The effects of director tenure on monitoring and advising: New insights from behavioral governance and learning theories

Research Questions/Issues: We integrate behavioral governance and learning theory to address the overarching research questions—“What are the core mechanisms driving a director's monitoring and advising effectiveness over board tenure?”; and “What factors affect how and when a director becomes and stays effective in the monitoring and advising roles?”. Research Insights: Our research provides new insights into director effectiveness by examining how a director's tenure, both independently and in concert with other moderating factors, affects the director's ability to be effective in the key but distinct roles of monitoring and advising. Theoretical/Academic Implications: We provide a nuanced and dynamic theoretical understanding of director effectiveness over time. We explain that the monitoring and advising roles that determine director effectiveness are each driven by different theoretical mechanisms, and we offer testable propositions that shed light on a director's ability to become and stay effective in their monitoring and advising roles at different points in their tenure. Practitioner/Policy Implications: Boards will benefit from the insights we provide for how a director's relationships with the board and CEO and a director's individual attributes help or hinder their monitoring and advising effectiveness over time. We discuss practical solutions for harnessing these insights to inform decisions around board composition, structure, and process. We also discuss policy implications, including staggered boards, refreshed boards, and term limits.