Improving Corporate Governance Practices

Peak performing organizations may benefit from active value creating boards. Suggestions to improve board behaviour and corporate governance practices are presented in this article. The suggestions result from findings in the “Valued Creating Board” research programme. However, active boards working in a shareholder activism framework may destroy rather than support value creation processes within firms. In peak performing organizations corporate governance practices should be designed and developed to support innovation and the development of value creating activities. Our suggestions include the importance of a team production culture in the boardroom, how boards can contribute throughout the whole corporate value chain, a reorientation of the board chairperson role, and how to design a system for board evaluations. A framework for understanding the human side of corporate governance is introduced.