Agency theory emphasizes the importance of an independent board chair in balancing CEO power and controlling management’s self‐interest (Krause, Semadeni and Cannella, 2014; Krause, Semadeni and Withers, 2016; Withers and Fitza, 2017). Such has been known to be the key reason for separating the roles of the CEO and the board chair (Finkelstein and D’Aveni, 1994; Lorsch and MacIver, 1989). The working relationship between the CEO and the board chair is, therefore, important and could determine the success or failure of the firm.
However, despite the fact that the leadership roles of the CEO and the board chair form one of the most important dyadic relationships in large firms, anchored on goal interdependence, we know very little about it especially on how this relationship develops and indeed on its consequences. For example, under what circumstances is this relationship likely to be stronger or weaker? What is the impact of this relationship on firm performance? Drawing on social interdependence theory, this lecture explores these questions, contributing to the theory and literature of corporate governance, in general and board dynamics, in particular.