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    Leadership Behavior: Executive Team and Board of Directors

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    Approach this question from the perspective of the executive leadership but include the interaction between the executive team and the board of directors.

    Develop an analysis of the characteristics and team composition of leadership groups that might predispose these groups to deviate from standards of behavior either ethically or legally. How might these groups be organized or developed so that this risk is minimized?

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    Reviewing a few authors' point of view on Corporate governance and Corporate strategies:

    According to Felo, A (2001), Corporate governance structures can sometimes lead to conflicts between the interests of directors and shareholders. One potential conflict of interest involves the composition of the board of directors. Directors may be reluctant to discipline ineffective managers if they have an affiliation with the firm or its management team other than as a director. Inside directors (current and former executives of the firm or its subsidiaries or relatives of current executives) are the most likely to experience reluctance in confronting managers because of their direct relationship to the management team. Gray directors (directors who are executives in organizations doing significant business with the firm or directors who have provided consulting services to the firm) may also be reluctant to confront the firm's management team for fear of losing the firm's business. Having insiders serve on compensation committees can also potentially lead to conflicts of interest because inside directors may be motivated to structure the CEO's compensation package to please the CEO and not to provide the CEO with incentives to act in the best interest of shareholders. Because directors determine their compensation, director compensation could also potentially lead to conflicts of interest. For example, directors may not be motivated to maximize shareholder value if a relatively small percentage of their compensation is tied to the firm's stock price.

    According to Daboub, Rasheed, Priem, & Gray (1995). Corporate strategies followed by a firm could ...

    Solution Summary

    Leaders can influence corporate culture and motivate ethical behavior. They can create strategies to achieve positive outcomes to benefit their organization.