Board member monitoring behaviors in credit unions: The role of conscientiousness and identification with shareholders

• Author: Marie‐Ève Lapalme,Michel Séguin,Sylvie Guerrero,Olivier Herrbach
• DOI: http://doi.org/10.1111/corg.12196
• Date: 01 March 2017
• Published date: 01 March 2017

ORIGINAL MANUSCRIPT

Board member monitoring behaviors in credit unions: The role

of conscientiousness and identification with shareholders

Sylvie Guerrero

1

|Marie‐Ève Lapalme

1

|Olivier Herrbach

2

|Michel Séguin

1

1

University of Quebec, Montréal –ESG, HRO

Dept, Montréal (QC), Canada

2

IAE de Bordeaux, Bordeaux Cedex, France

Correspondence

Sylvie Guerrero, University of Quebec at

Montreal–ESG, HRO Dept, CP 8888, succ.

Centre‐ville, Montréal (QC), H3C 3P8, Canada.

Email: guerrero.sylvie@uqam.ca

Abstract

Research Question/Issue This research investigates the antecedents of board members’

monitoring behaviors at the individual level. The main idea is that individuals who are both con-

scientious and identified with shareholders are those most likely to adopt monitoring behaviors.

Research Findings/Insights The study was conducted using a survey of 166 board mem-

bers of a large Canadian credit union corporation. Data on monitoring behaviors were collected

directly from the chairpersons of the boards they participate in. The results validate the hypoth-

esized moderated mediation model in which perceived importance of monitoring by board mem-

bers mediates the relationship between conscientiousness and actual monitoring behaviors, on

the one hand, and identification with shareholders moderates the relationship between conscien-

tiousness and the perception of the importance of monitoring, on the other hand.

Theoretical/Academic Implications By investigating the mediating effect of the perceived

importance of the monitoring role in the relationship between conscientiousness and monitoring

behaviors, our study provides an empirical test of the attention‐based view in the context of

boards of directors and thus contributes to opening the ‘black box’of board behaviors. Further,

by looking at the interactive effect of conscientiousness and identification with shareholders,

our study brings new insights into the motivational drivers of directors’monitoring behaviors.

Practitioner/Policy Implications This study invites practitioners in charge of board mem-

bers’recruitment and selection to reconsider their practices in order to target individuals demon-

strating high levels of conscientiousness. It also highlights the importance of implementing board

cultures that value conscientiousness and emphasize shareholders’interests.

KEYWORDS

Corporate Governance, Board members,Conscientiousness, Monitoringbehaviors, Social identity

1|INTRODUCTION

The recent waves of scandals that have shaken the business world,

including the financial industry, have drawn the attention of many

to the effectiveness of boards at fulfilling their different functions

and, more critically, their capacity to exercise their oversight role

(Giroux, 2013). This interest in the monitoring function of the board

is far from new, however. The literature on corporate governance

has devoted years of effort to identifying variables that can best cap-

ture effective board monitoring. In agency theory research, board

leadership structure, board independence, and board members’incen-

tives, among other things, have been used as proxies of effective

board monitoring, and have been related to firm performance.

However, results from empirical tests of these relationships have

remained inconclusive (e.g., Dalton, Daily, Ellstrand, & Johnson,

1998; Faleye, 2007; Iyengar & Zampelli, 2009; Rhoades, Rechner, &

Sundaramurthy, 2000; Wagner, Stimpert, & Fubara, 1998).

This has led researchers to question the relevance of exclusively

relying on such proxies and to call for the study of board performance

by assessing directors’actual monitoring behaviors and investigating

the factors that drive them (Boivie, Bednar, Aguilera, & Andrus,

2016; Dalton et al., 1998; Forbes & Milliken, 1999; Hillman, Nicholson,

& Shropshire, 2008; Huse, 2005; Roberts, McNulty, & Stiles, 2005).

Along these lines, a number of studies have undertaken empirical

investigations of the antecedents of board task performance and iden-

tified several board‐level characteristics associated with board

Received: 17 June 2016 Revised: 4 January 2017 Accepted: 6 January 2017

DOI 10.1111/corg.12196

134 © 2017 John Wiley & Sons Ltd Corporate Governance: An International Review 2017;25:134–144.wileyonlinelibrary.com/journal/corg