Morten Huse: Boards, governance and value creation: the human side of corporate governance

The subject of corporate governance, and particularly of board of directors, has received an increasing attention in the last decades (Lorsch, 1995). Since the ‘90s corporate governance has become a debated issue, because of its influence on the production and the distribution of value in organizations, and in the entire economic system (Zingales, 1998). Among governance issues, boards of directors are considered to be the most important one, because they are the organizational body at the apex of organizations (Fama and Jensen, 1983). In other words, they take the most important decisions for the firm’s future. For the relevance of corporate governance, and particularly of board of directors, in our society, it is very welcome to have a new publication on the topic. The title of the book reveals that the author starts from the premise that firms are tools to create value for the stakeholders, and that board of directors should be designed to be effective and accountable, i.e. to help companies to produce more value (Zahra and Pearce, 1989). The subtitle underlines that the focus and the main theme of the book is on the human aspects of corporate governance (Mace, 1971). This is a research-based book. It is the result of the long research experience of the author in the field of corporate governance, and particularly in the subject of boards of directors. The book is aimed at stimulating thinking on many crucial governance issues. It is not a handbook and does not provide recipes or final answers (if they exist!) to governance issues. The book is written in the management tradition, and it draws mostly from strategy and organization theories. The author adopts a behavioral perspective on boards of directors (e.g. Finkelstein and Mooney, 2003; Forbes and Milliken, 1999; Johnson et al., 1996). He goes beyond the analysis of the structure and of the public statements of board members. The book opens the “black box” of board of directors to investigate actual board behavior and the underlying processes (inside and outside the boardroom) leading to board effectiveness and value creation (e.g. Zona, Zattoni, 2007). The ultimate goal of the author is ambitious. It is to communicate research-based findings on boards and governance to a large audience including researchers, business school students, and directors. To accomplish this aim, he takes profit of his long experience in governance and boards from different perspectives: researching, teaching, and consulting.