Exploring Board Behavior in a Public Context: Experiences from a Swedish Municipal Corporation

Abstract

Based on an eclectic behavioral theoretical approach and institutional logic, this study explores what constitutes board behavior in the public setting. The empirical material relates to a longitudinal case study of a local municipal corporation (MC). Whereas private sector board research tends to highlight the tasks of control and service, we have identified multiple board tasks in Swedish MCs: control, decision-making, service, conflict resolution, education, legitimizing the MC, and key value implementation. We also found four contingencies of board tasks in our data, namely board composition, board leadership, presidium empowerment, and board processes, thus providing further knowledge on the emergence of specific board tasks in MCs. By combining the eclectic behavioral and institutional logics perspectives, our study highlights how and why different board behavior emerges from an institutional frame. Our findings contribute to the nascent field of research on public boards by providing empirical insights into public board behavior.

Keywords:

• Board behavior
• board tasks
• institutional logics
• municipal corporation
• Sweden

Introduction

The topic of boards of directors, placed in the field of corporate governance, has long attracted research into organizations within the private sector, especially large capitalist corporations (Gabrielsson & Huse, 2004). This focus can be explained by its roots in early ideas about the joint stock company and the evident separation between ownership and control that needed to be handled (Smith, 1937). Despite the extensive tradition of board research, Heemskerk et al. (2017, p. 233) concluded, “We still know little about what transpires behind the doors of the boardroom,” and research emphasizes the need to embrace theoretical plurality regarding board behavior (Heemskerk, 2019).

Knowledge is even more scarce if we turn to the board of directors in a public setting. Despite a trend of “boardization” (Wilks, 2007), where the global wave of incorporating private sector thinking into public sector organizations (Thomasson, 2020) has led to a delegation of services to local-government-incorporated entities—hence municipal corporations (MCs) (Grossi & Reichard, 2008; van Thiel, 2015; Voorn et al., 2022)—our understanding of the entity governing these organizations—that is, the municipal board of directors—is in its infancy (Voorn et al., 2017). The entry of private sector thinking into the public sector did not just bring forward a new trend of “boardization,” but also challenged the established public sector governance structures (Grossi & Reichard, 2008). Thus, understanding how the boards of the incorporated entities function could potentially reveal whether and how governance of public services is affected by ongoing “corporatization” in the public domain (cf. Nelson & Nikolakis, 2012).

The MC differs from traditional local bureaucracy in that it has independent corporate status, where the board of directors is given the legal responsibility to monitor and govern the organization (Krause & Van Thiel, 2019; Voorn et al., 2017). Existing board research at the local government level has covered topics, such as the legal aspects of MCs (Thomasson, 2020), board structures and composition (van Thiel, 2015), MC boards in conjunction with other corporate governance mechanisms (Collin & Tagesson, 2010), the ambiguous role that boards have in MCs (Thomasson, 2020), the interplay between board structures and the context of state- or local-level organizations (Hinna et al., 2010), the ideal roles of boards in a public setting (Cornforth, 2002), and MC board work practices (Svärd, 2016). Other researchers have studied the board in state-owned corporations (An, 2022). To carry this new and still rather scattered research field further, the present study revisits the behavioral model of corporate governance (Forbes & Milliken, 1999) with application to the board of directors (Van Ees et al., 2009).

As board research has developed from the private sector, the particularities of hybrid organizations, such as MCs need to be acknowledged and understood (Olsen et al., 2017). For this purpose, public governance research has been inspired by institutional theory (Denis et al., 2015) and has explored how different institutional logics (Besharov & Smith, 2014) relate to organizations’ tasks and behavior (cf. Jönsson, 2019). This stream of research has primarily focused on organizational strategy (Smith & Umans, 2015), structure in terms of accountability, management control, performance management systems (e.g., Nguyen & Hiebl, 2021), and diverse measures of organizational outcomes (e.g., Knutsson et al., 2012). In this way, researchers have unraveled the complexity of how institutional logics inform the development and interaction of the different organizational features and outcomes. However, according to Ferry et al. (2021), scant attention has been paid to different actors and their interaction and behavior in the context of hybrid organizations that MCs represent (Maine et al., 2022). To bridge this void, we will utilize the literature on institutional logics and the eclectic behavioral theories of board research to explore board behavior in MCs. The main research question guiding the focus of this article is: What constitutes board behavior in municipal corporations?

Our empirical approach employs a longitudinal in-depth case study of a MC in the Swedish waste industry including interview and observations resulting in methodological contributions furthering our understanding of board behavior in the public sector.

Theoretical framework

Understanding board behavior

The predominant theory for studies of corporate governance and, as such, the board of directors, is agency theory. This theory states the necessity of controlling opportunistic managerial behavior by means of monitoring, incentives and goal alignment (Fama & Jensen, 1983). Agency theory thus views the board as a mitigation mechanism of the agency costs, and has limited capacity to explain board behavior (Smith et al., 2018). Van Ees et al. (2009) argue that in order to capture board behavior, agency theory needs to be complemented by other theoretical perspectives. For example, by relying on stewardship theory (Davis et al., 1997) and viewing the board as a good steward, one could gain a complementary understanding of how the board collaborates with and mentors the management. Introducing the resource-dependence perspective (Hillman et al., 2009) could further an understanding of how the directors’ competence and networks allow the organization to secure critical resources. Viewing the board from the leadership theory perspective (Finkelstein et al., 1996) could provide insight into how the board engages with the top management team in the strategic management of organizations. A leadership perspective also highlights the importance of acknowledging the aspect of power in and around the boardroom (e.g., Nahum & Carmeli, 2020). According to Van Ees et al. (2009), this reliance on complementary theoretical perspectives could allow for better understanding of board behavior.

Relying on the eclectic behavioral theoretical paradigm, the board behavior literature focuses on the “actors, processes, decision-making, relationships and interactions inside and outside the boardroom” (Gabrielsson & Huse, 2004) and explores the black box of board processes and board task performance. Based on a meta-analytical review of empirical studies on board behavior, Heemskerk (2019) concludes that there is still relevance in the model developed by Forbes and Milliken (1999) and further developed by Huse (2008). These conceptual models summarize different aspects of board behavior, which apart from the board characteristics includes board process aspects, such as effort norms, cognitive conflict, and use of knowledge and skills. Effort norms capture preparation, participation, and analysis, and refer to expectations of individual behavior; cognitive conflict represents disagreement between group members, and can include viewpoints, ideas, and opinions about the content of a task; and the use of knowledge and skills denotes a board’s ability to make use of different resources. Moreover, board decision-making culture, interactions inside and outside the boardroom and with top management in particular (Uman & Smith, 2013), and formal and informal structures and norms that aim at value creation, should be taken into account when exploring board behavior (Huse, 2008).

The models presented above provide a conceptual framework regarding board behavior, with a special focus on board processes and board tasks. In contrast with the tradition in board research, we do not limit the board tasks to service and control (Finkelstein & Mooney, 2003), but have an open mind regarding board tasks. This is especially relevant as we explore board behavior in the public context.

Understanding institutional logics

The study of institutional logics as one branch of institutional theory was introduced with the aim of placing emphasis on the social context (Friedland & Alford, 1991). Defined as “a set of material practices and symbolic constructions—which constitutes its organizing principles and which is available to organizations and individuals to elaborate” (Friedland & Alford, 1991, p. 248), it centers around rules that guide behavior and are more or less taken for granted (Reay & Hinings, 2009). Institutional logics are not predetermined and static, but continuously shaped by individuals and their interactions. Institutional logics exist on a macro level, framing the organizational fields, but are also present at the micro level through influencing the behavior of individuals (Olsen et al., 2017).

In a public context, institutional logics have gained interest as they offer a possibility to understand the sometimes vague and slippery concept of hybrid organizations (Skelcher & Smith, 2015). A majority of these studies are concerned with the dual nature of institutional logics, primarily focusing on different aspects of mission-driven or market-driven logics (Besharov & Smith, 2014; Maine et al., 2022). However, others (Nguyen & Hiebl, 2021; Olsen et al., 2017) suggest that dichotomizing the logics oversimplifies the reality in which MC exist, thus impeding our understanding of what is happening in these organizations; for example, what is going on in the boardroom. Following the idea of Olsen et al. (2017), this study frames the understanding of social context influence on human behavior via the following four institutional logics: the owner, stakeholder, user and company logic. Moreover, we consider the members of the board and the top management team to be “carriers of institutional logics;” and depending on the situation, the different logics inform their behavior.

Institutional logics and board behavior

Relying on the eclectic behavioral set of theories explaining board behavior and combining them with institutional theory, this study revisits models of board behavior. In contrast with earlier models (Forbes & Milliken, 1999), we do not limit the board tasks to those of service and control but have an open mind regarding board tasks and processes. Similarly, instead of relying on the idea of duality of institutional logics within MCs (Maine et al., 2022), we follow the idea of Olsen et al. (2017) that board behavior could be subject to multiple institutional logics and that these logics inform board behavior.

Method

Our case adheres to the context of Swedish MC. MCs have been a popular way of organizing public utilities in Sweden since the 1960s, and today there are about 1700 of them throughout the country (Statistics Sweden, 2021). The corporate model is predominantly used in the areas of technical services (water, infrastructure, energy) but today also includes services related to social welfare (Thomasson, 2020). Generally, the prerequisites of Swedish MCs are regulated by the Municipal Act (Kommunallagen) whereas their activities are regulated by the Swedish Companies Act (Aktiebolagslagen). Through the Municipal Act, municipal control is retained in the sense that the municipal council chooses the overall municipal objective of the operations, decides on the articles of association, appoints directors to the board, appoints lay auditors, and has the right to “take a stand” before the MC makes decisions that are “of greater importance.”

Through organizing the business in a limited corporation, the board of directors enters the field as an important entity monitoring the organization and its adherent operations. The common practice is for politicians, rather than industry experts, to dominate as board members. Hence, the selection of board members is normally based on the results of the local elections that take place every four years, where the political parties are given a set of directorial seats regarding all MCs in the municipality. The parties in turn nominate board candidates, and the municipal council appoints the directors.

Research method

A prerequisite of this study was to obtain access to an empirical field at the local government level where board behavior could be observed. Moreover, with an interest in carrying out a longitudinal study with an intense and continuous data collection process, we aimed for geographical closeness. As such, in spring 2019, we contacted MCs in our area, mainly operating in the traditional public areas of housing and waste. After initial discussions with the CEOs of three MCs, The Waste Inc. stood out as an interesting research partner willing to giving us access to diverse arenas of governance, including the opportunity to obtain rich empirical material (Pettigrew, 1990). Our sampling procedure was thus based on convenience and relevance, resulting in the opportunity for a team of three researchers to conduct field research in a MC for about one year, beginning in August 2019.

The main empirical material comes from observations and interviews (see Table 1), but we also used several types of archival data including annual reports, owners’ directives, the formal waste disposal plan, media articles and other documents presented at meetings. We were invited to observe activities in three arenas of relevance to the understanding of board behavior: the board meetings, the presidium meetings and meetings of the top management. The board meetings take place about every fifth week. The meetings include the board members, the CEO, the secretary, who also is the employee representative, and depending on matters, different employees may participate. The use of a presidium is a public praxis stemming from the legal duty of a county council to select a presidium including chair and vice chair(s) (Municipal Act, Ch 5). This has become praxis in the MC and the presidium consists of the board’s chair, vice chair and the top management team. One of its main tasks is to decide on the board agenda, but it also serves as an arena for discussion and information among the members. Observing the presidium enables us to take part in discussions preceding the board meeting, including aspects, such as how the agenda is set, on whose initiative, what is left out, etc. Finally, meetings of the top management enable observations of how the board is talked about, which matters become issues for the board, and so on. If we managed to participate in a sequential flow of these three meetings, we called it a “chain observation.” The importance of a chain is that it is an opportunity to observe if and how information quantity and quality change between the arenas. During all observations we took extensive field notes, including descriptions of the content of the meetings, the behavior of those present, and interactions. For the majority of the observations, two researchers were present, enabling comparison of field notes, critical and comparative reflections, validation of the analysis, and bringing further rigor into the analysis (Denzin & Lincoln, 2008).

Table 1. The Empirical Material.

	n	One researcher	Two researchers
Observations
Top management meetings	4	1	3
Presidium meetings	6	4	2
Board meetings	10	5	5
Auditor-presidium meeting	1	0	1
Annual general meeting	1	0	1
Total	22	10	12
Chain observations	4
Tot. time of observations (h)	47
Interviews
Management	4	0	4
Board members	7	2	5
Owner representatives	2	0	2
Municipality management	1	0	1
Total	14	2	12
Tot. interview time (h)	18.2

Throughout the year, we continuously talked to the people in and around the MC in different ways. These “talks” took place in connection with the observations, where we had spontaneous conversations with the different participants, including questions to clarify things, small talk about what was happening in the industry, and discussions of articles in the local newspaper. We also conducted 14 organized scheduled semi-structured interviews with managers of the MC, members of its board of directors, and municipal politicians and municipal managers, hence applying a purposive sampling strategy (Denzin & Lincoln, 2008). The interview guide was of similar character regarding the managers and board members, and included four themes: a warm-up discussion covering aspects of their individual backgrounds, such as education, work, and political experience, and why and how they became board or top management team members; their view on the role, responsibility and task of being a member of the top management or the board in a MC, the work process of the top management team/board of directors, for example through letting them talk about matters for discussion and matters of a strategic nature; and interaction between the top management team, board of directors, and/or other actors (i.e., owners). These interviews were held at the beginning of the project, from August to October 2019. The chair and vice chair were interviewed a second time, just after the owner dialog, which is a meeting taking place twice a year where the presidium of the Waste Inc. meets with the presidium or the whole city council board to discuss the corporation’s development and evaluate it, mainly with reference to the owner directive. The aim of these interviews was to capture what happened and was discussed during this meeting. At the end of the data collection process in June 2020, we interviewed two owner representatives, the city council and the vice city council. This interview focused on the governance of MCs. All interviews lasted one to 2 h and were recorded and transcribed.

The analysis of our extensive empirical material has been an ongoing process, starting with informal discussions between the researchers regarding what we had observed and talked about with a connection to our theoretical pre-understanding. The formal and structured analysis started after we had finalized the data collection process. Inspired by qualitative content analysis (Krippendorff, 2018), we first repeatedly read the textual information and then systematically coded and categorized the empirical material in order to identify patterns, meanings, and thematic structures. The structure of the analysis had three main parts, which are summarized in Table 2. The first part (Step 1) centered around searching for patterns in what the board was doing. This was theoretically guided by research on board tasks, board functions, and board role (c.f. Hillman et al., 2009), and the coding process ended with seven board tasks. Four of these tasks are deductively derived and, as such, follow the tradition in the corporate governance literature exploring the tasks of control, service, decision-making and conflict resolution. In addition to these traditional board tasks, a more inductive approach gave us the board tasks of legitimizing the MC, board member education and key value implementation. The second part (Step 2) centered on creating an understanding of why these board tasks emerged, thereby focusing on structural as well as behavioral aspects (c.f. Huse, 2008). The existing literature made us aware of structural and behavioral aspects, yet the analysis had an inductive approach in the sense of deriving themes of relevance to the previously identified board tasks and gave us the four contingencies of board composition, board leadership, presidium empowerment, and board processes. The third and final part (Step 3) was aimed at creating a deeper structural understanding (Krippendorff, 2018) of board behavior. Through this, the institutional setting of an MC appeared as especially relevant to consider, and the literature on institutional logics (e.g., Olsen et al., 2017), and especially the four logics of owner, user, company, and stakeholder logics, have guided this analysis.

Table 2. Structure Guiding the Analysis.

Step 1. Identification of board tasks
Board task	Board task content and what we sought for in the data
Monitoring	If and how the board monitors management and its different activities (Fama & Jensen, 1983), for example through follow-ups regarding budgets, investments, goal fulfillment. Evaluating that management work in accordance with decisions.
Service	If and how the board contributes with resources, e.g., through expertise & advice (Hillman & Dalziel, 2003); and generating and sustaining networks (Nordqvist & Minichilli, 2008).
Decision-making	If and how the board makes formal decisions, i.e., pinpointing the strategy (Pugliese et al., 2009), focus on, e.g., type of decisions, change in decisions, unanimous decisions.
Conflict resolution	If and how the board deals with conflicts among the board members where different interests guide their preferences (Collin & Smith, 2008).
Legitimizing the municipal corporation	Aspects, such as informative meeting agenda, extensive oral presentations/information on major/minor issues showing the board to be an arena for legitimizing its businesses.
Board member education	The importance of educating the board members emerged as an important board task where education refers to both industry and the task of being a board member.
Key value implementation	Different aspects related to the core value “all—together” emerged as an important board task
Step 2. Empirical identification of contingencies and their specification
Theme	Sub-theme
Board composition (cf. Ferlie et al., 1996)	Selection
	Experience
	Competence
	Role identity
Board leadership (cf. Ferlie et al., 1996)	Board chair leadership (formal leadership)
	CEO leadership (informal leadership
Presidium empowerment	Transparency—conflict reduction
	Presidium vs. the board—information asymmetry
Board process (cf. Forbes & Milliken, 1999)	Meeting arrangement
	Interaction
	Board member effort
Step 3. Institutional logic impeding what takes place in the board room
Logic	Logic orientation
Owner logic (Olsen et al., 2017)	Logics of politics—traditional forms of decision-making procedures
	Logic of bureaucracy—secure democratic control
User logic (empirically derived)	Logic of a consumer of the goods and services
Company logic (Olsen et al., 2017)	Logic of the market, seller and buyer, competition
Stakeholder logic (Olsen et al., 2017)	Logic of community—relations with actors outside the company

Our analysis is characterized as an iterative process, where continued follow-up discussions with the case company representatives were important in validating our analysis. Apart from more informal discussions, we conducted three formal follow-up presentations of our findings: one session with the presidium and the top management team (TMT), one with the board, and one with the chair and vice chair of the municipal council. These sessions have in a very relevant way served to validate and modify our analysis.

The case: The Waste Inc.

The case company, The Waste Inc., is a municipal limited corporation in the waste industry. It is part of the municipality’s business group, with the municipality holding all shares, and the owner is the democratically elected municipal council. Its production is mostly oriented toward collecting and partially processing waste from the households in the municipal area, and it has a monopoly on the household collection service.

At present The Waste Inc. is a rather successful corporation where the operations function as intended and are accepted by the users. In 2019 and 2020 it engaged in a huge investment (of about 10 million euro) to create an advanced waste collection park where people and corporations could bring their waste, characterized by circular thinking and following the EU norms of the waste hierarchy. The first phase of the construction process started in August 2019, and the park was finalized and opened to the public in September 2020. As the empirical data collection period also started in August 2019, this larger construction project and its progress was a recurring topic in the three arenas available for our observations. The performance of The Waste Inc. is evaluated based on specific goals expressed in a supplement to the company’s articles of association, called the owner’s directive. The owner’s directive is decided by the city council. The corporation’s achievements have led to the municipality being awarded several prestigious industry prizes, such as “Recycling & Waste Municipality of the Year” and “Waste Collector Driver of the Year.”

The board of The Waste Inc. follows the tradition of MCs in being composed by politicians. A new board was appointed after the election in 2018 and began work in April 2019, and so the board was already acquainted with its tasks when we initiated the data collection in August the same year. The new chair and vice chair had previous experience of board work, either in the MC or for other corporations, while the other board members had not previously been on a board of directors.

Empirical findings

This section includes two parts. In the first part we present seven board tasks. In the second we identify four contingencies and relate them to the board tasks. Moreover, we explore how institutional logics can be used to understand the observed board behavior.

Traditional and nontraditional board tasks

The following sections present seven empirically grounded board tasks that emerged from the data. Four are commonly identified as traditional tasks in the corporate governance literature (monitoring, service, decision-making, and conflict resolution (Collin, 2008)), while the remaining three are less commonly identified (legitimizing the MC, board member education, and key value implementation).

We observed aspects of the board’s monitoring board task with an emphasis on process control. The findings relate to continuous follow-up presentations on the status of a larger construction project. These follow-ups were requested by the chair, who early on clearly communicated at the board meeting his desire for simple recurrent follow-up presentations regarding the costs and progress of the project. The result of this initiative was that each board meeting included a follow-up presentation where a diagram was used to visualize the expenses in relation to the budget, making it difficult to monitor the progress. However, our interpretation is that the board appeared to be satisfied with this recurring presentation and only raised minor follow-up questions.

Apart from this specific request, no other requests relating to monitoring were captured during the observations. One might, for example, have expected that the goals stipulated in the owner’s directive would be a matter of relevance and specifically asked for, but this was not the case during our observations. Instead, our impression was that the directors were continuously updated about the progress of all different matters in the MC, both of more major strategic nature and of very minor nature, and that the directors appeared to be satisfied with this information.

The diverse information provided to the board covered aspects, such as implementation of strategic decisions made, updates on smaller matters, and the economic status in terms of budget, forecasts, and follow-ups. All of this provided opportunities to monitor, yet our observations suggested that the directors mostly just listened passively to this information; only on rare occasions did they discuss it, give feedback on it, or critically evaluate it. Another overall monitoring aspect captured through the interviews was the chair’s and the vice chair’s emphasis on their regular presence at the company. For example, prior to the board meetings they described that they preferred to sit in the canteen where employees had their coffee and lunches. This gave them an opportunity to talk to these employees, which, according to them, gave them a feeling of what was happening in the company and an update on job-related discussions.

The board of directors made formal decisions. Of the 10 observed board meetings, five included decision matters, and in total, nine unanimous decisions were made. These decisions were of varying nature and dealt with the document management plan, investment budget, extended loan frame, report of internal control, citizen proposal, annual report, plan for internal control, corporate governance report, and interim report. Irrespective of decision matters, none of them incited board discussions, and only one question was raised regarding one of the decision matters.

Among the board members, the chair and vice chair in particular appeared to have networks that were beneficial for the MC. Drawing on these networks thus represents an engagement with the service board task. One example concerns a specific situation where the vice chair, based on his political experience and network, composed and sent a letter to the Swedish government about troublesome industry regulations. In another example the chair gave input regarding possible co-operating partners. Both interviews as observations indicated that both the vice chair and the chair were well connected to the local politicians through their long political careers and presence on different committees at the municipal level. It is our interpretation that through, for example, interaction and being present on the municipal council, they were updated on what was happening in the municipality and could report back to the CEO, top management team, and board of directors about general or specific matters. However, our observations show that while reporting back to the MC, they did not provide advice to the management based on the information they had acquired.

Based on the board’s mixed political composition, we expected to find interaction related to conflict resolution, where the members’ political opinions would be aired. During our observations we could only capture minor issues where comments were raised that could be connected to board members’ party affiliations. Instead, our perception is that the conflict resolution board task emerged due to differences in directors’ individual preferences as users of the services provided by The Waste Inc. These individual user preferences created intense discussion in the board meetings, which in one case took up about an hour of the meeting. While the tensions were resolved through discussion, it seemed that the individual users’ opinions had superseded the board’s role of acting in the best interests of the MC.

We observed that the structure of the board meeting outlined in the agenda also served a purpose of legitimizing the MC. The board meeting agenda had an informative design, and consequently the board meetings were of an informative nature, where most of the time was spent on information matters provided by the CEO or other employees. In our opinion this agenda setting provided directors with information about different topics related to the corporation, of both major and minor nature, which they in turn could report back to their party groups. Our interpretation of the observations is that through consequently addressing issues of importance for The Waste Inc., aided by follow-up presentations and informative updates, the management, supported by the chair and vice chair, created legitimacy for the business of the MC.

The board meetings also included activities which led us to see these meetings as an arena for board member education. Through the interviews, we understood that the municipality provided all of the MC’s directors (who were appointed to the board by their parties after the general elections), with one day of training delivered by an audit firm and focusing on the mission of acting as a director and the legal aspects associated with it. Apart from the auditor’s engagement in educating the directors, the chair and vice chair decided at one of the board meetings we observed that at every board meeting the vice chair should address topics of particular relevance. Therefore, before each board meeting, we were able to hear how the vice chair or chair used 10–15 min for educational matters. Another aspect of board member education was related to getting to know the structure and practices of the industry. Through the interviews, as well as through discussions in the board room, we understood that on several occasions the management arranged study visits to relevant places in the vicinity, followed by a formal board meeting. We observed, however, that educating the board members on the limits of their discretion as members of the board or on industry practices was deemed more important than discussing the way in which the board could perform their monitoring task; that is, to assess financial or accounting competence.

One of the core values of the MC’s strategy as stated in different documents, e.g., the annual report, was “all—together.” The presence of this value could be observed in the board meeting, in a sense of key value implementation, capturing features, such as socialization and togetherness. One example from the observations is that different employees of the corporation presented themselves and their work tasks at the board meeting, which provided a personal and private touch. During the observations we also often listened to employees’ presentations about the areas of responsibility. From the interview with the CEO, we understood that these presentations were aligned with the CEO’s declared idea of letting people grow through responsibility. It is our interpretation that by introducing such practices and letting employees show their responsibility, the board became an arena for interaction between employees and directors, which in turn strengthened the feeling of togetherness. The feeling of togetherness was further strengthened by observing how board members were encouraged to participate in Christmas and Easter lunches arranged by the corporation, where the discussions after the events indicated that the directors interacted with management and employees in an informal environment. These social events, which took place outside of the board meetings, were well attended by board members and were described by management as important for creating a feeling of doing things together. Our observations of how these events were talked about afterwards support the interpretation of a strong and important focus on the key value, encompassing a feeling of doing things together.

Contingencies of board tasks

When we sought reasons for the presence of the previously presented board tasks, four themes emerged as important in understanding board behavior: board composition, board leadership, presidium empowerment, and board process.

Board composition

The theme of board composition encompassed aspects related to board member selection, board member experience, board member competence, and role identity.

All board members were politically elected. The chair and the vice chair had been part of the board during the previous mandate, whereas the other members were new to the assignment and had joined the board in spring 2019. Legally, MCs may appoint external (non-politician) board members. This matter was discussed during the interviews with management, politicians/owners, and board members, who did not see any need for external board members. The respondents argued that with competent management that knew the business, there was no need for external input. As well as having experience on the board of this MC, the chair and the vice chair had other board and committee experience, primarily from the public sector but also from the private sector. The other board members had no previous experience of board work, and none of the board members had relevant industry experience. Thus, the composition of the board of directors was characterized by political connections and public sector knowledge, but our interpretation is that they seemed less well equipped in terms of industry experience and competence as well as in experience of being board members.

It appeared to us that the board composition was informed by owner logic, which includes the logics of both politics and bureaucracy (Olsen et al., 2017). The board selection and composition were functions of political elections, which also meant less emphasis on experience and competence from the industry and more emphasis on proportional political representation. Company logic appeared to be informing the board members’ focus on their business roles or the lack thereof. However, this company logic seemed to have collided with what we call a user logic, which informed the directors’ discussions of the user perspective, where in principle they thought of themselves as being the users. It also appears that the presence of a dominating owner logic suppressed the presence of the company logic and gave rise to user logics, all of which in turn were reflected in the tasks performed by the board. Lack of critical evaluations, lack of strategic discussions, and limited monitoring capacity/presence could be explained by the primacy of political representation in the board (owner logic) rather than emphasis on the importance of board members’ understanding of the business and industry (company logic). Discussions in the board room stemming from the board’s politically imposed composition (owner logic) signaled a lack of coherent understanding of the board’s role, which explains why board member education with a focus on industry knowledge and being a board member in a public setting represented a board task. The political composition of the board of directors (owner logic) and the public sector context in which the MC operated provides an explanation for the board having legitimizing the MC as a task. This task was derived from observations of extensive and at times passive information intake by the directors, aimed at ensuring they were well equipped in their task of reporting back to their respective parties. Moreover, the board members’ political experience and competence, being part of politically imposed composition (owner logic), could explain the service task of the board. This task was especially apparent in instances when board members provided informed political and municipal context to some discussion in the boardroom. Finally, the divergent understandings of the board’s role, with tensions between the business and the user role, could explain the conflict resolution task of the board. Particularly in the instances where user logic was applied by the board members, the more experienced chair and vice chair evoked the company logic and stressed the importance of board member business roles and the need to adhere to them. After resolving the conflict by evoking the company logic, however, the board reverted back to the task patterns associated with the owner logic that appeared to suppress the emergence of other logics.

Board leadership

The theme of board leadership encompassed aspects related to board chair leadership and CEO leadership.

The board was formally led by the board chair, a person with former military experience who was described by board members and owners as a “distinct chair with authority and ability to speak up.” The chair was experienced in and knowledgeable about the public sector; he had gained this experience by being a member of the city council, and we observed through the interviews that he appeared to have a good network within the municipality. In our interpretation, the chair was loyal and attached to the MC, and he paid weekly visits to the corporation, where he would meet employees by installing himself in the canteen for employees and taking the opportunity to talk to them in order to “get a feeling of what’s happening.” Before it was formalized and distributed to the directors, the board agenda was discussed in meetings of the top management team and the presidium. Observations from these chains of meetings indicated that the board agenda was mainly driven by the CEO and top management; only one input from the chair was noted.

In the board room, we observed that the chair led the meetings in an affirmative way, legitimizing and acknowledging the management and employees of the MC. This was done, for example, by highlighting organizational achievements and emphasizing them as a function of joint efforts, which was interpreted as creating a feeling of “we are doing good” and “we are doing this together” in the boardroom. Moreover, from the interviews, we understood that in the meeting with the owners, the chair emphasized the good performance of the MC and highlighted the proactive behavior of the board, management, and employees in certain matters. The chair was also observed to take a disciplinary role toward the directors, when he reprimanded board members for exceeding their mandate. In response to this behavior of the directors, the chair, together with the vice chair, also took on the role of educating the board members regarding board work. From the observations, we noticed that the chair’s leadership centered around preparing the board to make timely decisions, yet he de-emphasized the need to monitor by declaring that, as chair, he had already taken care of the “heavy stuff” in the presidium meetings. Hence, it is our interpretation that by empowering the presidium, he diminished the role of the board. We also noticed that the chair’s leadership had a limited focus on initiating discussions and analyses or intervening in user-specific discussions that lacked strategic importance. Instead, we observed that he protected his importance through the way in which he legitimized management in the boardroom but also in the municipality, through being present in the municipality and having a relevant network.

In addition to the chair, we identified the CEO as a significant informal leader of the board. He had been employed in the corporation since 2010, and was appointed CEO in 2014. His education and previous work experience in both the private and public sector made him well equipped for this role. Our interpretation of observations and interviews regarding the CEO led us to characterize him as distinct in his opinions, preferences, and decisions; proficient/skillful in his knowledge and competence regarding managing a MC in the waste industry; perceptive about the political and public sector characteristics; responsive to the suggestions of different actors, such as board members or politicians and in actions related to these suggestions; passionate about the cause due to possessing an enormous personal interest in environmental matters; engaged in networking outside the corporation, the municipality, and even the country; and proactive in many matters of both operative and strategic nature. Given these positive characteristics, the CEO appeared to be both liked and respected by the board, and our feeling was that he stood out as one of the major reasons for the current success of the MC. Based on our empirical material, he appeared to have a high level of discretion both outside and in the board room, and was an important leader of the board meetings. His strong position regarding the board was also signified by his continuous presence at all board meetings. During our observations, there was never a case when he was asked to leave the boardroom, which is something that the board has the right to do in cases where CEO salary or performance are being discussed. It is further our interpretation that the chair and the CEO had a good relationship and showed each other mutual respect. Both in interviews and during observations we noticed how the chair in particular frequently acknowledged the good work and numerous accomplishments of the CEO, both inside and outside the boardroom.

Our observations suggested that the board leadership was a diarchy of the CEO and the chair, who aligned with each other in managing the board. The CEO’s leadership of the board seemed to be informed by the company logic, where the business operations of the corporation and the CEO’s discretion to act on his own initiative were in focus. Conversely, the chair’s leadership of the board was informed by a stakeholder logic centered on maintaining the facade of control and harmony as well as keeping the owner’s and the wider community’s interests in focus. It appears that both logics were in alignment here, especially given that the economic health of the corporation also represented the stakeholder interest, and this alignment predisposed the board toward a diarchic leadership and informed the board task of legitimizing the MC. Thus, in our case company we find that compared with the board composition where the owner logic has been suppressing the business and user logics, the board leadership, especially viewed from the diarchy perspective, was informed by the alignment of company and stakeholder logics.

It appeared, however, that despite occupying a formal position of power, the chair’s board leadership in relation to the board was also informed by the owner logic, where both political and bureaucratic aspects played an important role. Faced with rather inexperienced and passive directors, the chair saw a need for education of the board, which thus became a board task. This signaled the chair’s interest in increasing board competence, especially in the board mandate, to potentially satisfy political and bureaucratic expectations (owner logic). However, the interest in providing directors with the education in financial knowledge that would allow them to fulfill their task of monitoring the financial aspects of the corporation appeared to be limited and deemed unnecessary. Legitimizing the MC was further reinforced, in the bilateral relationship between the chair and the board members, as an important board task. Through leading the other directors, the chair could affirm management actions within the board and serve as a representative of the corporation in the municipality, thus affirming to the owners that their interests were in focus. Being well informed about “what’s happening” was something the chair felt strongly about; he saw it as something that allowed him to perform the service task of information provision in relationship to the management and the board. Having stability and predictability in the MC—especially from the owner logic perspective—might have been something that guided the chair in his alignment with the CEO through emphasizing the key value of “togetherness.” However, in bringing this key value forward, the emphasis was placed on the board’s alignment with the management, hence promoting governance from a management rather than a board perspective, which could be partly explained by the company logic that the chair appeared to adopt in forming the relationship with the management. It appears that applying owner logic in relation to the board and relying on company logic in relation to the management, the chair tries to strike a balance between these logics. Yet the intended alignment of the logics results in dominance of the owner logic over the company logic.

Thus, it appears that board leadership is being informed by an alignment between company and stakeholder logics, where logics appear to be on a par in terms of the hierarchy of logics and further alignment between owner and company logic, yet with dominance of the former in this alignment.

Presidium empowerment

This theme covered aspects related to the empowerment of the presidium.

During our observations we observed formal meetings in the presidium. These meetings included the top management team, chair, and vice chair. The meetings were formally chaired by the chair; however, we noticed that it was the CEO who led the discussions. It appeared important that the presidium was well-acquainted with the board agenda, and our impression was that this aim was achieved. Nevertheless, on one occasion an issue was just added as “other” in the board meeting agenda, having not been discussed beforehand in the presidium, and this caused intense discussions, mainly driven by the vice chair. It thus seems that transparency in the presidium reduced the presence of conflicting discussions in the boardroom, since the chair and the vice chair had already been informed and had the opportunity to discuss board matters. We also observed how the chair emphasized that full details of complex issues were unnecessary in terms of board information, and instead suggested, for example, simplified graphs and overarching budget presentations. Moreover, he diminished the monitoring role of the board by saying that he was in control, as he obtained more information in the presidium meeting; this, however, was not something that we observed to take place. We also witnessed how the chair tried to diminish the importance of the board and elevate the importance of the presidium by suggesting at the start of the COVID-19 pandemic that board meetings should be canceled and only the presidium meetings should take place.

The presidium empowerment appeared to be informed by the company logic in that the presidium was an arena used for running The Waste Inc. as a corporation, with a focus on firm performance and efficient decision-making procedures. By aiming at efficiency and transparency within the presidium, the parties represented in this arena diminished the role of the politically composed board. The reduction of potential conflicts within the board was used as a pretext here. Guided by the company logic and aiming at efficiency, a categorization of “us versus them” took place, with “we” represented by the “superior” presidium and “them” represented by the “less superior” board of directors. This distinction, however, did not necessarily result in conflict between the two arenas. One explanation for this was the limited board and industry experience among “them,” which was something that the presidium aimed at reducing, mainly through board member education. The reduction of the potential conflict through transparency appeared to have an adverse effect on the board task of monitoring, which became limited, given that the actual monitoring and scrutiny were taking place in the presidium. Thus, it appears that within the presidium, empowerment was informed just by the company logic and neither conflict nor alignments with other logics could be derived.

Board processes

The theme of board processes encompassed aspects related to meeting arrangements, interaction, and board member effort.

Through the observations and interviews we understood that the top management worked in a transparent online system which enabled them to track and update the status of many aspects in a structured way, one such aspect being the board meeting agenda. Our observations showed that this agenda was initially created in meetings of the top management, and then discussed and formally decided in the presidium meeting. From our observations, we realized that the board agenda was dominated by information matters rather than strategic decisions. The decisions that were to be taken by the board were usually based on pre-distributed documents; however, all other matters on the agenda had no prior information attached to them, and the board was verbally informed about these matters during the board meeting. While observing the board meetings, we understood that the large amount of information enabled board members to follow what was happening in the MC, and the members were thoroughly updated on the progress of different projects and different issues. However, we also perceived that the absence of written material made it difficult for the directors to prepare and ask questions or identify problems. We noticed a lack of discussion-oriented design, and instead we took part in meetings with a one-way flow of information, with limited possibilities for reflection and discussion.

At first glance, we made the interpretation that the meeting arrangements mirrored the preference of the CEO, who wanted to avoid discussions. However, since he did not seem to have a need to avoid discussions, our feeling was that the structure of the meeting was rather the result of the presence of inexperienced board members who had limited industry knowledge and who found comfort in their understanding of board work in the sense that they preferred to listen to presentations and ask minor questions. We noticed that the chair of the board could oppose and raise different preferences but also appeared to be satisfied with the arrangement. Hence, it is our interpretation that the meeting arrangements followed a leadership approach which empowered the management and in which information matters were predominant.

While observing the board meetings, we noticed that the interaction in the board room was dominated by presentations from the management side, with the board of directors playing a more passive listening and confirmatory role. We observed and experienced a very positive working climate in the boardroom, but we also observed some intense discussions. These discussions were more of an operational/customer character than related to matters of strategic importance. The intense debates we observed between individual directors and the CEO or other members of top management did not end with any final decision or voting, but instead with the CEO saying, “This is a management decision,” after which the debate abruptly stopped. In principle, the board could still have decided to make these matters a matter for the board to decide upon, but that stand was never taken. We were made aware that one board member took one matter further, to the owners (i.e., the politicians), signaling the limited power of the board, yet the standpoint taken by the management on that matter was never challenged.

We never observed the board becoming engaged in strategic decision-making; instead, they adopted a passive and listening role, being “encouraged” by the chair to make decisions when necessary. Overall, we noticed rather low levels of preparation and participation among the board members, hence low board effort. This was in line with the expectations of the board leaders (chair and vice chair), who never raised this as an issue in need of change. Thus, we made the interpretation that overall, the board interaction was of an operational nature, signaling weak directorial activity, and was primarily driven and managed by the CEO.

The board processes appeared to be informed by owner logic; that is, a combination of political and bureaucratic aspects. This was reflected in the board tasks; for example, the meeting arrangements and structure followed the leadership approach, aimed at empowering the management and dominated by information matters. The arrangements of the meetings and the simplified information given to the inexperienced and politically appointed board members allowed limited space for monitoring. The continuous information provision could be seen as a way to satisfy the board members’ need to report back to their political parties; that is, the task of legitimizing the MC. The meeting structure resembled the interaction between professionals and politicians in local government administration, where politicians are not supposed to intervene in the work of professionals, and decisions put to the board agenda are approved rather than discussed. Similarly to meeting arrangements, it appeared that owner logic also informed the interactions and efforts of the board members. When it came to interaction, the opinions of the professionals (i.e., the CEO and top management) and the truthfulness of the information they provided were taken for granted, and led to limited monitoring, yet the very presence of this interaction and the occasional conflicting discussions (that ended with the CEO victorious) provided the board with legitimacy which was ultimately reflected in legitimizing the MC as a board task. Having politicians on the board with no prior board or industry experience manifested itself in low board efforts which were similarly related to the owner logic, which was characterized by political representation. Thus, similarly to the presidium empowerment, board process was informed just by ownership logic that found neither alignment nor conflict with other logics.

Institutional logics and board behavior

Our empirical findings suggest, apart from the traditional board tasks outlined in the corporate governance literature (monitoring, service, decision-making, and conflict resolution), the presence in our case of other, less commonly identified tasks (legitimizing the MC, board member education, and key value implementation). In trying to explain the presence or lack of these tasks, we identified a number of contingencies related to the tasks. Interpreting board tasks and contingencies, and by extension board behavior, from the institutional logics perspective, our analysis suggests that the logics appear to be in alignment rather than in conflict with each other. Yet it appears that in the alignment between owner and other logics, the former dominates, which might explain the peculiarities of board behavior in our chosen organization.

Discussion

This article was inspired by Heemskerk (2019), who suggested that advancements in board research are contingent on embracing theoretical plurality as well as sharpening the focus on behavioral aspects, such as actors, processes, decision-making, relationships, and interactions, in and around the boardroom (Forbes & Milliken, 1999; Gabrielsson & Huse, 2004). By relying on eclectic behavioral theoretical frameworks and directing our focus toward the board aspects, we have explored what constitutes board behavior in a MC.

Our analysis suggested that traditional theoretical perspectives applied in studies of board behavior provide insufficient explanation of the behavior of the board in the context of Swedish MCs. Instead, it appears that the institutional logics perspective might be adding a more nuanced explanation of board behavior as well as highlighting how and why assumptions of the traditional corporate governance perspectives both diverge and converge when exploring governance arrangements in the context of MCs (cf. Olsen et al., 2017). One example is represented by the agency theory assumption of the importance of the board task in controlling managerial action (Fama & Jensen, 1983). Yet our findings highlight that board control in the MC was present only to a limited extent, and that formal control manifested through reliance on the specific documents or output measures was rarely used. Our analysis suggests that one reason for the limited presence of monitoring could have been the political composition of the board, which had limited business and board competence, aspects explained by the dominance of the owner logic, which in a MC context connotes logics of politics and bureaucracy (Olsen et al., 2017). The dominance of owner logic over other logics, i.e., company, stakeholder and user, epitomizes a board composition that is characterized by limited experience and competence. This in turn signifies the bounds of the board rationality (Huse, 2008; Van Ees et al., 2009). Our analysis suggests that the bounds of this rationality did not allow the board to engage in complex decision-making, given the directors’ limited knowledge of “the world,” and thus reduced the opportunity for the board to perform their duty of control. As a consequence, the diminishing ability of the board to control the management, informed by the owner logic in this specific context, gave rise to the managerial autonomy in and around the board room that could be seen in our findings.

Autonomy is defined as the opportunity that an agent has to influence matters, along with the extent to which the agent can decide about matters they find important (Bjørnholt et al., 2022). In our case, high levels of managerial autonomy can be partly explained by the corporate form of the MC, which differs from traditional public bureaucracies (Voorn et al., 2017) in being informed by owner logic. Another explanation might lie in the path-dependent behavior informed by prior performance (Huse, 2008), thus suggesting the presence of company logic. As our findings show, the board appeared to be satisfied with high managerial autonomy, where instead of extensive evaluation, the directors’ satisfaction relied on the trustful relations between the CEO and the board and between the CEO and the owners, as well as the past and present perceived performance of the CEO. Thus, our analysis suggests that trust and trustful relationships, in particular, represent one of the monitoring mechanisms (cf. Huse & Zattoni, 2008; Krause & Van Thiel, 2019). This conforms with the stewardship rather than the agency theory perspective, where the opportunistic behavior by the management that needs to be constrained by the board is less in focus (Fama & Jensen, 1983). Yet the focus on the past performance as an important determinant of board behavior vis-à-vis management might serve as an indication of the presence of company logic, i.e., focusing on financial and in-position performance. Thus, informed by this logic, the board allows management more discretionary power. The aspect of managerial power connected to board composition has been captured already in the work of Ferlie et al., who in 1996 studied UK public services.

Close to managerial autonomy lies power, a concept that has been explored by applying the leadership theory perspective to the study of boards of directors (e.g., Nahum & Carmeli, 2020). In a Swedish context, where CEO duality is not an option, the positions of the CEO and the board chair are two essential positions entailing power (McNulty et al., 2011). Power is, however, not limited to the structural parameters of specific positions, but from a micro perspective is about influence and behavior (Pettigrew, 2014). The chair’s narratives signaled a view of being powerful due to his political position (owner logic) and the chair role was formally assigned by the company law (company logic). Yet the way the chair viewed power was more related to his ability to create the intended effects (cf. McNulty et al., 2011) derived from political and legal sources. Observations showed that it was the CEO who possessed power, manifested both in influence, granted to the CEO by the board and based on his past accomplishments, and in behavior, reinforced by the same accomplishments. Yet it appeared that the CEO also sourced his power through shared leadership (cf. Umans et al., 2020) within the presidium, informed by the company logic as it was discussed in the empirical findings, and by doing so appeared to form a supra-top management team that was powerful in composition and represented both the board (chair and vice chair) and the top management (occasional top managers and CEO) (cf. Smith, 2007). This group’s power was manifested not only through its composition but also by means of communication to the board being a “controlling entity” which could be interpreted as a company logic. It especially appears to be informed by the company logic, given that formation of a dominant coalition being in control of the strategic decision-making is usually attributed to the private sector management practice aimed at delivering shareholder value (Finkelstein et al., 1996). The supra-top management team (informed in its behavior by company logic) observed in our case appeared to be more cohesive than the board (informed by the owner logic), and this characteristic allowed it to guide and influence the work of the board (cf. Gabrielsson et al., 2007). Thus, our analysis suggests some deviation from the traditional leadership perspective, where the chair possesses ultimate leadership and power over the board (e.g., Heracleous, 1999), and instead suggests the presence of shared leadership exercised at the discretion of the CEO rather than that of the board’s chair (cf. Umans et al., 2020). This shared leadership arrangement appeared to be primarily informed by company logic, which emerged at the discretion of the board, informed by the owner logic.

Related to this, and from a role perspective (Gabrielsson et al., 2007), the role of the chair includes “planning and leading board directors’ meetings, representing the board in contacts with key stakeholders, acting as the link between the board, the CEO, and the top management team of the company, and securing that the board is on top of ensuring that the company fulfills its legal duties and complies with the relevant corporate governance standards” (Banerjee et al., 2020, p. 373). Our findings, however, suggest that in the case of The Waste Inc., the role of the chair was primarily related to representation of the MC (rather than the board of directors) in contact with key stakeholders at the local government level, thus potentially suggesting an alignment between stakeholder and company logics. Playing more of a figurehead role, the chair appeared to use his formal role for legitimization of the MC for various stakeholders. We could also observe the chair undertaking a mentoring role (cf. Gabrielsson et al., 2007) which manifested through supporting the CEO; however, this mentoring was achieved through acknowledging the CEO’s work rather than through providing constructive feedback, which might be related to the bureaucratic dimension of the owner logic. Moreover, we also observed the chair in a mentoring role vis-à-vis the board of directors, but here this role was limited to guiding the board in its decision-making and its “place” in the organization, yet again suggesting the presence of the owner logic that appeared to permeate the MC in our case. By applying a resource-dependence perspective (Pfeffer & Salancik, 2003), one could expect that the board would be able to provide the management with resources in terms of strategic advice as well as business and political networks, and through this reduce uncertainty via the establishment of linkages to the external environment (Hillman et al., 2009). Our findings suggest that the board of directors we observed could only partly fulfill this expectation, given that the board composition was informed by the owner logic. Provision of strategic advice and of business networks were not identified as board tasks, given that the board lacked directors with either experience or connection to the industry or other relevant business networks. Instead, the composition of the board was a result of following the tradition of only appointing politicians (Svärd, 2016) from the relevant municipality, which is consistent with owner logic in the context of MCs (cf. Olsen et al., 2017). This did, however, allow the owner logic-informed board to provide management with relevant linkages to the local political environment. As a result, the board primarily served as an arena for board member education, and the board meetings served to provide information aimed at legitimizing the MC. The board was thus of limited resource provision value for the organization.

Thus, our findings suggest that board tasks and aspects that these tasks are contingent on are informed by owner logic, and more specifically by the logics of politics and of bureaucracy, which makes the board an arena for education, legitimization of the MC, and key value implementation, but impedes the board’s monitoring and resource provision tasks, which are aspects primarily associated with company logic. We also found that company logic informed board functions in the arenas where the CEO was present (e.g., the presidium), partly due to the lack of leadership exerted by the chair and partly due to the board members’ inexperience in serving on the board of an incorporated entity. The latter led to the emergence of what we have called a user logic, which appeared to collide with the company logic where through misunderstanding of their role vis-à-vis their private interests, the board members did not act in the best interest of the corporation. Our case also shows, however, that how the different logics play out and inform board behavior is subordinated to the owner logic, which in this context epitomizes political and bureaucratic dimensions. One explanation as to why owner logic in our context plays a different role compared to that in private organizations, where it enables the power position of the board, could lie in the vague idea of ownership in this context. Lacking a visible owner, the board appears to perceive political and bureaucratic process as a manifestation of the owner, and in turn this perception and its recognizability in the eyes of the board members cause the owner logic to dominate.

Finally, there was only one instance in which stakeholder logic appeared to inform board behavior, and this was again through the actions of the CEO rather than the chair or the other board members. Swedish MCs are expected to attend to the needs of diverse stakeholders (Maine et al., 2022), and boards of directors, which have the ultimate legal decision-making power, are both in a position and expected to do just that. However, our analysis suggests that paradoxically, it was the CEO, whose actions might not necessarily be expected to be influenced by the stakeholder logic but rather by the company logic, who appeared to be informed by the alignment of the company and stakeholder logics. One reason for this could be the board’s preoccupation with reliance on the owner logic, leaving the CEO with the prerogative of being informed by the company and stakeholder logics.

Our analysis of the way in which different institutional logics provide context to the different contingencies and board tasks in a Swedish MC shows how explanations of the traditional corporate governance theories might need to be complemented by context-specific theoretical explanations. Similarly to the work of Collin et al. (2009), our study suggests that in order to gain an understanding of the complexities of MC governance, benefit might be derived from an eclectic behavioral theoretical perspective combined with nuances provided by the institutional logics perspective, which could allow for emerging corporate governance and a context-specific explanation of actors’ behavior in these organizations.

Conclusion

Based on the combination of an eclectic behavioral theoretical approach with an institutional logics perspective toward board behavior and longitudinal case observations, we have had the opportunity to broaden the understanding of board behavior in the public setting. Whereas private sector board research tends to highlight the tasks of control and service (e.g., Shen et al., 2021), we have identified multiple board tasks in a Swedish MC: control, decision-making, service, conflict resolution, education, legitimizing the MC, and key value implementation. Our findings contribute to the nascent field of research on public boards (Cornforth, 2002; van Thiel, 2015) by providing empirical insight into public board behavior that goes against an idea of one ideal board model (Cornforth, 2002). Moreover, our study reveals four contingencies of board tasks — board composition, board leadership, presidium empowerment, and board processes — thus furthering knowledge on the emergence of specific board tasks in MCs. In so doing, this study answers the needs to explore commonly black-boxed processes of board research (Gabrielsson & Huse, 2004; Heemskerk, 2019; Nelson & Nikolakis, 2012) and empirically illustrates these processes. Finally, relying on institutional logic (Olsen et al., 2017), our study theorizes how and why different board behavior emerges, and highlights the role of the context-specific dimensions that inform board functioning in MCs. We thereby contribute to an emergent stream of research exploring board behavior in MCs (Maine et al., 2022; Skelcher & Smith, 2015) and highlight how institutional logic informs the behavior of important organizational actors.

Apart from theoretical and empirical contributions, our paper presents a number of practical implications. First, our study suggests that composition of the board, heavily informed by the owner logic containing political and bureaucratic dimensions, might impede the board’s ability to fulfill the function of acting as an effective guardian of public and organizational interests. One way forward toward improving this could lie in providing the board with education that not only makes its members aware of the multiplicity of the logics but also enables them to find a balance between these logics. One such example could be the implementation of a board score card (Kaplan & Nagel, 2021), which could allow the board to jointly identify objectives and targets that could be in alignment with different logic-related domains, i.e., financial, stakeholder etc. Secondly, our study might suggest that in order to diminish the dominance of the owner logic, one could consider the introduction of independent board members who might become catalysts for a change in board behavior that has so far been dominated by the owner logic. While it might be provocative to put business representatives on the board of MCs, one possibility could be to bring in academics/university staff from disciplines of relevance to the corporation’s sector. By doing so, the municipal board could gain the legitimacy of having external representatives who could bring to the board the expertise and perspectives that some other board members might lack. Finally, political parties selecting board members of MCs could consider developing transparent nomination procedures which consider the match between the competencies of their nominees and the needs of the corporation and municipality at large. Thus, increasing introducing “independent” directors and increasing competencies of the board might serve as an important re-balancing tool to potential power concentration in the hands of the CEO and the Chair and could influence the formation of more effective boards in MCs.

Limitations and future research directions

Our study has several limitations. Firstly, we relied on data from a single case, and so our findings, while indicative of board behavior in MCs, might not be generalizable to either MCs in Sweden or the industry within which our case was positioned. Secondly, we must consider threats to the validity of our analysis as well as the possibility of misinterpretation of both interviews and observations. One way of addressing threats to validity was by the authors performing interpretation of the data separately and jointly and solving any disagreements in interpretation through discussion and consensus. Thirdly, our study might suffer from the lack of insight into more informal conversations and communications between the board members, between the top management team members, or between the members of these two groups. Insight into this informal arena could have further revealed board behavior but was outside our reach.

The limitations of our studies might also represent some opportunities for future research. For example, performing comparative case studies on board behavior in several MCs, including those in different industries, could be one way forward. Alternatively, future research could quantitatively explore how the different contingencies identified in this study are reflected in the different board tasks. Other qualitative data collection techniques could also be used; for example, shadowing (e.g., Czarniawska, 2014) of board and top management team members to potentially uncover informal interactions between members of two groups that could further contribute to the understanding of board behavior in MCs. Finally, the unique nature of our observational data allowed us to explore not only board behavior as an isolated governing body, but occurrence of board behavior in interaction with other actors, i.e., management team and city council. Thus, future studies, that might have access to similar data, could venture further into the complex net of interrelation board of MCs have with both proximate and distant actors. Such inquiry could potentially yield further insights into board behavior in MC.

Additional information

Funding

This work was supported by the Jan Wallander and Tom Hedelius Foundation and the Tore Browaldh Foundation under Grant number P20-0091.

Notes on contributors

Elin Smith

Elin Smith is an Associate Professor in Corporate Governance at Kristianstad University Sweden. Her research is on corporate governance and public management with specific interest in boards work in public and private sector organizations.

Timur Uman

Timur Uman is a Professor in Accounting and Control at Jönköping International Business School, Sweden and affiliated researcher with Center for Municipality Governance, House of Governance and Public Policy, Stockholm School of Economic, Sweden. His research is on corporate governance and accounting, with specific interest in TMT and corporate boards.

Sven-Olof Yrjö Collin

Sven-Olof Yrjö Collin is a Professor in Corporate Governance at Free University of Scania and an affiliated Professor of Kharkiv University of Humanities, Ukraine. His research is of corporate governance in public and private sector organizations with specific interest in corporate elites and auditors.