Ethical Leadership and Corporate Board Effectiveness: The Role of Team Reflexivity and Environmental Dynamism

Objective: This study examines the factors that favor sound governance by emphasizing the role of chairs and the internal functioning of corporate boards. Specifically, this study construes ethical leadership and team reflexivity as antecedents of board effectiveness, while considering the influence of the organizational environment. Method: Using a multisource approach on a sample of 97 corporate boards (770 directors and their corresponding 97 chairs) in the financial sector, data were gathered through questionnaires completed by the directors and their corresponding chairs. Results: The results support the mediating effect of team reflexivity in the relationship between ethical leadership and board effectiveness, together with the moderating role of environmental dynamism. Conclusions: By emphasizing leadership and board functioning, rather than structural factors (e.g., board size and number of independent directors), this study sheds light on more proximal antecedents of board effectiveness and identifies new courses of action to improve corporate governance.