Who's influencing whom? A study of the influence of the CEO and the board of directors on organizational strategy

This dissertation is motivated by the opportunity to examine the fundamental attributes of principals and agents beyond an economically defined view to gain a deeper understanding of the mechanisms that influence the exchange relationship between CEOs and boards of directors.{09}While existing research has relied on the ownership structure to determine principals and agents in organizations, this dissertation will suggest that the interdependent nature of the relationship between the CEO and the Board of Directors can result in situations where both actors could fill either role. Within the framework of exchange theory, agency theory and resource dependence are used to provide a theoretical foundation for this research. As an exchange relationship develops as individuals interact over a period of time, the independence of the CEO and the composition of the Board of Directors will be used as proxies for characteristics of the relationship between the actors. These characteristics are hypothesized to influence the strategies pursued by the organizations as well as the organizational performance. Hypotheses were tested on a sample of Boys and Girls Clubs in the Midwest region and the results from the study extend our practical and theoretical knowledge of the relationship between the CEO and the board of directors in non-profit and for-profit organizations.