Promising avenue or dead end street? A meta analytic review of the Forbes and Milliken model of board behaviour

• Published date: 03 June 2019
• Date: 03 June 2019
• Pages: 471-489
• DOI: https://doi.org/10.1108/CG-01-2018-0017
• Author: Klaas Heemskerk
• Subject Matter: Strategy

Promising avenue or dead end street?

A meta analytic review of the Forbes

and Milliken model of board behaviour

Klaas Heemskerk

Abstract

Purpose –Over the past decades, growinginterest in the behaviour of boards of directors has brought

forth empirical studieson actual board behaviour. An important stream within this researchfollowed the

model proposed by Forbes and Milliken in 1999 in which the board processes, effort norms, cognitive

conflict and the use of knowledge,are hypothesized to influence the performanceof boards of directors.

This paper aims to take stock of the results from this stream of research. The sometimes inconsistent

results, and assumed methodological flaws of this research, leave open the questionwhether it makes

sense to continuewith this line of research.

Design/methodology/approach –Through a research synthesis of 17 primary studies on (parts of)

the model proposed by Forbes and Milliken (1999), this question is addressed directly by clarifying

what is known from the research done so far and by identifying possible distorting methodological

moderators.

Findings –Strong empiricalsupport is found for the effect of effort norms and the use of knowledge and

skills on board task performance. The evidence for cognitive conflicts however was found to be

inconclusive.Common method and respondent bias seemto be a lesser concernthan often stated.

Research limitations/implications –Future studies should not only look closely at the construct

validity of conflict, but should also have to account for the multidi mensionality of conflicts and the

interdependency and endogeneity in the relationship between behaviour and performance in

boards.

Originality/value –This is the first paper that systematicallyintegrates and reviews the empirical results

of the research followingthe Forbes and Milliken model and sketches roadsfor future research on board

behaviour.

Keywords Boards of Directors, Meta-analysis, Boardroom dynamics,Conflict management,

Boardroom effectiveness, Boardroom performance

Paper type Literature review

1. Introduction

Over the past decade of corporate governance research, the insight that it is not so much

the structural or formal characteristics that determine board performance, but rather social

and behavioural aspects has been gaining ground (Ong and Wan, 2008;Sur, 2014).

Several studies have been conducted, from different theoretical perspectives and with

different methods, on the behavioural processes within boards of directors (Murphy and

McIntyre, 2007;Neill and Dulewicz, 2010). Within this diverse stream of research, the

concise and researchable model presented by Forbes and Milliken in 1999 has been the

most promising avenue for the behavioural study of boards of directors. Huse considered it

to be one of the major building blocks in understanding behavioural perspectives on

boards, calling the article “a main point of reference for scholars wanting to explore

behavioural dynamics in the boardroom”(Huse, 2009c,p.64).

Klaas Heemskerk is based

at Amsterdam Institute for

Social Science Research,

Amsterdam,

The Netherlands.

Received 19 December 2017

Revised 11 January 2018

24 July 2018

13 September 2018

6 December 2018

Accepted 17 December 2018

©Klaas Heemskerk. Published

by Emerald Publishing Limited.

This article is published under

the Creative Commons

Attribution (CC BY 4.0) licence.

Anyone may reproduce,

distribute, translate and create

derivative works of this article

(for both commercial and non-

commercial purposes), subject

to full attribution to the original

publication and authors. The

full terms of this licence may be

seen at http://creativecommons.

org/licences/by/4.0/legalcode

This work was funded by the

Netherlands Organisation

for Scientific Research (NWO)

project no. 023.003 029.

DOI 10.1108/CG-01-2018-0017 VOL. 19 NO. 3 2019, pp. 471-489, Emerald Publishing Limited, ISSN 1472-0701 jCORPORATE GOVERNANCE jPAGE 471

The findings in the research on boardbehaviour and board task performance using Forbes

and Milliken, however, seem unclear and inconsistent. Although most researchers do

conclude that the behavioural determinants are a better predictor of board performance

compared to the formal and structural features, the effects of these behavioural

determinants differ across studies (Huybrechts et al., 2016;Kumar and Zattoni, 2017). The

effect of cognitive conflicts on board task performance for instance is sometimes not

significant (Zona and Zattoni, 2007), negative (Minichilli et al., 2012) or positive (Bailey and

Peck, 2011).

Despite the impact their widely cited article has had, these mixed results in subsequent

empirical research and the methodological issues associated with survey research on

organizational behaviour, left the promise of Forbes and Milliken (1999) to expand and

refine our understanding of what makes boardseffective unfulfilled (Huse et al., 2011).

Does it then make sense to pursue this rather disappointing line of research further or

should we abandon the Forbes and Milliken model altogether? Before we throw out the

good with the bad, we have to examine what the research into the Forbes and Milliken

model of board performance (FM-Model) has contributed up till now and asses how the

methodological issues it entails are to be addressedin future research on board behaviour.

Hence, a meta-analysis is performed on the effects drawn from empirical studies on (parts of)

the FM-Model in investigating the three board processes it suggests: effort norms, cognitive

conflict and the use of knowledge and skills. Meta-analysis allows us to test the hypotheses

within the FM-Model empirically with larger datasets than those reported in any single primary

study. Furthermore, meta-analytic research can identify possible methodological moderators

on the relationships found between board processes and board performance in the studies

under consideration. Three methodological issues associated with the research into the FM-

Model are addressed in this meta-analysis: common method variance, single respondent

bias and validity of constructs.

The effects of the use of knowledge and skills and effort norms on board task performance

are found to be significant across studies, while the effects of cognitive conflicts are more

heterogeneous(He emskerk et al.,2017). Contrary to what is often thought, common method

and response bias seem to pose no serious threat to the outcomes in research on board

behaviour as their moderating effects were nonsignificant. The construct validity ofcognitive

conflict was found to have a strong moderating effect. Operationalisations of cognitive

conflict aimed at the frequency of conflicts finds a negligibly small effect (

r

=0.01),while

operationalisations of cognitive conflict aimed at cognitive differences among board

members finds a mu ch larger effect (

r

= 0.37). This further emphasizes the complexity of

conflicts as behavioural processes and calls for recognition of the multidimensionality and

interdependency of conflicts in boards.

Section 2 discusses the hypotheses set forth by Forbes and Milliken (1999) and will further

extend the hypotheses from the FM-Model with methodological moderators to guide further

research. In Section 3, the method of meta-analysis is presented and discussed. Section 4

presents the results of the meta-analyses. The findings and the directions for further

research are discussed in Sections 5 and 6 of this paper.

2. Theory and hypotheses

2.1 The Forbes and Milliken model of board performance

At the close of the twentieth century, Forbes and Milliken (1999) published their influential

article on boards of directors as decision-making groups. They sought to understand the

processes and behaviours involved in effective board performance. To do so, they saw a

need to go beyond the demography-outcome approach and to incorporate the study of

process-variables in the study of boards of directors in order to disentangle the predictions

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