Coping With Competing Role Expectations: How Do Independent Directors Make Sense of Their Role?

Abstract

How do individual independent directors make sense of their director role? We examine this question in the context of competing expectations among key corporate governance actors during the onboarding process of independent directors. This study explores how independent directors navigate these expectations, which stem from both external change agents, such as government agencies and the media, and internal actors, especially management. Given the inherent ambiguity of their roles, which involve multiple board tasks and lack explicit definition, independent directors often face role conflicts. Our findings reveal that independent directors resolve these conflicts by adopting one of three role orientations: external adaptive, organizational alignment, or provisional balancing. Through this process, they construct their director role by coping with the expectations of key governance actors. This study contributes to the micro-foundations of corporate governance research by shedding light on the individual-level dynamics that shape how independent directors interpret and enact their roles.