The Effect of the Quality of Board Processes on the Performance of Board Roles in Iranian State-owned Enterprises

The purpose of this study is to investigate the effect of the quality of board processes on the performance of board roles of state-owned companies.

Due to information confidentiality restrictions, many government companies did not agree to participate in the study; therefore, the research sample was selected based on available sampling and finally 127 companies out of 543 state-owned companies were studied. A questionnaire was used for data collection and the sample consisted of 127 public companies. For data analysis, structural equation model (SEM) with partial least squares (PLS) approach was used.

The findings of this study indicate that the performance of board roles is significantly affected by the quality of board decision-making processes. The results show that there are strong significant causal relationships between board processes that some processes play a leading role over other processes. In addition, cognitive conflict and board cohesion indirectly through the two processes of norms of effort and the application of skills and knowledge, have a positive and significant effect on the performance of board roles. On the other hand, norms of effort only indirectly through the process of applying skills and knowledge, have a positive and significant effect on the performance of the strategic role, while norms of effort, both directly and indirectly have a positive and significant effect on the other two roles. Also, the process of applying skills and knowledge has the most direct impact on the performance of board roles, and other processes through the strong mediating role of this process have affected the performance of board roles.

The present study tries to show new aspects of the functional behavior of board members in the boardroom by developing a process model. The results of the study show that the behavior of managers at both individual and group levels should be evaluated and strengthened to improve the performance of board roles.