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Weekly UpdatesThere have been many surveys and studies done of corporate governance by any number of organizations and academic professionals. Most of these studies focus on corporate duties such as setting direction, formulating policy and monitoring results. Few delve into the psychological and social aspects of board governance. These aspects of governance explore some of the reasons that board members serve on cooperative boards and why they choose to stay on the board. More specifically, do good board relationships (social and professional) influence how board members handle issues and differences, how board members understand their role in the cooperative, and how committed board members feel to the organization?
To answer these questions and get a better understanding of some of the human relationships affecting cooperative board governance, nearly 500 board members and more than 600 CEOs of electric cooperatives were surveyed in 2007. The survey probed board members about their engagement with fellow board members, whether they felt appreciated and respected by their peers, and how comfortable they felt about expressing their opinion without jeopardizing their self-image. Respondents also answered questions about disagreement in the boardroom, about board social activities and, about their role in the cooperative.
This survey varied from conventional governance surveys in that it asked the same governance questions to both board members and CEOs. This was done to compare the two points of view and to overcome self-report biases. Studies have shown that when people answer survey questions about themselves, they tend to either overrate or underrate themselves, introducing bias into the survey results. Therefore, by asking the CEO to rate his or her board member--in addition to asking the board members to rate themselves--the responses could be compared without the risk of self-reported bias.
Dimensions of Board Member Commitment
One of the most significant attributes of the cooperative business model is the commitment that cooperative employees demonstrate to their respective organizations. The term "cooperative family" is an often used expression and there are many instances of successive generations working for electric cooperatives across the country. However, board commitment, unlike employee commitment, is an understudied and under-researched subject. One reason is that the role of board members is fundamentally different from that of paid employees. The organizational rewards (income, benefits, full-time responsibilities, advancement, etc) and the positive job outcomes (reduced absenteeism and turnover, improved job performance, increased productivity, etc.) associated with employees are not applicable to board members. Instead, board commitment has been associated with the role that board members have in the success of the organization. The goal of this survey and research project was to determine the nature and extent of board member commitment.
To measure board commitment, similar to the way employee commitment is measured, three attitudinal dimensions were used: Affective, Continuance, and Normative Commitment. Affective commitment is an emotional attachment and a sense of identity with the cooperative, or the feeling that, "I want to stay on the board." Continuance commitment is the feeling of personal sacrifice and benefit of staying versus the consequence of leaving, of the sense that, "I need to stay on the board." Finally, normative commitment is the sense of obligation and loyalty that one feels when it is believed that, "I have to stay on the board."
Survey Methodology
The survey sampled 844 electric cooperatives in 47 states. Over 400 individual board members and nearly 600 CEOs responded to the survey, which resulted in 319 matched board member-to-CEO pairs. The matching of pairs was critical to the elimination of self-report bias. The responses from those 319 matched CEO-board member pairs provided the data for the study.
The survey instrument was developed with input from several areas: prior governance surveys, a review of academic and practitioner literature, and the results of more than twenty personal interviews with cooperative board chairs and CEOs. Invitations to complete the survey were sent to one randomly selected board member from each cooperative and to the cooperative CEO.
The survey was administered online and by mail in multiple waves. The bulk of the responses were electronic (84%), while the remaining responses were by mail (16%). CEOs responded primarily electronically (99%) and board members responded by both electronic means (55%) and by mail (45%). After compiling all usable responses and matching the board member-to-CEO pairs, the multi-source data represented a response rate of 37%. Care was taken to ensure that the chances were 95 in 100 that the survey results did not vary by more than 5% from the result that would have been obtained if the surveys were conducted with all board members and CEOs at all cooperatives.
Rating the Dimensions of Board Member Commitment
The graphs that follow reveal that both the CEO and board member ratings on the three dimensions of board commitment were relatively consistent, especially on the continuance commitment. Ratings of 1 to 7 indicate the degree of agreement, where 1 = strongly disagree and 7 = strongly agree. A rating of 4 indicates a neutral response.
Overall two in five CEOs and board members (40%) felt that board members have a moderate emotional attachment and identity to the cooperative, while one in four (25%) felt that board members have a strong emotional attachment (affective commitment) to the cooperative. A majority (60%) report that board members have a very high sense of obligation and loyalty (normative commitment) to the cooperative.
Board members that display strong emotional bonds and a sense of belonging to the "co-op family," had higher affective commitment scores. Affective commitment measures represent the emotional attachment and identity a board member has with the cooperative. In other words, these board members "want to" stay on the cooperative board because they feel they are part of the cooperative family. Several of the questions asked to ascertain affective commitment were, "views the Co-op's problems as his/her own," "is very attached to the co-op," and "stays on the cooperative board because it has a great deal of personal meaning to him/her." As evidenced by the prior chart, CEO and board member ratings were nearly identical for affective commitment.
When board members feel they "need to" stay on the board, they scored high on the continuance commitment scale. Their feelings are expressed in personal sacrifice and the benefit of staying versus the consequences of leaving the board. The survey asked questions like "would not leave this co-op board because it would be too disruptive to his/her life," "stays on the co-op board because there are few rewarding board opportunities elsewhere," and "stays on this board because of the overall benefits (everything but pay) the position offers" to measure levels of continuance commitment. As shown on the chart above, the CEO rated board members slightly lower on the continuance commitment scale than what board members rated themselves. This was particularly evident on the question concerning board member pay, where CEOs felt that pay was more of a factor for why board members stay on the board than what board members felt about it.
To determine levels of normative commitment, the survey posed questions like "it would unethical to betray this co-op" and "it would be wrong to leave the board before his or her term expires because of loyalty to the co-op." High ratings on the normative commitment scale means a board member is committed to and remains on the co-op board because of feelings of obligation and loyalty. By either a sense of 'moral' obligation or an internal norm developed through socialization, or both, those with high levels of normative commitment remains on the board because they feel they "ought to."
Again, as the normative commitment chart shows, CEO scores were noticeably lower than the scores from board members. For example, the mean score for the question, "it would be unethical to betray this co-op" was 6.08 for CEOs, while the mean score for board members was 6.81. Apparently, motives of obligation and loyalty by some board members raised doubts among CEOs. Several comments by CEOs support this statistic: "publically criticizes board action," "fails to support a majority vote," "votes one way, then acts another way," and "has his/her own agenda."
Conclusion
Studies of organizational commitment with paid employees indicate that higher levels of commitment among employees lead to improved work performance and superior organizational results. The evidence is evolving to a more generalized belief that commitment is a measurement of an individual's identification with (and involvement in) a particular organization, leading to exceptional organizational outcomes.
Likewise, the results of this study suggest that higher levels of commitment among board members lead to elevated levels of commitment to the cooperative and to the cooperative's mission. Factors such as social and relationship building activities and ongoing discussions about board roles led to elevated levels of commitment for cooperative board members. The findings provide insights into why some individuals prefer to serve on cooperative boards and others do not, despite exposure to the same organizational context and compensation. This has valuable implications for board members, as it moves the debate away from traditional forms of board governance such as micromanaging the actions of management and controlling to many of the activities of the cooperative. Instead, it suggests that board members should focus instead on interpersonal practices, engage in role interactions (the difference between board and management responsibilities), and focus their work around the cooperative's mission.
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