Q1: Advise Julia Bishop about any issues she should be aware of in Positive Agency Theory. Also, outline differences in roles between Boards and the CEO (600 words)
Positive Agency Theory explains the relationship between principals, such as a shareholders, and agents, such as a company's executives. One of the principal assumptions of agency theory is that the goals of the principal (shareholder) and agent (CEO/Managers) conflict (Solomon 2010). Agency theory argues that by monitoring, corporate board members can observe and control senior managers’ interests such that they do not diverge substantially from those of owners (Dalton et al., 2007), thereby mitigating, at least partially, various costs associated with the separation of ownership …show more content…
What leadership facts and knowledge might benefit Bishop in adjusting or changing her leadership style (496 words)
Bishop has few leadership issues which needs to be changed or adjusted in order to ensure she builds an effective relationship with the board and also convinces the board of her plan.
Bishop needs to effectively change her authoritative and confrontational style of leadership and adopt a more conciliatory style of leadership in the new organisation. Having joined a new organisation, she needs to take time to study the leadership style of the chairman of the board and the members. Research suggests that that the most effective CEOs carry out their roles through ‘board-centered leadership’, which includes behaviours such as ‘facilitating interaction in board relationships’, ‘showing consideration and respect towards board members’, and ‘promoting board productivity’ (Heimovics and Herman 1990; Heimovics et al. 1995; Herman and Heimovics 1989, 1990a). These studies highlight the importance of understanding CEO–board influence as a critical element of executive …show more content…
To build the working relationship with her board, there are four things that are worth addressing for Bishop, as a new CEO in her first 6 to 12 months. They are to get comfortable with governance issues, meet individually with every member of her board, establish good terms of working relationship with the presiding director or nonexecutive chair and review the annual CEO evaluation process that the board will use to assess her performance (Behan, 2002). Bishop needs to be up to date on board related trade publications and materials to get a grasp of the governance and manage those issues seamlessly. Bishop could consider a mentorship opportunity with one of the lead directors as a trusted board mentor and a working partner. This will also help her get familiar with the leadership styles of other board members (Behan,
Positive Agency Theory explains the relationship between principals, such as a shareholders, and agents, such as a company's executives. One of the principal assumptions of agency theory is that the goals of the principal (shareholder) and agent (CEO/Managers) conflict (Solomon 2010). Agency theory argues that by monitoring, corporate board members can observe and control senior managers’ interests such that they do not diverge substantially from those of owners (Dalton et al., 2007), thereby mitigating, at least partially, various costs associated with the separation of ownership …show more content…
What leadership facts and knowledge might benefit Bishop in adjusting or changing her leadership style (496 words)
Bishop has few leadership issues which needs to be changed or adjusted in order to ensure she builds an effective relationship with the board and also convinces the board of her plan.
Bishop needs to effectively change her authoritative and confrontational style of leadership and adopt a more conciliatory style of leadership in the new organisation. Having joined a new organisation, she needs to take time to study the leadership style of the chairman of the board and the members. Research suggests that that the most effective CEOs carry out their roles through ‘board-centered leadership’, which includes behaviours such as ‘facilitating interaction in board relationships’, ‘showing consideration and respect towards board members’, and ‘promoting board productivity’ (Heimovics and Herman 1990; Heimovics et al. 1995; Herman and Heimovics 1989, 1990a). These studies highlight the importance of understanding CEO–board influence as a critical element of executive …show more content…
To build the working relationship with her board, there are four things that are worth addressing for Bishop, as a new CEO in her first 6 to 12 months. They are to get comfortable with governance issues, meet individually with every member of her board, establish good terms of working relationship with the presiding director or nonexecutive chair and review the annual CEO evaluation process that the board will use to assess her performance (Behan, 2002). Bishop needs to be up to date on board related trade publications and materials to get a grasp of the governance and manage those issues seamlessly. Bishop could consider a mentorship opportunity with one of the lead directors as a trusted board mentor and a working partner. This will also help her get familiar with the leadership styles of other board members (Behan,