appropriate level of activity in carrying out its duties.
