The corporate governance landscape has changed significantly in recent decades and continues to transform. Time-series data on key governance mechanisms in US listed companies clearly illustrates the evolution. The average percentage of independent directors is now close to 80%, up from just over 50% before the Sarbanes-Oxley Act (2002). This upward trend is accompanied by a dramatic decrease in the number of listed firms and in the frequency of hostile takeovers. We have also witnessed a spectacular increase in passive investment and the emergence of large asset managers with the potential to influence corporate decision-making (they own a significant percentage of firms’ shares).
And, of course, we should not ignore the exponential increase in the volume of ESG (environmental, social, and governance) investment, which already amounts to trillions of dollars in assets under management. Surprisingly or not, the surge in investment labeled “sustainable” has taken place alongside a rise in shareholder activism demanding firms to improve their ESG performance in several ways. Such activism is commonly articulated through shareholder proposals at annual meetings, but we also observe more direct engagement in conference calls, private meetings and even proxy contests. 
While many other factors could be at play, these trends probably reflect an evolution in the relative dominance of different corporate governance paradigms. Since the 1980s, there has been a growing emphasis on shareholder rights. This stemmed from a perception that the previous governance system gave too much power to managers, a concern that was fueled by the accounting scandals of the early 2000s and the 2007-2008 financial crisis. Currently, we hear many voices calling for what has been called “stakeholder capitalism”, which asserts that the purpose of corporations should go beyond maximization of shareholder wealth. The hope is that this alternative approach will help meet our societal challenges, including decarbonization, social inequality, health emergencies and geopolitical risks.
The ongoing debate on corporate governance is mainly focused on what we could call “externally observable mechanisms”, most notably the structural attributes of the board and its composition, anti-takeover defenses and other provisions defining shareholder rights, and top executive compensation contracts. Such a focus presents at least two problems. The first is that evidence on the economic consequences of these mechanisms is not always conclusive. For example, academic research shows that the effect of board independence on firm performance is nuanced and context-specific. The second problem is that, unfortunately, there is mounting evidence that these mechanisms by themselves are not enough to preempt misbehavior. 
But perhaps even more importantly, the limitations of these “externally observable mechanisms” become more apparent when taking the view that corporate governance is not only about monitoring managerial behavior but also about long-term value creation. In this regard, several observers have recently emphasized that the board should be involved in developing and implementing corporate strategy. 
All these developments suggest that researchers should probably devote more attention to the inner workings of organizations, particularly topics related to the interplay between culture, board dynamics and firm performance. But there’s one problem: researchers have very little publicly available data on these alternative dimensions of corporate governance.
One way to overcome this difficulty is to resort to surveys. A prime example is the study  presented by Paul Healy (Harvard Business School) in the recent 2022 IESE ECGI Corporate Governance Conference(1), which was centered on corporate culture and its impact on governance. Based on a sample of more than 500 directors, Healy and his co-authors drew two important conclusions. First, internal board operations (quality of information, board organization, meeting agenda, etc.) appear to be related to board effectiveness. The second finding is a statistical association between board effectiveness and key firm outcomes, including financial performance, reporting quality, compensation practices and M&A activity. According to the authors, the study “provides a first step toward quantifying and analyzing (board) attributes on a broad scale.” The results highlight the importance of the cultural and organizational aspects of board leadership. 
Studies like Healy’s are of high practical value, as they highlight relevant determinants of effective governance and provide recommendations based on rigorous research, not just opinions. Thus, this research opens an avenue of fruitful collaboration between firms and business schools and leads to a more holistic view of corporate governance, one that should be considered by boards, investors and regulators.

(1) The papers and presentations of the 2022 IESE ECGI Corporate Governance Conference can be found here.