Distinguishing between theboard and management in

company missionImplications for corporate governance

Chris Bart and Nick BontisMichael G DeGroote School of Business McMaster University

Hamilton Ontario Canada

Keywords Mission statements Corporate governance

Abstract A relationship between boardmanagement ordfinvolvementordm and ordfawarenessordm withorganizational mission and their link to ordfemployee commitmentordm and ordforganizationalperformanceordm was modeled by drawing on previous research The model was tested with datafrom 339 large Canadian and US organizations It was determined that ordfmission awarenessordm onthe part of both the board and senior management is an important consideration in thedetermination of employeesrsquo commitment to the mission However the impact of board andmanagement involvement with the mission is not identical The results emphasize the strong andimportant role that the board performs when it is actively engaged in the development of theorganizationrsquos mission

IntroductionWhat is the proper role of the Board of Directors in terms of setting anorganizationrsquos mission Should boards restrict their activities to simply beingaware of their organizationrsquos mission (with or without formal regnal approval) orshould they be more actively engaged in terms of determining evaluatinginmacruencing and eventually approving the mission Furthermore what is theorganizational outcome on intellectual capital development and performancewhen this takes place While for many it may seem that these questions shouldhave been addressed long ago it is surprising that even today after the recentscandals of Worldcom Enron and Tyco there is no clear deregnitive answer Animportant factor contributing to this situation is the fact that there have beenno empirical research studies investigating the potential impact orconsequences that varying levels of board involvement with anorganizationrsquos mission statement may have Consequently this study tacklesthis problem head-on by assessing the performance implications of both boardawareness of and involvement with organizational mission

Mission statementsOf all the management tools employed in the world at present the one that hasbeen cited as the most frequently used plusmn and most popular plusmn is theorganizational mission statement (Bart 1997a) In its most basic form a

The Emerald Research Register for this journal is available at The current issue and full text archive of this journal is available at

httpwwwemeraldinsightcomresearchregister httpwwwemeraldinsightcom1469-1930htm

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Journal of Intellectual CapitalVol 4 No 3 2003

pp 361-381

q MCB UP Limited1469-1930

DOI 10110814691930310487815

mission statement is designed to answer the most fundamental questions forevery organization Why do we exist What are we here for What is ourpurpose As such mission statements form the corner-stone and thestarting-point for any major strategic planning initiative (Bart et al 2001)They are the launching-pad for setting organizational objectives They driveorganizational priorities and intellectual capital development (Bontis 19961999 2001 2002 2003a) They set the tone for the organizationrsquos climate andculture (Van der Weyer 1994) Since the 1980s the mission statements havebeen used more and more to deregne and communicate the kinds of relationshipswhich an organization wishes to establish with each of its major stakeholdergroups (eg investors customers and employees) (Campbell 1997) Severalexamples of recent mission statements from major organizations are shown inFigure 1

Interestingly recent research has proven that not all mission statements arecreated equal ie it is possible to have ordfbadordm as well as ordfgoodordm missionstatements and it is important to consider many variables in formulating agood one (Baetz and Bart 1996 Bart and Baetz 1998) Considering the impact

Figure 1Sample missionstatements

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that a mission can have on its organization it is an understatement to say thatit is important to create a proper statement (Bart 1998a b Bart and Tabone1999) Generally speaking though an effective mission statement is one thatarticulates the speciregc ways in which an organization intends to secure loyalcustomers for its products and services and attract dedicated workers who arepassionate about and committed to serving the kinds of customers theorganization is interested in obtaining As such mission statements are writtenregrst and foremost for an organizationrsquos workforce They are designed tocommunicate the direction in which the organization is headed and to acquirethe group cohesiveness plusmn or shared values plusmn which can make the organizationa truly formidable competitor Thus mission statements can matter plusmn reallymatter And a multitude of articles have been written in recent yearsproclaiming their numerous beneregts (Bart 1997a b c 1998a b 1999a b 20002001a b 2002 2003a b Bart and Baetz 1998 Bart et al 2001)

Corporate governance and missionThe high-level strategic nature of mission statements and their responsibilityfor setting the overall direction of an organization however have importantimplications for the regeld of corporate governance More speciregcally corporategovernance is the system by which business corporations are directed andcontrolled (OECD 1999) An organizationrsquos system of corporate governance isoperationalized through the development of a structure that specireges thedistribution of rights and responsibilities among different participants (orordfstakeholdersordm) in the corporation and spells out the rules and procedures formaking decisions on corporate affairs Consequently a critical corporategovernance question is who should take responsibility for the developmentevaluation and approval of an organizationrsquos mission

For company directors and their boards there is no easy answer because onthe one hand the job of a board is to give direction to senior managementDirectors as representatives of the shareholders are stewards of theorganization plusmn which according to the Merriam Webster Dictionary isderegned as a regscal agent one who actively directs affairs On the other handthere is a near universal agreement that it is important for directors not tomicro-manage the corporation by taking on the roles and responsibilities ofmanagement So what is a director to do

For many writers on corporate governance one solution to this conundrumis to simply say that each situation is unique and therefore all that needs to bedone in the interests of good governance is to be transparent about the roles Inother words write it down But boards and directors are also looking forguidance They want to know what is the right thing to do They want toknow where the lines and distinctions in the roles between the board and seniormanagement need to be drawn So what are the best practices in this regard

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Unfortunately again an easy answer to this question is not readilyforthcoming Based on a review of the extant literature there is no uniformityin terms of the positions taken Consequently directors could become easilyfrustrated in searching for guidance on how to structure their jobs when itcomes to strategy in general and mission in particular Take the Institute ofCorporate Directors of Canada (ICD) for instance It has stated on one occasionthat the task facing the board includes the need to determine strategicobjectives as prepared and recommended by management (ICD 1988) Withthis statement the ICD appeared to confer on corporate boards a fairly activerole in the actual formulation of mission goals Yet four years later the ICDwas seen to claw back the boardrsquos authority for strategy by arguing that aboard need only take responsibility for approving strategic objectives (ICD1992) No apparent rationale for this change in position was offered

A series of studies by the Canadian Institute of Chartered Accountants(CICA) appears to take a much more uniform position with respect to directorinvolvement in company strategy One of its early monographs focusing on thegovernance processes associated with effective control stated that approvaland monitoring of the organizationrsquos mission vision and strategy are one of theboardrsquos most important responsibilities and that the board should review andapprove the mission vision and strategy on a periodic basis and when majorshifts occur (CICA 1995a) A subsequent monograph outlining the CICArsquosview regarding the criteria that should be used to establish effective controlreiterated the earlier position It stated that an explicit mission and clear visionare key elements of control and should be approved by the board of directors(CICA 1995b) A third document providing guidance for directors with respectto risk however seems to soften the directorsrsquo role in strategy considerablywhen it urges directors to simply have a clear sense of corporate purpose and tobe committed to achieving it (CICA 1999)

It is notable that none of the positions taken by the CICA in the documentscited earlier argues for the boardrsquos active participation in the formulation of anorganizationrsquos strategy or its revision In fact the overall impression created isof a board which just receives and reviews managementrsquos stated mission forthe enterprise poses a few questions and perhaps challenges someassumptions but in the end raises its hands and simply ordfapproves the damnthingordm The boardrsquos role in strategy is therefore one of interested bystandersand passive approval rather than active engagement

How then in such circumstances does effective control by the board occurThe answer appears to lie largely in their monitoring of the companyrsquosperformance plusmn relative to the approved mission and strategic plan plusmn wherebyfailure to achieve the stated goals provides the basis upon which conregdence inthe CEO is altered But so long as the CEO delivers on hisher promises thenno action need be taken Mission accomplished However such an approach tocontrol would seem to support only low-stretch objectives and assumes that

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directors plusmn lacking sufregcient time information and expertise plusmn have littlechoice but to approve strategic plans

A somewhat different perspective occurs when the report of the NACD BlueRibbon Commission concerning the role of the board in corporate strategy isexamined (NACD 2001) The report identireges a clear need for corporate boardsto be actively involved in the development and approval of an organizationrsquosstrategy and exhorts boards and management to view board participation incorporate strategy as a cooperative and not as an adversarial process Thereport also reinforces the importance of a boardrsquos long-standing and historicalstrength with respect to strategy (ie probing questioning and constructivelychallenging and criticizing organizational strategy)

The report unfortunately though is confusing and contradictory in terms ofits regnal stance regarding the degree of board involvement in strategy As aresult it is unclear whether boards should help develop their organizationrsquosmission or not (ie the NACD (2001) report in one section on page 4 says thatthey should not develop strategy and then in another section on page 8 arguesthat the board should assess discuss amend and urge corrections withmanagement) While the report emphasizes the need for boards to beconstructively involved in strategy there is little elaboration concerning whatthe authors of the report exactly meant by this term

A variation of this was also seen to occur recently when a Canadian taskforce on corporate governance recommended that the Toronto Stock Exchange(TSX) amend its guidelines to make clear that the boardrsquos responsibility goesbeyond the adoption of a strategic planning process (Joint Committee onCorporate Governance 2001) The report recommended that the board shouldbe responsible for contributing to the development of strategic direction andapproving a strategic plan that takes into account an identiregcation of businessopportunities and business risks (TSX 2002) In doing so the task forceauthors appear to side clearly with those who argue that the board has aderegnitive role in shaping an organizationrsquos mission However the regulatorsseem to have heard only half the message In April 2002 the TSX announcedthat the role of the board in adopting a strategic planning process would beexpanded to include only the approval of a strategic plan plusmn thereby once againrestricting the boardrsquos involvement in strategy making and direction setting toapproval but not development (TSX 2002) A quick review of variousinternational corporate governance codes only adds further confusion to thisstate of affairs beyond what is evident in Canada

Thus when it comes to the development of an organizationrsquos missionstatement there is presently no deregnitive answer plusmn and no widespreadacceptance plusmn regarding the division of responsibilities between the board andthe senior management We contend though that a major factor contributingto this situation is that all of the reports (including those not reviewed here) arenot based on any solid research Instead the regndingsrecommendations

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contained in the various documents are in reality just a compilation ofopinions While those opinions may come from experienced corporate directorsand recognized thought leaders they are still just opinions and not factsReferences to empirical studies of board best practices (ie strategyformulation evaluation and monitoring) are virtually non-existent It is alsonot apparent that the various reports cited had commissioned any speciregcresearch studies to investigate verify and support their resultantrecommendations Accordingly this study endeavours to correct thissituation by focusing on a set of very speciregc research questions

Interestingly a recent presentation of some preliminary regndings by one ofthis paperrsquos co-authors suggested that a speciregc and deregnitive answer to thequestion of board involvement with mission exists (Bart 2003b) Howeverbecause those regndings were deemed provisional we decided to strengthen theoriginal analysis with more high-powered analytical techniques in order to givethe initial conclusions more weight Along the way signiregcant new insightswere gained

Research questionsNumerous questions regarding boards and their mission statements remainunanswered For instance to what extent are boards even aware of theirorganizationrsquos mission statement This question is important because ifresponsibility for mission belongs exclusively to senior management plusmn or ifdirectors do not see such responsibility as falling within their speciregc role set then one might expect to regnd little or no awareness of it on the part of the boardand hence little interest on their part in its development or content

Nevertheless even if the boards are aware of their organizationrsquos missionthey still may or may not feel that their participation in its development iswarranted Of course an important consideration in determining the board bestpractices vis-aAacute -vis mission statements concerns whether or not board awarenessandor involvement with the mission has any impact on the organization As theearlier discussion demonstrated there is very little guidance as to what is thecorrect posture that directors should adopt on these matters

In order to help boards better understand their roles in relation to theirorganizationrsquos mission statement a research project was designed whichsought to explore the relationship between the selected characteristics of boardand senior management awarenessinvolvement with their missions andselected performance-related outcome measures The speciregc questionsaddressed by this research were as follows

(1) To what extent are boards aware of their organizationrsquos mission

(2) To what extent are boards involved in the creation of their organizationrsquosmission

(3) How does board awarenessinvolvement compare with that of seniormanagement

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366

(4) Does the level of awarenessinvolvement with respect to the missionmatter in terms of enhancing the organizationrsquos intellectual capital andperformance

(5) What contributes most to the awareness of the mission

Method and measuresSample selection and sizeSurveys were delivered to the top manager (ie CEO President ExecutiveDirector Board Chairman) of 1000 North American organizations randomlyselected from the Fortune 1000 (USA) and Financial Post 500 (Canada) Asinformants senior management is most able to recognize the relativeimportance of organizational issues whether they are performance or strategyrelated (Glick et al 1990) The top manager was asked to complete the surveyor to delegate the task to someone knowledgeable with the organizationrsquosmission statement and its development A total of 339 completedquestionnaires were returned representing a response rate of 339 percentThe method of sample selection however restricts the claims which can bemade about the representativeness of the regndings as they do not appear toapply to organizations of all sizes cultures and sectors The regndings andconclusions in this study appear to have validity only in so far as larger-scaleEnglish-speaking North American organizations are concerned and this factshould be noted when considering the studyrsquos general applicability Descriptivestatistics of the respondent sample closely mirror that of the population fromwhich the sample was derived

Respondent title and response bias Of the responses received 372 percentwere from a top manager (ie CEO or Board Chairman) while the remainderwere senior level executives or managers (ie Senior Executives 266 percentSenior Managers 363 percent) A one-way ANOVA for each of the respondenttypes was examined against three important dependent variables (Figure 2)

(1) What is your overall satisfaction with the organizationrsquos regnancialperformance (Scale from 0 = very dissatisreged to 9 = very satisreged)

(2) Are individuals in the organization committed to the mission statement(Scale from 0 = not at all to 9 = to the greatest possible extent)

(3) How innovative is your organization (Scale from 0 = not all innovativeto 9 = extremely innovative)

Results of the one-way ANOVA show that there is no statistically signiregcantdifference in dependent variable outcomes based on respondent-type therebyyielding no evidence of response-bias in this study (F-stat = 533 743 1013p 0001)

Operationalizing mission awareness and involvement Respondents wereasked to rate separately the extent to which the board and senior managementwere aware of their organizationrsquos mission statement using a four-point scale(1 = not aware at all 2 = somewhat aware 3 = moderately aware 4 = highly

Implications forcorporate

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367

aware) Managers were then asked (again using a four-point scale) to indicatethe degree to which they were involved in developing their organizationrsquosmission statement (1 = no involvement at all 2 = somewhat involved3 = moderately involved 4 = highly involved)

Figure 3 shows that the awareness of mission statements and theinvolvement in developing them differed between senior management andboard members On average board members scored lower than theirmanagement counterparts in both awareness (348 vs 366) and involvement

Figure 2ANOVA test forresponse bias

Figure 3Awareness andinvolvement by boardand senior management

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(298 vs 374) However in absolute terms awareness and involvement with themission by board members and senior managers appears to be fairly high

Mission communication technique usage There were a variety of missioncommunication techniques that were measured in this study (see Figure 4) Onaverage the use of annual reports and employee manuals was the mostprominent communication method in use at 676 and 635 percent respectivelyAlternatively only 273 percent of respondents used advertisements tocommunicate their mission statements

Outcome measuresThree outcome measures were used in order to assess the effect of board andsenior management awareness and involvement with the mission

(1) the extent to which members throughout the organization areemotionally committed to the mission statement (Bart 1998a Bart andTabone 1999 Bart et al 2001)

(2) the extent to which respondents were satisreged with the regnancialperformance of their organization (Bart 1997b 1998a Bart and Baetz1998 Bart and Tabone 1999) and

(3) the extent of perceived innovativeness of the organization

Respondents were asked to rate each of these outcome measures on a ten-pointscale (ie 0 = not at all 9 = to the greatest possible extent)

Bontis and his colleagues (Bontis and Fitz-enz 2002 Bontis and Girardi2000 Bontis and Nikitopoulos 2001 Bontis et al 1999 2000 Choo and Bontis2002 OrsquoRegan et al 2001 Stovel and Bontis 2002) have shown that

Figure 4Techniques to

communicate missionstatement

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369

organizational commitment is a critical antecedent to intellectual capitaldevelopment and performance outcomes Furthermore Bontis (1998) andBontis et al (2002) have shown in intellectual capital studies that perceivedmeasures of performance can be a reasonable substitute for objective measuresof performance (Dess and Robinson 1984) and have a signiregcant correlationwith objective measures of regnancial performance (Lyles and Salk 1997Venkatraman and Ramnujam 1987) Accordingly the interpretation of theresults from this study is that respondents were on average ordfmoderatelysatisregedordm with membersrsquo commitment to the mission statement (mean = 594)regnancial performance (mean = 586) and organizational innovativeness(mean = 587)

It is also important to note that a control variable was used to limitunnecessary variability of the endogenous constructs For this study eachorganization was asked to provide the year in which the organization regrstdeveloped a recorded mission statement That year was converted to the age(ie age = 2002 2 year) of the mission statement process since inception Theaverage year of inception of the mission process for the regrms in this study was1989 (or 13 years) This was required so that variability in performance couldnot be attributable solely to mission experience

Partial least squares modelHulland (1999) has noted that the use of partial least squares (PLS) as astructural equation modeling technique has received increased interest in thestrategic management literature in areas such as intellectual capitalmanagement (Bontis 1998 2003b Bontis et al 2000 2002) and missionstatements (Bart et al 2001) According to Hulland (1999 pp 202-3) this isbecause ordfcausal models such as PLS can help strategic managementresearchers to achieve new insights As the regeld of strategic managementcontinues to mature researchers need to increasingly rise to the challengeordmPLS also allows researchers to develop a systematic and holistic view whenestablishing measures to solve research problems For large-sample modelingLISREL (Bollen 1990 Joreskog and Sorbom 1984) has several relativestrengths whereas for small-sample predictive research PLS (Fornell andBookstein 1982 Hulland 1999) is more appropriate

In general the most complex models will involve

(1) the number of indicators on the most complex formative construct or

(2) the largest number of antecedent constructs leading to an endogenousconstruct

Sample size requirements become at least ten times the number of predictorsfrom (1) or (2) whichever is greater (Barclay et al 1995) In this case there are atotal of nine formative indicators on the most complex construct which iscommunication technique (ie advertisement annual reports etc) and a total

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of six antecedent constructs leading to the endogenous construct Thereforethe minimum sample requirements become 9 3 10 or 90 PLS is an adequatetechnique for this study since the sample size is 339 respondents All of theitems germane to this study were therefore assigned to their respective scalesusing PLS as suggested by Barclay et al (1995) and Hulland (1999)

Reliability and validityThe survey items and constructs were subjected to various psychometricevaluations to conregrm reliability and validity A Cronbach alpharsquos (a) measurewas used to test the reliability of the communication technique construct whichcontained nine items The alpha (a) value of 0839 is above the minimumthreshold of 07 as supported by Nunnally (1978) Shimp and Sharma (1987)suggest that items have loading values greater than 07 to ensure constructvalidity This procedure is also supported by Carmines and Zeller (1979) andHulland (1999) In this case only three of the nine items had loading valuesgreater than 07 and were therefore removed prior to the subsequent modellingexercise

Interestingly the three remaining communication techniques that were bothreliable and valid were not necessarily those most often used by therespondents Company information kits (l = 0732) newsletters (l = 0732)and internal documents (l = 0702) were used only by 596 531 and 574percent of respondents Conversely the most often used communicationtechnique of annual reports was used by two-thirds (676 percent) of therespondents Yet its construct validity (l = 0598) was below the thresholddenoting a suspiciously absent nomological connection to the board andmanagement awareness of mission statements (see Figure 5)

Similarly a latent performance construct was created using two of theoutcome measures identireged earlier plusmn both of which were found to be bothvalid and reliable The regrst item was overall satisfaction with the regnancial

Figure 5Construct validity and

reliability ofcommunication

technique

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371

performance of the organization (l = 0837) and the second item was howinnovative the organization was (l = 0874)

Research limitationsWith respect to the present results a number of caveats pertaining to commonmethod single-respondent and social desirability biases should beacknowledged To address the possibility of common method bias aHermanrsquos one-factor test on the questionnaire measurement items wasconducted (Konrad and Linnehan 1995 Scott and Bruce 1994) A principalcomponents factor analysis yielded four factors with eigenvalues greater than10 that accounted for 51 percent of the variance Since several factors asopposed to one single factor were identireged and since the regrst factor did notaccount for the majority of the variance (only 29 percent) a substantial amountof common method variance does not appear to be present (Podsakoff andOrgan 1986) Nevertheless the presence of common method problems cannotbe fully discarded

An important methodological imperative for this study was for eachrespondent to be highly familiar with the mission statement and its resultantorganizational effect In this respect the study was considered satisfactorysince the majority of respondents were top executives in their respectiveorganizations Given the singularity and specialized knowledge associatedwith these informants a single-informant approach was deemed best and wastherefore used We believed that less knowledgeable informants would result inless accurate data

Whereas survey data are sometimes subject to social desirability bias(Arnold and Feldman 1981 Podsakoff and Organ 1986) we do not perceivesuch bias to be a major concern for this study The topic of investigationalthough strategic was not thought to be so highly sensitive as to be likely toprevent responses that would present the respondent or organization in anunfavourable light In addition much of the information obtained was notdeemed highly conregdential However the occurrence of such bias cannot betotally ruled out

ResultsFigure 6 shows the regnal specireged PLS structural equation model Each pathand beta coefregcient displayed are both substantive and signiregcant Theexplanatory power of the model is relatively high for survey research at 334percent and denotes a strong conregdence in the explanation of performancevariance attributable to mission communication involvement awareness andcommitment (see Figure 6)

Missions communication technique and awareness (b1 and b2)The beta path (b1) coefregcient from communication technique to boardawareness is 0362 while the beta path (b2) from communication technique to

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management awareness is 0294 These results support the notion that theselected mission communication techniques aid in raising awareness of themission statement for both the board members and senior managementFurthermore the magnitude of this impact is relatively higher for boards Thecommunication technique construct however was not found to have any directimpact on the measure for member commitment to the mission

Involvement and awareness (b3 b4 and b5)The beta path (b3) coefregcient from board involvement to board awareness is0441 while the beta path (b4) from board involvement to managementawareness is 0128 These results support the notion that involvement with themission development process by the board is important in raising the boardrsquosawareness of the mission statement Similarly when the board is involved indeveloping their organizationrsquos mission it positively impacts managementrsquoscontinuing and current awareness of the mission plusmn though this latterrelationship is signiregcantly weaker

In contrast the beta path (b5) coefregcient from management involvement tomanagement awareness was found to be just 0158 while the beta path frommanagement involvement to board awareness was neither substantive norsigniregcant Therefore while managementrsquos involvement in the missiondevelopment process appears to encourage their continuing awareness of themission it does not appear to have any effect on the boardrsquos current awareness

Figure 6PLS structural

equation model

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373

Antecedents to commitment (b6 b7 and b8)The beta path (b6) coefregcient from management involvement in missiondevelopment to membersrsquo commitment to the mission was established to be0139 while a beta path from either board involvement to commitment ormanagement involvement to board awareness did not exist What this suggestsis that while the commitment of an organizationrsquos members to the missionstatement can be directly supported by the managementrsquos involvement in themission development process the boardrsquos involvement acts as an antecedent tocommitment only indirectly and only through the process of raising its ownawareness (b3 and b4) Following that there are substantive and signiregcantpaths from both board awareness (b7 = 0150) and management awareness(b8 = 0173) to membersrsquo commitment to the mission

Commitment to performance (b9)The beta path (b9) coefregcient from individualsrsquo commitment to the missionstatement and performance was 0583 This is not at all surprising since itreplicates the regndings of a previous study by Bart et al (2001) But the regndingscontinue to underscore the tremendous impact and important role that membercommitment to the mission continues to have and to play respectively in termsof enhancing an organizationrsquos performance

DiscussionThere are a number of important and signiregcant regndings which havematerialized from the current study

Boardsrsquo awareness of their organizationrsquos missionThe regndings from Figure 3 suggest that directors and their boards appear to berelatively aware of their organizationrsquos mission plusmn though it was somewhatlower than managementrsquos Only a small percentage of respondents indicatedthat their board was ordfsomewhat awareordm of the mission and very few stated thatthere was no awareness at all Nevertheless for the most part there were still alarge number of directors who were not highly or fully aware of theirorganizationrsquos mission Therefore the question remains should they be In thisregard path analysis results are unequivocal Continuing board awareness ofthe mission plusmn whereby directors ordfknow understand and remember themissionordm plusmn is an important and signiregcant contributor to having individualsthroughout the organization commit to it The more aware the boards are oftheir organizationrsquos mission the greater their organizational membersrsquocommitment to it will be Moreover directorsrsquo awareness of the mission isequivalent in impact (with respect to membersrsquo commitment) in terms of bothmanagementrsquos awareness of the mission and managementrsquos involvement withthe missionrsquos development Consequently boards cannot afford to becomplacent when it comes to their organizationsrsquo mission and theircontinuing and current awareness of it

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This is a thought-provoking observation It suggests that the days of boardsbeing entertained every now and then with PowerPoint presentations of thecompany mission while the lobster sandwiches are passed around are overBoards must accept that the mission statement is a valuable and important toolin helping to set the strategic direction and positioning of the organization Itshould be the corner-stone of every organizationrsquos strategic plan Given thisimportance it cannot be given short shrift once it has been developed andintroduced to the organization Because every mission also needs thecontinuing commitment and support of all the organizational members if it is tobe ultimately achieved directors have an ongoing responsibility to keepthemselves aware of it as well

One obvious way in which they can help do this is to make sure that themission statement is a part of each board meeting and a part of every boarddiscussion Directors must refer to their organizationsrsquo mission regularly (notjust in a crisis) and use it to test managementrsquos ability to become and remainfocused Having the mission as part of every ordfboard packageordm would certainlyassist in this regard So would memorizing it in certain circumstancesDirectors also need to be assured that the mission is being achieved and thatthere is accountability for its implementation This in turn suggests that theremust be some sort of mechanism in place to measure the organizationrsquosprogress against the mission When actions such as these are taken directorswill help keep their organizationsrsquo mission alive not just for themselves but forthe rest of the gang as well (Please note though that additional comments onenhancing board awareness are being reserved for the following two sections)

Boardsrsquo involvement in the creation of their organizationrsquos missionThis paper began with the question of whether or not boards should beinvolved in the development of their organizationrsquos mission Unlike theprevious discussion on board awareness the regndings of Figure 3 show thatinvolvement by the board of directors in their organizationrsquos mission creationprocess is generally not a well accepted activity and generated the highestpercentage of responses in the category for ordfnot at allordm Whereas 80 percent ofthe respondents perceived their senior managements to be highly involved indeveloping their organizationsrsquo mission only 47 percent believed this to be thecase for the board Moreover informal conversations with established andsenior directors have suggested that board tradition typically dictates that therole of the board vis-aAacute -vis mission is for ordfmanagement to propose and for theboard to disposeordm The current regndings however would challenge thisviewpoint

Recall that the discussion in the previous section established the pivotal rolethat board awareness of the mission plays in terms of enhancing organizationalcommitment to the mission The results from path analysis in Figure 6however have demonstrated the critical importance of the boardrsquos involvement

Implications forcorporate

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375

in developing the mission if full board awareness of the mission is to beachieved Indeed of all the antecedent measures in the study it was boardinvolvement which obtained the strongest beta (b) score and was the No 1driver of board awareness Moreover the regndings of path analysis show thatwhile managementrsquos continuing awareness of the mission is also an importantconsideration in terms of securing organizational commitment to it thatawareness is produced almost equivalently from both their own plusmn and theboardrsquos plusmn involvement in mission development In other words it takes boththe boardrsquos and senior managementrsquos involvement to generate plusmn within theexecutive ranks plusmn the necessary and continuing knowledge and understanding(ie awareness) required to affect membersrsquo commitment to the missionInterestingly while management involvement by itself was also found to havea direct inmacruence on organizational commitment to the mission boardinvolvement did not Instead the boardrsquos impact on organizational commitmentto the mission is ordffeltordm through their ongoing awareness of it

Now this is a provocative notion since in the eyes of many individualsmanagement typically represents and provides to a greater extent than theboard the pragmatic ongoing and de facto strategic leadership of theorganization Yet the results from the current study would argue that directorsrsquoinvolvement in a missionrsquos development is a constructive activity on the part ofthe board and an important contributor to organizational success Shouldboards be involved in creating their organizationrsquos mission The answer wouldappear to be a deregnitive ordfyesordm

Directors must now see their role in terms of getting involved in thedevelopment of their organizationrsquos mission in order to raise awareness of it forthemselves and for management and raising awareness of the mission forthemselves in order to create and inmacruence higher levels of commitment to itthroughout the organization Consequently the regndings should be seen ashelping to put to rest the current debate concerning the nature and degree ofboard involvement in mission development Boards must get involved and it iswrong for them not to do so The research regndings thus represent for the regrsttime a true ordfbest practiceordm in corporate governance research The currentcorporate governance literature needs to be revised to take these results intoaccount

Mission communication and awarenessWhen the various techniques to communicate the mission were analyzed anumber of interesting observation were made To begin with when the relativeranking of the various communication methods (as shown in Figure 4) wasreviewed it appeared that there was no one technique which appeared to be theoverwhelming favourite The annual report appeared to be the most popular plusmnand perhaps the most obvious plusmn place for ensuring the widest possibledissemination of the mission among the various stakeholder populations After

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all anyone with a serious interest or ordfstakeordm in the organization would be sureto see the mission in this document The employee manual and posters werealso seen as logical choices for communicating the mission to employee groupsHowever no one technique achieved a usage rating greater than 67 percent andmost communication methods could be said to be used only to a moderateextent (mean score range 256-294) plusmn with the exception of advertisementswhich was clearly and indisputably the least favourite technique (mean score184)

It therefore came as somewhat of a surprise that when the communicationconstruct was created only three communication methods were found to bereliable and valid (ie company information kits company newsletters andother internal documents (such as company strategic and operating plansbudgets MBO and bonus criteria) Yet when these results were furtherdissected and contemplated they appeared to make considerable sense Foreffective communication to take place a ordfmessageordm must be sent receivedunderstood and remembered (Bart 2002) Accordingly while annual reportsmay be the most frequently used document for communicating anorganizationrsquos mission they are not the most effective This is because theyare often not read not widely read or not completely read As a result themission message while ordfsentordm is not necessarily received understood orremembered Similarly employee manuals may plusmn and probably should plusmncontain explicit reference to their organizationrsquos mission However how manytimes has anyone as employees ever referred to the mission by quoting it fromthe company manual Probably few if any at all

In contrast the communication techniques which appear to have a lastingand profound impact in terms of taking a mission message beyond its ordfsentpointordm are those which are designed to

create special attention (ie an information kit which is dedicated toexplaining the mission and can be used as a reference guide)

create ongoing attention and deal with short attention spans (egcompany newsletters) and

focus resource allocations (eg strategic and operational plans)

Thus when these documents are used most people pay attention Furthermorepath analysis conregrmed that both the board and management seem to belistening Indeed for the board the communication construct was the secondmost powerful inmacruencer in terms of its positive impact on board awareness ofthe mission Only board involvement with the mission was more importantHowever in terms of managementrsquos awareness results revealed that it was thecommunication construct which had the most profound impact plusmn almostdouble that of any other variables

These regndings are signiregcant They show that in terms of creatingcontinuing awareness on the part of boards with respect to their organizationsrsquo

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missions it is necessary to regrst and foremost engage them actively andconstructively in its development Involvement begets awareness To keepthem continually aware various selected communication techniques then needto be deployed But those techniques will be impotent in terms of their effect ifthe board has not regrst made the commitment of time and energy to thedevelopment of the organizationrsquos mission There is no ordfViagraordm cure when thishas not taken place So boards need to understand how the timing andsequence of their awareness are created and sustained Hopefully this researchhelps to establish the proper path to be followed

The observations with respect to management awareness of the mission arealso intriguing As with the case of the board there is no question thatmanagement involvement in developing the mission produces a certain level ofongoing awareness Similarly one would expect that when the board is alsoinvolved it acts as a strong signal to management that the mission is moreimportant than might otherwise be found in organizations where the boardignores it When combined managementrsquos involvement and awareness have atremendous effect on the commitment that organizational members have withrespect to their mission But to sustain managementrsquos interest in the missionand keep their interest in the mission robust the regndings show that it is thecommunication construct plusmn with its three critical communication techniques plusmnwhich has the greatest impact Boards and their managements would do well toensure that these techniques are being regularly deployed if they are seriouslyinterested in making sure that senior executives do not lose sight of the missionor lose enthusiasm for it Relentless repetition of the mission message isprobably still the only way to ensure that the message is remembered plusmn the lastbut essential component of the rules for effective communication (Bart 2002)

ConclusionsIf there is one regnal thought it is this boards need to be more involved indeveloping plusmn and be continuously aware of plusmn their organizationrsquos mission Boardinvolvement matters So too does their awareness For too long there has been alack of clear guidance with respect to the boardrsquos role in mission The extantliterature is contradictory and confusing These results therefore represent asigniregcant and profound milestone for the literature on corporate governanceThe results herein demonstrate and prove ordfbest practiceordm while challengingmany of the assumptions underlying current board practices in this provocativearea Accordingly it is recommended that board involvement with a missionrsquosdevelopment plusmn and continuous awareness of it plusmn need to be both recognizedformally in an organizationrsquos governance structure (eg board charters) andproposed as an amendment to most governance codes currently in force It is alsorecommended that given this new responsibility for mission developmentdirectors need to be sufregciently trained in strategy development so that they canwith management develop a shared view on what the future of the organization

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should be and why it exists However to do so effectively both boards andmanagement need to develop a common language and strategic analysisframework Recent developments at the newly formed Directors College (a jointventure of the DeGroote Business School at McMaster University and theConference Board of Canada (see wwwthedirectorscollegecom)) should helpboards and their managements considerably in this regard

References

Arnold HJ and Feldman DC (1981) ordfSocial desirability response bias in self-report choicesituationsordm Academy of Management Journal Vol 24 pp 377-85

Baetz MC and Bart CK (1996) ordfDeveloping mission statements which workordm Long RangePlanning Vol 29 No 4 pp 524-31

Barclay DW Higgins C and Thompson R (1995) ordfThe partial least squares (PLS) approach tocausal modeling personal computer adaptation and use as illustrationordm TechnologyStudies Vol 2 No 2 pp 285-309

Bart CK (1997a) ordfSex lies and mission statementsordm Business Horizons November-Decemberpp 9-18

Bart CK (1997b) ordfIndustrial regrms and the power of missionordm Industrial MarketingManagement Vol 26 pp 371-83

Bart CK (1997c) ordfMission possibleordm CA Magazine September pp 33-4

Bart CK (1998a) ordfA comparison of mission statements and their rationales in innovative andnon-innovative regrmsordm International Journal of Technology Management Vol 16 No 1-3pp 64-77

Bart CK (1998b) ordfMission mattersordm CA Magazine March pp 31-41

Bart CK (1999a) ordfMaking mission statements countordm CA Magazine March pp 37-47

Bart CK (1999b) ordfAccepting the missionordm CA Magazine August pp 33-4

Bart CK (2000) ordfLasting inspirationordm CA Magazine May pp 49-50

Bart CK (2001a) ordfMeasuring the mission effect in human intellectual capitalordm Journal ofIntellectual Capital Research Vol 2 No 3 pp 320-30

Bart CK (2001b) ordfWhorsquos running the storeordm CA Magazine August pp 22-7

Bart CK (2002) A Tale of Two Employees Corporate Missions Inc Press Hamilton

Bart CK (2003a) ordfInnovation mission statements and learningordm International Journal ofInnovation and Learning forthcoming

Bart CK (2003b) ordfGood governance and intellectual capitalordm paper presented at the 24thMcMaster World Congress on the Management of Intellectual Capital and ElectronicCommerce Hamilton

Bart CK and Baetz MJ (1998) ordfThe relationship between mission statements and regrmperformance an exploratory studyordm Journal of Management Studies Vol 36 No 6pp 823-53

Bart CK and Tabone JC (1999) ordfMission statement content and hospital performance in theCanadian not-for-proregt health-care sectorordm Health Care Management Review Vol 24 No 3pp 18-29

Bart CK Bontis N and Taggar S (2001) ordfA model of mission statements and regrmperformanceordm Management Decision Vol 39 No 1 pp 19-35

Implications forcorporate

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379

that a mission can have on its organization it is an understatement to say thatit is important to create a proper statement (Bart 1998a b Bart and Tabone1999) Generally speaking though an effective mission statement is one thatarticulates the speciregc ways in which an organization intends to secure loyalcustomers for its products and services and attract dedicated workers who arepassionate about and committed to serving the kinds of customers theorganization is interested in obtaining As such mission statements are writtenregrst and foremost for an organizationrsquos workforce They are designed tocommunicate the direction in which the organization is headed and to acquirethe group cohesiveness plusmn or shared values plusmn which can make the organizationa truly formidable competitor Thus mission statements can matter plusmn reallymatter And a multitude of articles have been written in recent yearsproclaiming their numerous beneregts (Bart 1997a b c 1998a b 1999a b 20002001a b 2002 2003a b Bart and Baetz 1998 Bart et al 2001)

Corporate governance and missionThe high-level strategic nature of mission statements and their responsibilityfor setting the overall direction of an organization however have importantimplications for the regeld of corporate governance More speciregcally corporategovernance is the system by which business corporations are directed andcontrolled (OECD 1999) An organizationrsquos system of corporate governance isoperationalized through the development of a structure that specireges thedistribution of rights and responsibilities among different participants (orordfstakeholdersordm) in the corporation and spells out the rules and procedures formaking decisions on corporate affairs Consequently a critical corporategovernance question is who should take responsibility for the developmentevaluation and approval of an organizationrsquos mission

For company directors and their boards there is no easy answer because onthe one hand the job of a board is to give direction to senior managementDirectors as representatives of the shareholders are stewards of theorganization plusmn which according to the Merriam Webster Dictionary isderegned as a regscal agent one who actively directs affairs On the other handthere is a near universal agreement that it is important for directors not tomicro-manage the corporation by taking on the roles and responsibilities ofmanagement So what is a director to do

For many writers on corporate governance one solution to this conundrumis to simply say that each situation is unique and therefore all that needs to bedone in the interests of good governance is to be transparent about the roles Inother words write it down But boards and directors are also looking forguidance They want to know what is the right thing to do They want toknow where the lines and distinctions in the roles between the board and seniormanagement need to be drawn So what are the best practices in this regard

Implications forcorporate

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363

Unfortunately again an easy answer to this question is not readilyforthcoming Based on a review of the extant literature there is no uniformityin terms of the positions taken Consequently directors could become easilyfrustrated in searching for guidance on how to structure their jobs when itcomes to strategy in general and mission in particular Take the Institute ofCorporate Directors of Canada (ICD) for instance It has stated on one occasionthat the task facing the board includes the need to determine strategicobjectives as prepared and recommended by management (ICD 1988) Withthis statement the ICD appeared to confer on corporate boards a fairly activerole in the actual formulation of mission goals Yet four years later the ICDwas seen to claw back the boardrsquos authority for strategy by arguing that aboard need only take responsibility for approving strategic objectives (ICD1992) No apparent rationale for this change in position was offered

A series of studies by the Canadian Institute of Chartered Accountants(CICA) appears to take a much more uniform position with respect to directorinvolvement in company strategy One of its early monographs focusing on thegovernance processes associated with effective control stated that approvaland monitoring of the organizationrsquos mission vision and strategy are one of theboardrsquos most important responsibilities and that the board should review andapprove the mission vision and strategy on a periodic basis and when majorshifts occur (CICA 1995a) A subsequent monograph outlining the CICArsquosview regarding the criteria that should be used to establish effective controlreiterated the earlier position It stated that an explicit mission and clear visionare key elements of control and should be approved by the board of directors(CICA 1995b) A third document providing guidance for directors with respectto risk however seems to soften the directorsrsquo role in strategy considerablywhen it urges directors to simply have a clear sense of corporate purpose and tobe committed to achieving it (CICA 1999)

It is notable that none of the positions taken by the CICA in the documentscited earlier argues for the boardrsquos active participation in the formulation of anorganizationrsquos strategy or its revision In fact the overall impression created isof a board which just receives and reviews managementrsquos stated mission forthe enterprise poses a few questions and perhaps challenges someassumptions but in the end raises its hands and simply ordfapproves the damnthingordm The boardrsquos role in strategy is therefore one of interested bystandersand passive approval rather than active engagement

How then in such circumstances does effective control by the board occurThe answer appears to lie largely in their monitoring of the companyrsquosperformance plusmn relative to the approved mission and strategic plan plusmn wherebyfailure to achieve the stated goals provides the basis upon which conregdence inthe CEO is altered But so long as the CEO delivers on hisher promises thenno action need be taken Mission accomplished However such an approach tocontrol would seem to support only low-stretch objectives and assumes that

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directors plusmn lacking sufregcient time information and expertise plusmn have littlechoice but to approve strategic plans

A somewhat different perspective occurs when the report of the NACD BlueRibbon Commission concerning the role of the board in corporate strategy isexamined (NACD 2001) The report identireges a clear need for corporate boardsto be actively involved in the development and approval of an organizationrsquosstrategy and exhorts boards and management to view board participation incorporate strategy as a cooperative and not as an adversarial process Thereport also reinforces the importance of a boardrsquos long-standing and historicalstrength with respect to strategy (ie probing questioning and constructivelychallenging and criticizing organizational strategy)

The report unfortunately though is confusing and contradictory in terms ofits regnal stance regarding the degree of board involvement in strategy As aresult it is unclear whether boards should help develop their organizationrsquosmission or not (ie the NACD (2001) report in one section on page 4 says thatthey should not develop strategy and then in another section on page 8 arguesthat the board should assess discuss amend and urge corrections withmanagement) While the report emphasizes the need for boards to beconstructively involved in strategy there is little elaboration concerning whatthe authors of the report exactly meant by this term

A variation of this was also seen to occur recently when a Canadian taskforce on corporate governance recommended that the Toronto Stock Exchange(TSX) amend its guidelines to make clear that the boardrsquos responsibility goesbeyond the adoption of a strategic planning process (Joint Committee onCorporate Governance 2001) The report recommended that the board shouldbe responsible for contributing to the development of strategic direction andapproving a strategic plan that takes into account an identiregcation of businessopportunities and business risks (TSX 2002) In doing so the task forceauthors appear to side clearly with those who argue that the board has aderegnitive role in shaping an organizationrsquos mission However the regulatorsseem to have heard only half the message In April 2002 the TSX announcedthat the role of the board in adopting a strategic planning process would beexpanded to include only the approval of a strategic plan plusmn thereby once againrestricting the boardrsquos involvement in strategy making and direction setting toapproval but not development (TSX 2002) A quick review of variousinternational corporate governance codes only adds further confusion to thisstate of affairs beyond what is evident in Canada

Thus when it comes to the development of an organizationrsquos missionstatement there is presently no deregnitive answer plusmn and no widespreadacceptance plusmn regarding the division of responsibilities between the board andthe senior management We contend though that a major factor contributingto this situation is that all of the reports (including those not reviewed here) arenot based on any solid research Instead the regndingsrecommendations

Implications forcorporate

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365

contained in the various documents are in reality just a compilation ofopinions While those opinions may come from experienced corporate directorsand recognized thought leaders they are still just opinions and not factsReferences to empirical studies of board best practices (ie strategyformulation evaluation and monitoring) are virtually non-existent It is alsonot apparent that the various reports cited had commissioned any speciregcresearch studies to investigate verify and support their resultantrecommendations Accordingly this study endeavours to correct thissituation by focusing on a set of very speciregc research questions

Interestingly a recent presentation of some preliminary regndings by one ofthis paperrsquos co-authors suggested that a speciregc and deregnitive answer to thequestion of board involvement with mission exists (Bart 2003b) Howeverbecause those regndings were deemed provisional we decided to strengthen theoriginal analysis with more high-powered analytical techniques in order to givethe initial conclusions more weight Along the way signiregcant new insightswere gained

Research questionsNumerous questions regarding boards and their mission statements remainunanswered For instance to what extent are boards even aware of theirorganizationrsquos mission statement This question is important because ifresponsibility for mission belongs exclusively to senior management plusmn or ifdirectors do not see such responsibility as falling within their speciregc role set then one might expect to regnd little or no awareness of it on the part of the boardand hence little interest on their part in its development or content

Nevertheless even if the boards are aware of their organizationrsquos missionthey still may or may not feel that their participation in its development iswarranted Of course an important consideration in determining the board bestpractices vis-aAacute -vis mission statements concerns whether or not board awarenessandor involvement with the mission has any impact on the organization As theearlier discussion demonstrated there is very little guidance as to what is thecorrect posture that directors should adopt on these matters

In order to help boards better understand their roles in relation to theirorganizationrsquos mission statement a research project was designed whichsought to explore the relationship between the selected characteristics of boardand senior management awarenessinvolvement with their missions andselected performance-related outcome measures The speciregc questionsaddressed by this research were as follows

(1) To what extent are boards aware of their organizationrsquos mission

(2) To what extent are boards involved in the creation of their organizationrsquosmission

(3) How does board awarenessinvolvement compare with that of seniormanagement

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366

(4) Does the level of awarenessinvolvement with respect to the missionmatter in terms of enhancing the organizationrsquos intellectual capital andperformance

(5) What contributes most to the awareness of the mission

Method and measuresSample selection and sizeSurveys were delivered to the top manager (ie CEO President ExecutiveDirector Board Chairman) of 1000 North American organizations randomlyselected from the Fortune 1000 (USA) and Financial Post 500 (Canada) Asinformants senior management is most able to recognize the relativeimportance of organizational issues whether they are performance or strategyrelated (Glick et al 1990) The top manager was asked to complete the surveyor to delegate the task to someone knowledgeable with the organizationrsquosmission statement and its development A total of 339 completedquestionnaires were returned representing a response rate of 339 percentThe method of sample selection however restricts the claims which can bemade about the representativeness of the regndings as they do not appear toapply to organizations of all sizes cultures and sectors The regndings andconclusions in this study appear to have validity only in so far as larger-scaleEnglish-speaking North American organizations are concerned and this factshould be noted when considering the studyrsquos general applicability Descriptivestatistics of the respondent sample closely mirror that of the population fromwhich the sample was derived

Respondent title and response bias Of the responses received 372 percentwere from a top manager (ie CEO or Board Chairman) while the remainderwere senior level executives or managers (ie Senior Executives 266 percentSenior Managers 363 percent) A one-way ANOVA for each of the respondenttypes was examined against three important dependent variables (Figure 2)

(1) What is your overall satisfaction with the organizationrsquos regnancialperformance (Scale from 0 = very dissatisreged to 9 = very satisreged)

(2) Are individuals in the organization committed to the mission statement(Scale from 0 = not at all to 9 = to the greatest possible extent)

(3) How innovative is your organization (Scale from 0 = not all innovativeto 9 = extremely innovative)

Results of the one-way ANOVA show that there is no statistically signiregcantdifference in dependent variable outcomes based on respondent-type therebyyielding no evidence of response-bias in this study (F-stat = 533 743 1013p 0001)

Operationalizing mission awareness and involvement Respondents wereasked to rate separately the extent to which the board and senior managementwere aware of their organizationrsquos mission statement using a four-point scale(1 = not aware at all 2 = somewhat aware 3 = moderately aware 4 = highly

Implications forcorporate

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367

aware) Managers were then asked (again using a four-point scale) to indicatethe degree to which they were involved in developing their organizationrsquosmission statement (1 = no involvement at all 2 = somewhat involved3 = moderately involved 4 = highly involved)

Figure 3 shows that the awareness of mission statements and theinvolvement in developing them differed between senior management andboard members On average board members scored lower than theirmanagement counterparts in both awareness (348 vs 366) and involvement

Figure 2ANOVA test forresponse bias

Figure 3Awareness andinvolvement by boardand senior management

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(298 vs 374) However in absolute terms awareness and involvement with themission by board members and senior managers appears to be fairly high

Mission communication technique usage There were a variety of missioncommunication techniques that were measured in this study (see Figure 4) Onaverage the use of annual reports and employee manuals was the mostprominent communication method in use at 676 and 635 percent respectivelyAlternatively only 273 percent of respondents used advertisements tocommunicate their mission statements

Outcome measuresThree outcome measures were used in order to assess the effect of board andsenior management awareness and involvement with the mission

(1) the extent to which members throughout the organization areemotionally committed to the mission statement (Bart 1998a Bart andTabone 1999 Bart et al 2001)

(2) the extent to which respondents were satisreged with the regnancialperformance of their organization (Bart 1997b 1998a Bart and Baetz1998 Bart and Tabone 1999) and

(3) the extent of perceived innovativeness of the organization

Respondents were asked to rate each of these outcome measures on a ten-pointscale (ie 0 = not at all 9 = to the greatest possible extent)

Bontis and his colleagues (Bontis and Fitz-enz 2002 Bontis and Girardi2000 Bontis and Nikitopoulos 2001 Bontis et al 1999 2000 Choo and Bontis2002 OrsquoRegan et al 2001 Stovel and Bontis 2002) have shown that

Figure 4Techniques to

communicate missionstatement

Implications forcorporate

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369

organizational commitment is a critical antecedent to intellectual capitaldevelopment and performance outcomes Furthermore Bontis (1998) andBontis et al (2002) have shown in intellectual capital studies that perceivedmeasures of performance can be a reasonable substitute for objective measuresof performance (Dess and Robinson 1984) and have a signiregcant correlationwith objective measures of regnancial performance (Lyles and Salk 1997Venkatraman and Ramnujam 1987) Accordingly the interpretation of theresults from this study is that respondents were on average ordfmoderatelysatisregedordm with membersrsquo commitment to the mission statement (mean = 594)regnancial performance (mean = 586) and organizational innovativeness(mean = 587)

It is also important to note that a control variable was used to limitunnecessary variability of the endogenous constructs For this study eachorganization was asked to provide the year in which the organization regrstdeveloped a recorded mission statement That year was converted to the age(ie age = 2002 2 year) of the mission statement process since inception Theaverage year of inception of the mission process for the regrms in this study was1989 (or 13 years) This was required so that variability in performance couldnot be attributable solely to mission experience

Partial least squares modelHulland (1999) has noted that the use of partial least squares (PLS) as astructural equation modeling technique has received increased interest in thestrategic management literature in areas such as intellectual capitalmanagement (Bontis 1998 2003b Bontis et al 2000 2002) and missionstatements (Bart et al 2001) According to Hulland (1999 pp 202-3) this isbecause ordfcausal models such as PLS can help strategic managementresearchers to achieve new insights As the regeld of strategic managementcontinues to mature researchers need to increasingly rise to the challengeordmPLS also allows researchers to develop a systematic and holistic view whenestablishing measures to solve research problems For large-sample modelingLISREL (Bollen 1990 Joreskog and Sorbom 1984) has several relativestrengths whereas for small-sample predictive research PLS (Fornell andBookstein 1982 Hulland 1999) is more appropriate

In general the most complex models will involve

(1) the number of indicators on the most complex formative construct or

(2) the largest number of antecedent constructs leading to an endogenousconstruct

Sample size requirements become at least ten times the number of predictorsfrom (1) or (2) whichever is greater (Barclay et al 1995) In this case there are atotal of nine formative indicators on the most complex construct which iscommunication technique (ie advertisement annual reports etc) and a total

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370

of six antecedent constructs leading to the endogenous construct Thereforethe minimum sample requirements become 9 3 10 or 90 PLS is an adequatetechnique for this study since the sample size is 339 respondents All of theitems germane to this study were therefore assigned to their respective scalesusing PLS as suggested by Barclay et al (1995) and Hulland (1999)

Reliability and validityThe survey items and constructs were subjected to various psychometricevaluations to conregrm reliability and validity A Cronbach alpharsquos (a) measurewas used to test the reliability of the communication technique construct whichcontained nine items The alpha (a) value of 0839 is above the minimumthreshold of 07 as supported by Nunnally (1978) Shimp and Sharma (1987)suggest that items have loading values greater than 07 to ensure constructvalidity This procedure is also supported by Carmines and Zeller (1979) andHulland (1999) In this case only three of the nine items had loading valuesgreater than 07 and were therefore removed prior to the subsequent modellingexercise

Interestingly the three remaining communication techniques that were bothreliable and valid were not necessarily those most often used by therespondents Company information kits (l = 0732) newsletters (l = 0732)and internal documents (l = 0702) were used only by 596 531 and 574percent of respondents Conversely the most often used communicationtechnique of annual reports was used by two-thirds (676 percent) of therespondents Yet its construct validity (l = 0598) was below the thresholddenoting a suspiciously absent nomological connection to the board andmanagement awareness of mission statements (see Figure 5)

Similarly a latent performance construct was created using two of theoutcome measures identireged earlier plusmn both of which were found to be bothvalid and reliable The regrst item was overall satisfaction with the regnancial

Figure 5Construct validity and

reliability ofcommunication

technique

Implications forcorporate

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371

performance of the organization (l = 0837) and the second item was howinnovative the organization was (l = 0874)

Research limitationsWith respect to the present results a number of caveats pertaining to commonmethod single-respondent and social desirability biases should beacknowledged To address the possibility of common method bias aHermanrsquos one-factor test on the questionnaire measurement items wasconducted (Konrad and Linnehan 1995 Scott and Bruce 1994) A principalcomponents factor analysis yielded four factors with eigenvalues greater than10 that accounted for 51 percent of the variance Since several factors asopposed to one single factor were identireged and since the regrst factor did notaccount for the majority of the variance (only 29 percent) a substantial amountof common method variance does not appear to be present (Podsakoff andOrgan 1986) Nevertheless the presence of common method problems cannotbe fully discarded

An important methodological imperative for this study was for eachrespondent to be highly familiar with the mission statement and its resultantorganizational effect In this respect the study was considered satisfactorysince the majority of respondents were top executives in their respectiveorganizations Given the singularity and specialized knowledge associatedwith these informants a single-informant approach was deemed best and wastherefore used We believed that less knowledgeable informants would result inless accurate data

Whereas survey data are sometimes subject to social desirability bias(Arnold and Feldman 1981 Podsakoff and Organ 1986) we do not perceivesuch bias to be a major concern for this study The topic of investigationalthough strategic was not thought to be so highly sensitive as to be likely toprevent responses that would present the respondent or organization in anunfavourable light In addition much of the information obtained was notdeemed highly conregdential However the occurrence of such bias cannot betotally ruled out

ResultsFigure 6 shows the regnal specireged PLS structural equation model Each pathand beta coefregcient displayed are both substantive and signiregcant Theexplanatory power of the model is relatively high for survey research at 334percent and denotes a strong conregdence in the explanation of performancevariance attributable to mission communication involvement awareness andcommitment (see Figure 6)

Missions communication technique and awareness (b1 and b2)The beta path (b1) coefregcient from communication technique to boardawareness is 0362 while the beta path (b2) from communication technique to

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372

management awareness is 0294 These results support the notion that theselected mission communication techniques aid in raising awareness of themission statement for both the board members and senior managementFurthermore the magnitude of this impact is relatively higher for boards Thecommunication technique construct however was not found to have any directimpact on the measure for member commitment to the mission

Involvement and awareness (b3 b4 and b5)The beta path (b3) coefregcient from board involvement to board awareness is0441 while the beta path (b4) from board involvement to managementawareness is 0128 These results support the notion that involvement with themission development process by the board is important in raising the boardrsquosawareness of the mission statement Similarly when the board is involved indeveloping their organizationrsquos mission it positively impacts managementrsquoscontinuing and current awareness of the mission plusmn though this latterrelationship is signiregcantly weaker

In contrast the beta path (b5) coefregcient from management involvement tomanagement awareness was found to be just 0158 while the beta path frommanagement involvement to board awareness was neither substantive norsigniregcant Therefore while managementrsquos involvement in the missiondevelopment process appears to encourage their continuing awareness of themission it does not appear to have any effect on the boardrsquos current awareness

Figure 6PLS structural

equation model

Implications forcorporate

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373

Antecedents to commitment (b6 b7 and b8)The beta path (b6) coefregcient from management involvement in missiondevelopment to membersrsquo commitment to the mission was established to be0139 while a beta path from either board involvement to commitment ormanagement involvement to board awareness did not exist What this suggestsis that while the commitment of an organizationrsquos members to the missionstatement can be directly supported by the managementrsquos involvement in themission development process the boardrsquos involvement acts as an antecedent tocommitment only indirectly and only through the process of raising its ownawareness (b3 and b4) Following that there are substantive and signiregcantpaths from both board awareness (b7 = 0150) and management awareness(b8 = 0173) to membersrsquo commitment to the mission

Commitment to performance (b9)The beta path (b9) coefregcient from individualsrsquo commitment to the missionstatement and performance was 0583 This is not at all surprising since itreplicates the regndings of a previous study by Bart et al (2001) But the regndingscontinue to underscore the tremendous impact and important role that membercommitment to the mission continues to have and to play respectively in termsof enhancing an organizationrsquos performance

DiscussionThere are a number of important and signiregcant regndings which havematerialized from the current study

Boardsrsquo awareness of their organizationrsquos missionThe regndings from Figure 3 suggest that directors and their boards appear to berelatively aware of their organizationrsquos mission plusmn though it was somewhatlower than managementrsquos Only a small percentage of respondents indicatedthat their board was ordfsomewhat awareordm of the mission and very few stated thatthere was no awareness at all Nevertheless for the most part there were still alarge number of directors who were not highly or fully aware of theirorganizationrsquos mission Therefore the question remains should they be In thisregard path analysis results are unequivocal Continuing board awareness ofthe mission plusmn whereby directors ordfknow understand and remember themissionordm plusmn is an important and signiregcant contributor to having individualsthroughout the organization commit to it The more aware the boards are oftheir organizationrsquos mission the greater their organizational membersrsquocommitment to it will be Moreover directorsrsquo awareness of the mission isequivalent in impact (with respect to membersrsquo commitment) in terms of bothmanagementrsquos awareness of the mission and managementrsquos involvement withthe missionrsquos development Consequently boards cannot afford to becomplacent when it comes to their organizationsrsquo mission and theircontinuing and current awareness of it

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374

This is a thought-provoking observation It suggests that the days of boardsbeing entertained every now and then with PowerPoint presentations of thecompany mission while the lobster sandwiches are passed around are overBoards must accept that the mission statement is a valuable and important toolin helping to set the strategic direction and positioning of the organization Itshould be the corner-stone of every organizationrsquos strategic plan Given thisimportance it cannot be given short shrift once it has been developed andintroduced to the organization Because every mission also needs thecontinuing commitment and support of all the organizational members if it is tobe ultimately achieved directors have an ongoing responsibility to keepthemselves aware of it as well

One obvious way in which they can help do this is to make sure that themission statement is a part of each board meeting and a part of every boarddiscussion Directors must refer to their organizationsrsquo mission regularly (notjust in a crisis) and use it to test managementrsquos ability to become and remainfocused Having the mission as part of every ordfboard packageordm would certainlyassist in this regard So would memorizing it in certain circumstancesDirectors also need to be assured that the mission is being achieved and thatthere is accountability for its implementation This in turn suggests that theremust be some sort of mechanism in place to measure the organizationrsquosprogress against the mission When actions such as these are taken directorswill help keep their organizationsrsquo mission alive not just for themselves but forthe rest of the gang as well (Please note though that additional comments onenhancing board awareness are being reserved for the following two sections)

Boardsrsquo involvement in the creation of their organizationrsquos missionThis paper began with the question of whether or not boards should beinvolved in the development of their organizationrsquos mission Unlike theprevious discussion on board awareness the regndings of Figure 3 show thatinvolvement by the board of directors in their organizationrsquos mission creationprocess is generally not a well accepted activity and generated the highestpercentage of responses in the category for ordfnot at allordm Whereas 80 percent ofthe respondents perceived their senior managements to be highly involved indeveloping their organizationsrsquo mission only 47 percent believed this to be thecase for the board Moreover informal conversations with established andsenior directors have suggested that board tradition typically dictates that therole of the board vis-aAacute -vis mission is for ordfmanagement to propose and for theboard to disposeordm The current regndings however would challenge thisviewpoint

Recall that the discussion in the previous section established the pivotal rolethat board awareness of the mission plays in terms of enhancing organizationalcommitment to the mission The results from path analysis in Figure 6however have demonstrated the critical importance of the boardrsquos involvement

Implications forcorporate

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375

in developing the mission if full board awareness of the mission is to beachieved Indeed of all the antecedent measures in the study it was boardinvolvement which obtained the strongest beta (b) score and was the No 1driver of board awareness Moreover the regndings of path analysis show thatwhile managementrsquos continuing awareness of the mission is also an importantconsideration in terms of securing organizational commitment to it thatawareness is produced almost equivalently from both their own plusmn and theboardrsquos plusmn involvement in mission development In other words it takes boththe boardrsquos and senior managementrsquos involvement to generate plusmn within theexecutive ranks plusmn the necessary and continuing knowledge and understanding(ie awareness) required to affect membersrsquo commitment to the missionInterestingly while management involvement by itself was also found to havea direct inmacruence on organizational commitment to the mission boardinvolvement did not Instead the boardrsquos impact on organizational commitmentto the mission is ordffeltordm through their ongoing awareness of it

Now this is a provocative notion since in the eyes of many individualsmanagement typically represents and provides to a greater extent than theboard the pragmatic ongoing and de facto strategic leadership of theorganization Yet the results from the current study would argue that directorsrsquoinvolvement in a missionrsquos development is a constructive activity on the part ofthe board and an important contributor to organizational success Shouldboards be involved in creating their organizationrsquos mission The answer wouldappear to be a deregnitive ordfyesordm

Directors must now see their role in terms of getting involved in thedevelopment of their organizationrsquos mission in order to raise awareness of it forthemselves and for management and raising awareness of the mission forthemselves in order to create and inmacruence higher levels of commitment to itthroughout the organization Consequently the regndings should be seen ashelping to put to rest the current debate concerning the nature and degree ofboard involvement in mission development Boards must get involved and it iswrong for them not to do so The research regndings thus represent for the regrsttime a true ordfbest practiceordm in corporate governance research The currentcorporate governance literature needs to be revised to take these results intoaccount

Mission communication and awarenessWhen the various techniques to communicate the mission were analyzed anumber of interesting observation were made To begin with when the relativeranking of the various communication methods (as shown in Figure 4) wasreviewed it appeared that there was no one technique which appeared to be theoverwhelming favourite The annual report appeared to be the most popular plusmnand perhaps the most obvious plusmn place for ensuring the widest possibledissemination of the mission among the various stakeholder populations After

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all anyone with a serious interest or ordfstakeordm in the organization would be sureto see the mission in this document The employee manual and posters werealso seen as logical choices for communicating the mission to employee groupsHowever no one technique achieved a usage rating greater than 67 percent andmost communication methods could be said to be used only to a moderateextent (mean score range 256-294) plusmn with the exception of advertisementswhich was clearly and indisputably the least favourite technique (mean score184)

It therefore came as somewhat of a surprise that when the communicationconstruct was created only three communication methods were found to bereliable and valid (ie company information kits company newsletters andother internal documents (such as company strategic and operating plansbudgets MBO and bonus criteria) Yet when these results were furtherdissected and contemplated they appeared to make considerable sense Foreffective communication to take place a ordfmessageordm must be sent receivedunderstood and remembered (Bart 2002) Accordingly while annual reportsmay be the most frequently used document for communicating anorganizationrsquos mission they are not the most effective This is because theyare often not read not widely read or not completely read As a result themission message while ordfsentordm is not necessarily received understood orremembered Similarly employee manuals may plusmn and probably should plusmncontain explicit reference to their organizationrsquos mission However how manytimes has anyone as employees ever referred to the mission by quoting it fromthe company manual Probably few if any at all

In contrast the communication techniques which appear to have a lastingand profound impact in terms of taking a mission message beyond its ordfsentpointordm are those which are designed to

create special attention (ie an information kit which is dedicated toexplaining the mission and can be used as a reference guide)

create ongoing attention and deal with short attention spans (egcompany newsletters) and

focus resource allocations (eg strategic and operational plans)

Thus when these documents are used most people pay attention Furthermorepath analysis conregrmed that both the board and management seem to belistening Indeed for the board the communication construct was the secondmost powerful inmacruencer in terms of its positive impact on board awareness ofthe mission Only board involvement with the mission was more importantHowever in terms of managementrsquos awareness results revealed that it was thecommunication construct which had the most profound impact plusmn almostdouble that of any other variables

These regndings are signiregcant They show that in terms of creatingcontinuing awareness on the part of boards with respect to their organizationsrsquo

Implications forcorporate

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377

missions it is necessary to regrst and foremost engage them actively andconstructively in its development Involvement begets awareness To keepthem continually aware various selected communication techniques then needto be deployed But those techniques will be impotent in terms of their effect ifthe board has not regrst made the commitment of time and energy to thedevelopment of the organizationrsquos mission There is no ordfViagraordm cure when thishas not taken place So boards need to understand how the timing andsequence of their awareness are created and sustained Hopefully this researchhelps to establish the proper path to be followed

The observations with respect to management awareness of the mission arealso intriguing As with the case of the board there is no question thatmanagement involvement in developing the mission produces a certain level ofongoing awareness Similarly one would expect that when the board is alsoinvolved it acts as a strong signal to management that the mission is moreimportant than might otherwise be found in organizations where the boardignores it When combined managementrsquos involvement and awareness have atremendous effect on the commitment that organizational members have withrespect to their mission But to sustain managementrsquos interest in the missionand keep their interest in the mission robust the regndings show that it is thecommunication construct plusmn with its three critical communication techniques plusmnwhich has the greatest impact Boards and their managements would do well toensure that these techniques are being regularly deployed if they are seriouslyinterested in making sure that senior executives do not lose sight of the missionor lose enthusiasm for it Relentless repetition of the mission message isprobably still the only way to ensure that the message is remembered plusmn the lastbut essential component of the rules for effective communication (Bart 2002)

ConclusionsIf there is one regnal thought it is this boards need to be more involved indeveloping plusmn and be continuously aware of plusmn their organizationrsquos mission Boardinvolvement matters So too does their awareness For too long there has been alack of clear guidance with respect to the boardrsquos role in mission The extantliterature is contradictory and confusing These results therefore represent asigniregcant and profound milestone for the literature on corporate governanceThe results herein demonstrate and prove ordfbest practiceordm while challengingmany of the assumptions underlying current board practices in this provocativearea Accordingly it is recommended that board involvement with a missionrsquosdevelopment plusmn and continuous awareness of it plusmn need to be both recognizedformally in an organizationrsquos governance structure (eg board charters) andproposed as an amendment to most governance codes currently in force It is alsorecommended that given this new responsibility for mission developmentdirectors need to be sufregciently trained in strategy development so that they canwith management develop a shared view on what the future of the organization

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should be and why it exists However to do so effectively both boards andmanagement need to develop a common language and strategic analysisframework Recent developments at the newly formed Directors College (a jointventure of the DeGroote Business School at McMaster University and theConference Board of Canada (see wwwthedirectorscollegecom)) should helpboards and their managements considerably in this regard

References

Arnold HJ and Feldman DC (1981) ordfSocial desirability response bias in self-report choicesituationsordm Academy of Management Journal Vol 24 pp 377-85

Baetz MC and Bart CK (1996) ordfDeveloping mission statements which workordm Long RangePlanning Vol 29 No 4 pp 524-31

Barclay DW Higgins C and Thompson R (1995) ordfThe partial least squares (PLS) approach tocausal modeling personal computer adaptation and use as illustrationordm TechnologyStudies Vol 2 No 2 pp 285-309

Bart CK (1997a) ordfSex lies and mission statementsordm Business Horizons November-Decemberpp 9-18

Bart CK (1997b) ordfIndustrial regrms and the power of missionordm Industrial MarketingManagement Vol 26 pp 371-83

Bart CK (1997c) ordfMission possibleordm CA Magazine September pp 33-4

Bart CK (1998a) ordfA comparison of mission statements and their rationales in innovative andnon-innovative regrmsordm International Journal of Technology Management Vol 16 No 1-3pp 64-77

Bart CK (1998b) ordfMission mattersordm CA Magazine March pp 31-41

Bart CK (1999a) ordfMaking mission statements countordm CA Magazine March pp 37-47

Bart CK (1999b) ordfAccepting the missionordm CA Magazine August pp 33-4

Bart CK (2000) ordfLasting inspirationordm CA Magazine May pp 49-50

Bart CK (2001a) ordfMeasuring the mission effect in human intellectual capitalordm Journal ofIntellectual Capital Research Vol 2 No 3 pp 320-30

Bart CK (2001b) ordfWhorsquos running the storeordm CA Magazine August pp 22-7

Bart CK (2002) A Tale of Two Employees Corporate Missions Inc Press Hamilton

Bart CK (2003a) ordfInnovation mission statements and learningordm International Journal ofInnovation and Learning forthcoming

Bart CK (2003b) ordfGood governance and intellectual capitalordm paper presented at the 24thMcMaster World Congress on the Management of Intellectual Capital and ElectronicCommerce Hamilton

Bart CK and Baetz MJ (1998) ordfThe relationship between mission statements and regrmperformance an exploratory studyordm Journal of Management Studies Vol 36 No 6pp 823-53

Bart CK and Tabone JC (1999) ordfMission statement content and hospital performance in theCanadian not-for-proregt health-care sectorordm Health Care Management Review Vol 24 No 3pp 18-29

Bart CK Bontis N and Taggar S (2001) ordfA model of mission statements and regrmperformanceordm Management Decision Vol 39 No 1 pp 19-35

Implications forcorporate

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379

Unfortunately again an easy answer to this question is not readilyforthcoming Based on a review of the extant literature there is no uniformityin terms of the positions taken Consequently directors could become easilyfrustrated in searching for guidance on how to structure their jobs when itcomes to strategy in general and mission in particular Take the Institute ofCorporate Directors of Canada (ICD) for instance It has stated on one occasionthat the task facing the board includes the need to determine strategicobjectives as prepared and recommended by management (ICD 1988) Withthis statement the ICD appeared to confer on corporate boards a fairly activerole in the actual formulation of mission goals Yet four years later the ICDwas seen to claw back the boardrsquos authority for strategy by arguing that aboard need only take responsibility for approving strategic objectives (ICD1992) No apparent rationale for this change in position was offered

A series of studies by the Canadian Institute of Chartered Accountants(CICA) appears to take a much more uniform position with respect to directorinvolvement in company strategy One of its early monographs focusing on thegovernance processes associated with effective control stated that approvaland monitoring of the organizationrsquos mission vision and strategy are one of theboardrsquos most important responsibilities and that the board should review andapprove the mission vision and strategy on a periodic basis and when majorshifts occur (CICA 1995a) A subsequent monograph outlining the CICArsquosview regarding the criteria that should be used to establish effective controlreiterated the earlier position It stated that an explicit mission and clear visionare key elements of control and should be approved by the board of directors(CICA 1995b) A third document providing guidance for directors with respectto risk however seems to soften the directorsrsquo role in strategy considerablywhen it urges directors to simply have a clear sense of corporate purpose and tobe committed to achieving it (CICA 1999)

It is notable that none of the positions taken by the CICA in the documentscited earlier argues for the boardrsquos active participation in the formulation of anorganizationrsquos strategy or its revision In fact the overall impression created isof a board which just receives and reviews managementrsquos stated mission forthe enterprise poses a few questions and perhaps challenges someassumptions but in the end raises its hands and simply ordfapproves the damnthingordm The boardrsquos role in strategy is therefore one of interested bystandersand passive approval rather than active engagement

How then in such circumstances does effective control by the board occurThe answer appears to lie largely in their monitoring of the companyrsquosperformance plusmn relative to the approved mission and strategic plan plusmn wherebyfailure to achieve the stated goals provides the basis upon which conregdence inthe CEO is altered But so long as the CEO delivers on hisher promises thenno action need be taken Mission accomplished However such an approach tocontrol would seem to support only low-stretch objectives and assumes that

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directors plusmn lacking sufregcient time information and expertise plusmn have littlechoice but to approve strategic plans

A somewhat different perspective occurs when the report of the NACD BlueRibbon Commission concerning the role of the board in corporate strategy isexamined (NACD 2001) The report identireges a clear need for corporate boardsto be actively involved in the development and approval of an organizationrsquosstrategy and exhorts boards and management to view board participation incorporate strategy as a cooperative and not as an adversarial process Thereport also reinforces the importance of a boardrsquos long-standing and historicalstrength with respect to strategy (ie probing questioning and constructivelychallenging and criticizing organizational strategy)

The report unfortunately though is confusing and contradictory in terms ofits regnal stance regarding the degree of board involvement in strategy As aresult it is unclear whether boards should help develop their organizationrsquosmission or not (ie the NACD (2001) report in one section on page 4 says thatthey should not develop strategy and then in another section on page 8 arguesthat the board should assess discuss amend and urge corrections withmanagement) While the report emphasizes the need for boards to beconstructively involved in strategy there is little elaboration concerning whatthe authors of the report exactly meant by this term

A variation of this was also seen to occur recently when a Canadian taskforce on corporate governance recommended that the Toronto Stock Exchange(TSX) amend its guidelines to make clear that the boardrsquos responsibility goesbeyond the adoption of a strategic planning process (Joint Committee onCorporate Governance 2001) The report recommended that the board shouldbe responsible for contributing to the development of strategic direction andapproving a strategic plan that takes into account an identiregcation of businessopportunities and business risks (TSX 2002) In doing so the task forceauthors appear to side clearly with those who argue that the board has aderegnitive role in shaping an organizationrsquos mission However the regulatorsseem to have heard only half the message In April 2002 the TSX announcedthat the role of the board in adopting a strategic planning process would beexpanded to include only the approval of a strategic plan plusmn thereby once againrestricting the boardrsquos involvement in strategy making and direction setting toapproval but not development (TSX 2002) A quick review of variousinternational corporate governance codes only adds further confusion to thisstate of affairs beyond what is evident in Canada

Thus when it comes to the development of an organizationrsquos missionstatement there is presently no deregnitive answer plusmn and no widespreadacceptance plusmn regarding the division of responsibilities between the board andthe senior management We contend though that a major factor contributingto this situation is that all of the reports (including those not reviewed here) arenot based on any solid research Instead the regndingsrecommendations

Implications forcorporate

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365

contained in the various documents are in reality just a compilation ofopinions While those opinions may come from experienced corporate directorsand recognized thought leaders they are still just opinions and not factsReferences to empirical studies of board best practices (ie strategyformulation evaluation and monitoring) are virtually non-existent It is alsonot apparent that the various reports cited had commissioned any speciregcresearch studies to investigate verify and support their resultantrecommendations Accordingly this study endeavours to correct thissituation by focusing on a set of very speciregc research questions

Interestingly a recent presentation of some preliminary regndings by one ofthis paperrsquos co-authors suggested that a speciregc and deregnitive answer to thequestion of board involvement with mission exists (Bart 2003b) Howeverbecause those regndings were deemed provisional we decided to strengthen theoriginal analysis with more high-powered analytical techniques in order to givethe initial conclusions more weight Along the way signiregcant new insightswere gained

Research questionsNumerous questions regarding boards and their mission statements remainunanswered For instance to what extent are boards even aware of theirorganizationrsquos mission statement This question is important because ifresponsibility for mission belongs exclusively to senior management plusmn or ifdirectors do not see such responsibility as falling within their speciregc role set then one might expect to regnd little or no awareness of it on the part of the boardand hence little interest on their part in its development or content

Nevertheless even if the boards are aware of their organizationrsquos missionthey still may or may not feel that their participation in its development iswarranted Of course an important consideration in determining the board bestpractices vis-aAacute -vis mission statements concerns whether or not board awarenessandor involvement with the mission has any impact on the organization As theearlier discussion demonstrated there is very little guidance as to what is thecorrect posture that directors should adopt on these matters

In order to help boards better understand their roles in relation to theirorganizationrsquos mission statement a research project was designed whichsought to explore the relationship between the selected characteristics of boardand senior management awarenessinvolvement with their missions andselected performance-related outcome measures The speciregc questionsaddressed by this research were as follows

(1) To what extent are boards aware of their organizationrsquos mission

(2) To what extent are boards involved in the creation of their organizationrsquosmission

(3) How does board awarenessinvolvement compare with that of seniormanagement

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366

(4) Does the level of awarenessinvolvement with respect to the missionmatter in terms of enhancing the organizationrsquos intellectual capital andperformance

(5) What contributes most to the awareness of the mission

Method and measuresSample selection and sizeSurveys were delivered to the top manager (ie CEO President ExecutiveDirector Board Chairman) of 1000 North American organizations randomlyselected from the Fortune 1000 (USA) and Financial Post 500 (Canada) Asinformants senior management is most able to recognize the relativeimportance of organizational issues whether they are performance or strategyrelated (Glick et al 1990) The top manager was asked to complete the surveyor to delegate the task to someone knowledgeable with the organizationrsquosmission statement and its development A total of 339 completedquestionnaires were returned representing a response rate of 339 percentThe method of sample selection however restricts the claims which can bemade about the representativeness of the regndings as they do not appear toapply to organizations of all sizes cultures and sectors The regndings andconclusions in this study appear to have validity only in so far as larger-scaleEnglish-speaking North American organizations are concerned and this factshould be noted when considering the studyrsquos general applicability Descriptivestatistics of the respondent sample closely mirror that of the population fromwhich the sample was derived

Respondent title and response bias Of the responses received 372 percentwere from a top manager (ie CEO or Board Chairman) while the remainderwere senior level executives or managers (ie Senior Executives 266 percentSenior Managers 363 percent) A one-way ANOVA for each of the respondenttypes was examined against three important dependent variables (Figure 2)

(1) What is your overall satisfaction with the organizationrsquos regnancialperformance (Scale from 0 = very dissatisreged to 9 = very satisreged)

(2) Are individuals in the organization committed to the mission statement(Scale from 0 = not at all to 9 = to the greatest possible extent)

(3) How innovative is your organization (Scale from 0 = not all innovativeto 9 = extremely innovative)

Results of the one-way ANOVA show that there is no statistically signiregcantdifference in dependent variable outcomes based on respondent-type therebyyielding no evidence of response-bias in this study (F-stat = 533 743 1013p 0001)

Operationalizing mission awareness and involvement Respondents wereasked to rate separately the extent to which the board and senior managementwere aware of their organizationrsquos mission statement using a four-point scale(1 = not aware at all 2 = somewhat aware 3 = moderately aware 4 = highly

Implications forcorporate

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367

aware) Managers were then asked (again using a four-point scale) to indicatethe degree to which they were involved in developing their organizationrsquosmission statement (1 = no involvement at all 2 = somewhat involved3 = moderately involved 4 = highly involved)

Figure 3 shows that the awareness of mission statements and theinvolvement in developing them differed between senior management andboard members On average board members scored lower than theirmanagement counterparts in both awareness (348 vs 366) and involvement

Figure 2ANOVA test forresponse bias

Figure 3Awareness andinvolvement by boardand senior management

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(298 vs 374) However in absolute terms awareness and involvement with themission by board members and senior managers appears to be fairly high

Mission communication technique usage There were a variety of missioncommunication techniques that were measured in this study (see Figure 4) Onaverage the use of annual reports and employee manuals was the mostprominent communication method in use at 676 and 635 percent respectivelyAlternatively only 273 percent of respondents used advertisements tocommunicate their mission statements

Outcome measuresThree outcome measures were used in order to assess the effect of board andsenior management awareness and involvement with the mission

(1) the extent to which members throughout the organization areemotionally committed to the mission statement (Bart 1998a Bart andTabone 1999 Bart et al 2001)

(2) the extent to which respondents were satisreged with the regnancialperformance of their organization (Bart 1997b 1998a Bart and Baetz1998 Bart and Tabone 1999) and

(3) the extent of perceived innovativeness of the organization

Respondents were asked to rate each of these outcome measures on a ten-pointscale (ie 0 = not at all 9 = to the greatest possible extent)

Bontis and his colleagues (Bontis and Fitz-enz 2002 Bontis and Girardi2000 Bontis and Nikitopoulos 2001 Bontis et al 1999 2000 Choo and Bontis2002 OrsquoRegan et al 2001 Stovel and Bontis 2002) have shown that

Figure 4Techniques to

communicate missionstatement

Implications forcorporate

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369

organizational commitment is a critical antecedent to intellectual capitaldevelopment and performance outcomes Furthermore Bontis (1998) andBontis et al (2002) have shown in intellectual capital studies that perceivedmeasures of performance can be a reasonable substitute for objective measuresof performance (Dess and Robinson 1984) and have a signiregcant correlationwith objective measures of regnancial performance (Lyles and Salk 1997Venkatraman and Ramnujam 1987) Accordingly the interpretation of theresults from this study is that respondents were on average ordfmoderatelysatisregedordm with membersrsquo commitment to the mission statement (mean = 594)regnancial performance (mean = 586) and organizational innovativeness(mean = 587)

It is also important to note that a control variable was used to limitunnecessary variability of the endogenous constructs For this study eachorganization was asked to provide the year in which the organization regrstdeveloped a recorded mission statement That year was converted to the age(ie age = 2002 2 year) of the mission statement process since inception Theaverage year of inception of the mission process for the regrms in this study was1989 (or 13 years) This was required so that variability in performance couldnot be attributable solely to mission experience

Partial least squares modelHulland (1999) has noted that the use of partial least squares (PLS) as astructural equation modeling technique has received increased interest in thestrategic management literature in areas such as intellectual capitalmanagement (Bontis 1998 2003b Bontis et al 2000 2002) and missionstatements (Bart et al 2001) According to Hulland (1999 pp 202-3) this isbecause ordfcausal models such as PLS can help strategic managementresearchers to achieve new insights As the regeld of strategic managementcontinues to mature researchers need to increasingly rise to the challengeordmPLS also allows researchers to develop a systematic and holistic view whenestablishing measures to solve research problems For large-sample modelingLISREL (Bollen 1990 Joreskog and Sorbom 1984) has several relativestrengths whereas for small-sample predictive research PLS (Fornell andBookstein 1982 Hulland 1999) is more appropriate

In general the most complex models will involve

(1) the number of indicators on the most complex formative construct or

(2) the largest number of antecedent constructs leading to an endogenousconstruct

Sample size requirements become at least ten times the number of predictorsfrom (1) or (2) whichever is greater (Barclay et al 1995) In this case there are atotal of nine formative indicators on the most complex construct which iscommunication technique (ie advertisement annual reports etc) and a total

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370

of six antecedent constructs leading to the endogenous construct Thereforethe minimum sample requirements become 9 3 10 or 90 PLS is an adequatetechnique for this study since the sample size is 339 respondents All of theitems germane to this study were therefore assigned to their respective scalesusing PLS as suggested by Barclay et al (1995) and Hulland (1999)

Reliability and validityThe survey items and constructs were subjected to various psychometricevaluations to conregrm reliability and validity A Cronbach alpharsquos (a) measurewas used to test the reliability of the communication technique construct whichcontained nine items The alpha (a) value of 0839 is above the minimumthreshold of 07 as supported by Nunnally (1978) Shimp and Sharma (1987)suggest that items have loading values greater than 07 to ensure constructvalidity This procedure is also supported by Carmines and Zeller (1979) andHulland (1999) In this case only three of the nine items had loading valuesgreater than 07 and were therefore removed prior to the subsequent modellingexercise

Interestingly the three remaining communication techniques that were bothreliable and valid were not necessarily those most often used by therespondents Company information kits (l = 0732) newsletters (l = 0732)and internal documents (l = 0702) were used only by 596 531 and 574percent of respondents Conversely the most often used communicationtechnique of annual reports was used by two-thirds (676 percent) of therespondents Yet its construct validity (l = 0598) was below the thresholddenoting a suspiciously absent nomological connection to the board andmanagement awareness of mission statements (see Figure 5)

Similarly a latent performance construct was created using two of theoutcome measures identireged earlier plusmn both of which were found to be bothvalid and reliable The regrst item was overall satisfaction with the regnancial

Figure 5Construct validity and

reliability ofcommunication

technique

Implications forcorporate

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371

performance of the organization (l = 0837) and the second item was howinnovative the organization was (l = 0874)

Research limitationsWith respect to the present results a number of caveats pertaining to commonmethod single-respondent and social desirability biases should beacknowledged To address the possibility of common method bias aHermanrsquos one-factor test on the questionnaire measurement items wasconducted (Konrad and Linnehan 1995 Scott and Bruce 1994) A principalcomponents factor analysis yielded four factors with eigenvalues greater than10 that accounted for 51 percent of the variance Since several factors asopposed to one single factor were identireged and since the regrst factor did notaccount for the majority of the variance (only 29 percent) a substantial amountof common method variance does not appear to be present (Podsakoff andOrgan 1986) Nevertheless the presence of common method problems cannotbe fully discarded

An important methodological imperative for this study was for eachrespondent to be highly familiar with the mission statement and its resultantorganizational effect In this respect the study was considered satisfactorysince the majority of respondents were top executives in their respectiveorganizations Given the singularity and specialized knowledge associatedwith these informants a single-informant approach was deemed best and wastherefore used We believed that less knowledgeable informants would result inless accurate data

Whereas survey data are sometimes subject to social desirability bias(Arnold and Feldman 1981 Podsakoff and Organ 1986) we do not perceivesuch bias to be a major concern for this study The topic of investigationalthough strategic was not thought to be so highly sensitive as to be likely toprevent responses that would present the respondent or organization in anunfavourable light In addition much of the information obtained was notdeemed highly conregdential However the occurrence of such bias cannot betotally ruled out

ResultsFigure 6 shows the regnal specireged PLS structural equation model Each pathand beta coefregcient displayed are both substantive and signiregcant Theexplanatory power of the model is relatively high for survey research at 334percent and denotes a strong conregdence in the explanation of performancevariance attributable to mission communication involvement awareness andcommitment (see Figure 6)

Missions communication technique and awareness (b1 and b2)The beta path (b1) coefregcient from communication technique to boardawareness is 0362 while the beta path (b2) from communication technique to

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372

management awareness is 0294 These results support the notion that theselected mission communication techniques aid in raising awareness of themission statement for both the board members and senior managementFurthermore the magnitude of this impact is relatively higher for boards Thecommunication technique construct however was not found to have any directimpact on the measure for member commitment to the mission

Involvement and awareness (b3 b4 and b5)The beta path (b3) coefregcient from board involvement to board awareness is0441 while the beta path (b4) from board involvement to managementawareness is 0128 These results support the notion that involvement with themission development process by the board is important in raising the boardrsquosawareness of the mission statement Similarly when the board is involved indeveloping their organizationrsquos mission it positively impacts managementrsquoscontinuing and current awareness of the mission plusmn though this latterrelationship is signiregcantly weaker

In contrast the beta path (b5) coefregcient from management involvement tomanagement awareness was found to be just 0158 while the beta path frommanagement involvement to board awareness was neither substantive norsigniregcant Therefore while managementrsquos involvement in the missiondevelopment process appears to encourage their continuing awareness of themission it does not appear to have any effect on the boardrsquos current awareness

Figure 6PLS structural

equation model

Implications forcorporate

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373

Antecedents to commitment (b6 b7 and b8)The beta path (b6) coefregcient from management involvement in missiondevelopment to membersrsquo commitment to the mission was established to be0139 while a beta path from either board involvement to commitment ormanagement involvement to board awareness did not exist What this suggestsis that while the commitment of an organizationrsquos members to the missionstatement can be directly supported by the managementrsquos involvement in themission development process the boardrsquos involvement acts as an antecedent tocommitment only indirectly and only through the process of raising its ownawareness (b3 and b4) Following that there are substantive and signiregcantpaths from both board awareness (b7 = 0150) and management awareness(b8 = 0173) to membersrsquo commitment to the mission

Commitment to performance (b9)The beta path (b9) coefregcient from individualsrsquo commitment to the missionstatement and performance was 0583 This is not at all surprising since itreplicates the regndings of a previous study by Bart et al (2001) But the regndingscontinue to underscore the tremendous impact and important role that membercommitment to the mission continues to have and to play respectively in termsof enhancing an organizationrsquos performance

DiscussionThere are a number of important and signiregcant regndings which havematerialized from the current study

Boardsrsquo awareness of their organizationrsquos missionThe regndings from Figure 3 suggest that directors and their boards appear to berelatively aware of their organizationrsquos mission plusmn though it was somewhatlower than managementrsquos Only a small percentage of respondents indicatedthat their board was ordfsomewhat awareordm of the mission and very few stated thatthere was no awareness at all Nevertheless for the most part there were still alarge number of directors who were not highly or fully aware of theirorganizationrsquos mission Therefore the question remains should they be In thisregard path analysis results are unequivocal Continuing board awareness ofthe mission plusmn whereby directors ordfknow understand and remember themissionordm plusmn is an important and signiregcant contributor to having individualsthroughout the organization commit to it The more aware the boards are oftheir organizationrsquos mission the greater their organizational membersrsquocommitment to it will be Moreover directorsrsquo awareness of the mission isequivalent in impact (with respect to membersrsquo commitment) in terms of bothmanagementrsquos awareness of the mission and managementrsquos involvement withthe missionrsquos development Consequently boards cannot afford to becomplacent when it comes to their organizationsrsquo mission and theircontinuing and current awareness of it

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This is a thought-provoking observation It suggests that the days of boardsbeing entertained every now and then with PowerPoint presentations of thecompany mission while the lobster sandwiches are passed around are overBoards must accept that the mission statement is a valuable and important toolin helping to set the strategic direction and positioning of the organization Itshould be the corner-stone of every organizationrsquos strategic plan Given thisimportance it cannot be given short shrift once it has been developed andintroduced to the organization Because every mission also needs thecontinuing commitment and support of all the organizational members if it is tobe ultimately achieved directors have an ongoing responsibility to keepthemselves aware of it as well

One obvious way in which they can help do this is to make sure that themission statement is a part of each board meeting and a part of every boarddiscussion Directors must refer to their organizationsrsquo mission regularly (notjust in a crisis) and use it to test managementrsquos ability to become and remainfocused Having the mission as part of every ordfboard packageordm would certainlyassist in this regard So would memorizing it in certain circumstancesDirectors also need to be assured that the mission is being achieved and thatthere is accountability for its implementation This in turn suggests that theremust be some sort of mechanism in place to measure the organizationrsquosprogress against the mission When actions such as these are taken directorswill help keep their organizationsrsquo mission alive not just for themselves but forthe rest of the gang as well (Please note though that additional comments onenhancing board awareness are being reserved for the following two sections)

Boardsrsquo involvement in the creation of their organizationrsquos missionThis paper began with the question of whether or not boards should beinvolved in the development of their organizationrsquos mission Unlike theprevious discussion on board awareness the regndings of Figure 3 show thatinvolvement by the board of directors in their organizationrsquos mission creationprocess is generally not a well accepted activity and generated the highestpercentage of responses in the category for ordfnot at allordm Whereas 80 percent ofthe respondents perceived their senior managements to be highly involved indeveloping their organizationsrsquo mission only 47 percent believed this to be thecase for the board Moreover informal conversations with established andsenior directors have suggested that board tradition typically dictates that therole of the board vis-aAacute -vis mission is for ordfmanagement to propose and for theboard to disposeordm The current regndings however would challenge thisviewpoint

Recall that the discussion in the previous section established the pivotal rolethat board awareness of the mission plays in terms of enhancing organizationalcommitment to the mission The results from path analysis in Figure 6however have demonstrated the critical importance of the boardrsquos involvement

Implications forcorporate

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375

in developing the mission if full board awareness of the mission is to beachieved Indeed of all the antecedent measures in the study it was boardinvolvement which obtained the strongest beta (b) score and was the No 1driver of board awareness Moreover the regndings of path analysis show thatwhile managementrsquos continuing awareness of the mission is also an importantconsideration in terms of securing organizational commitment to it thatawareness is produced almost equivalently from both their own plusmn and theboardrsquos plusmn involvement in mission development In other words it takes boththe boardrsquos and senior managementrsquos involvement to generate plusmn within theexecutive ranks plusmn the necessary and continuing knowledge and understanding(ie awareness) required to affect membersrsquo commitment to the missionInterestingly while management involvement by itself was also found to havea direct inmacruence on organizational commitment to the mission boardinvolvement did not Instead the boardrsquos impact on organizational commitmentto the mission is ordffeltordm through their ongoing awareness of it

Now this is a provocative notion since in the eyes of many individualsmanagement typically represents and provides to a greater extent than theboard the pragmatic ongoing and de facto strategic leadership of theorganization Yet the results from the current study would argue that directorsrsquoinvolvement in a missionrsquos development is a constructive activity on the part ofthe board and an important contributor to organizational success Shouldboards be involved in creating their organizationrsquos mission The answer wouldappear to be a deregnitive ordfyesordm

Directors must now see their role in terms of getting involved in thedevelopment of their organizationrsquos mission in order to raise awareness of it forthemselves and for management and raising awareness of the mission forthemselves in order to create and inmacruence higher levels of commitment to itthroughout the organization Consequently the regndings should be seen ashelping to put to rest the current debate concerning the nature and degree ofboard involvement in mission development Boards must get involved and it iswrong for them not to do so The research regndings thus represent for the regrsttime a true ordfbest practiceordm in corporate governance research The currentcorporate governance literature needs to be revised to take these results intoaccount

Mission communication and awarenessWhen the various techniques to communicate the mission were analyzed anumber of interesting observation were made To begin with when the relativeranking of the various communication methods (as shown in Figure 4) wasreviewed it appeared that there was no one technique which appeared to be theoverwhelming favourite The annual report appeared to be the most popular plusmnand perhaps the most obvious plusmn place for ensuring the widest possibledissemination of the mission among the various stakeholder populations After

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all anyone with a serious interest or ordfstakeordm in the organization would be sureto see the mission in this document The employee manual and posters werealso seen as logical choices for communicating the mission to employee groupsHowever no one technique achieved a usage rating greater than 67 percent andmost communication methods could be said to be used only to a moderateextent (mean score range 256-294) plusmn with the exception of advertisementswhich was clearly and indisputably the least favourite technique (mean score184)

It therefore came as somewhat of a surprise that when the communicationconstruct was created only three communication methods were found to bereliable and valid (ie company information kits company newsletters andother internal documents (such as company strategic and operating plansbudgets MBO and bonus criteria) Yet when these results were furtherdissected and contemplated they appeared to make considerable sense Foreffective communication to take place a ordfmessageordm must be sent receivedunderstood and remembered (Bart 2002) Accordingly while annual reportsmay be the most frequently used document for communicating anorganizationrsquos mission they are not the most effective This is because theyare often not read not widely read or not completely read As a result themission message while ordfsentordm is not necessarily received understood orremembered Similarly employee manuals may plusmn and probably should plusmncontain explicit reference to their organizationrsquos mission However how manytimes has anyone as employees ever referred to the mission by quoting it fromthe company manual Probably few if any at all

In contrast the communication techniques which appear to have a lastingand profound impact in terms of taking a mission message beyond its ordfsentpointordm are those which are designed to

create special attention (ie an information kit which is dedicated toexplaining the mission and can be used as a reference guide)

create ongoing attention and deal with short attention spans (egcompany newsletters) and

focus resource allocations (eg strategic and operational plans)

Thus when these documents are used most people pay attention Furthermorepath analysis conregrmed that both the board and management seem to belistening Indeed for the board the communication construct was the secondmost powerful inmacruencer in terms of its positive impact on board awareness ofthe mission Only board involvement with the mission was more importantHowever in terms of managementrsquos awareness results revealed that it was thecommunication construct which had the most profound impact plusmn almostdouble that of any other variables

These regndings are signiregcant They show that in terms of creatingcontinuing awareness on the part of boards with respect to their organizationsrsquo

Implications forcorporate

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377

missions it is necessary to regrst and foremost engage them actively andconstructively in its development Involvement begets awareness To keepthem continually aware various selected communication techniques then needto be deployed But those techniques will be impotent in terms of their effect ifthe board has not regrst made the commitment of time and energy to thedevelopment of the organizationrsquos mission There is no ordfViagraordm cure when thishas not taken place So boards need to understand how the timing andsequence of their awareness are created and sustained Hopefully this researchhelps to establish the proper path to be followed

The observations with respect to management awareness of the mission arealso intriguing As with the case of the board there is no question thatmanagement involvement in developing the mission produces a certain level ofongoing awareness Similarly one would expect that when the board is alsoinvolved it acts as a strong signal to management that the mission is moreimportant than might otherwise be found in organizations where the boardignores it When combined managementrsquos involvement and awareness have atremendous effect on the commitment that organizational members have withrespect to their mission But to sustain managementrsquos interest in the missionand keep their interest in the mission robust the regndings show that it is thecommunication construct plusmn with its three critical communication techniques plusmnwhich has the greatest impact Boards and their managements would do well toensure that these techniques are being regularly deployed if they are seriouslyinterested in making sure that senior executives do not lose sight of the missionor lose enthusiasm for it Relentless repetition of the mission message isprobably still the only way to ensure that the message is remembered plusmn the lastbut essential component of the rules for effective communication (Bart 2002)

ConclusionsIf there is one regnal thought it is this boards need to be more involved indeveloping plusmn and be continuously aware of plusmn their organizationrsquos mission Boardinvolvement matters So too does their awareness For too long there has been alack of clear guidance with respect to the boardrsquos role in mission The extantliterature is contradictory and confusing These results therefore represent asigniregcant and profound milestone for the literature on corporate governanceThe results herein demonstrate and prove ordfbest practiceordm while challengingmany of the assumptions underlying current board practices in this provocativearea Accordingly it is recommended that board involvement with a missionrsquosdevelopment plusmn and continuous awareness of it plusmn need to be both recognizedformally in an organizationrsquos governance structure (eg board charters) andproposed as an amendment to most governance codes currently in force It is alsorecommended that given this new responsibility for mission developmentdirectors need to be sufregciently trained in strategy development so that they canwith management develop a shared view on what the future of the organization

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should be and why it exists However to do so effectively both boards andmanagement need to develop a common language and strategic analysisframework Recent developments at the newly formed Directors College (a jointventure of the DeGroote Business School at McMaster University and theConference Board of Canada (see wwwthedirectorscollegecom)) should helpboards and their managements considerably in this regard

References

Arnold HJ and Feldman DC (1981) ordfSocial desirability response bias in self-report choicesituationsordm Academy of Management Journal Vol 24 pp 377-85

Baetz MC and Bart CK (1996) ordfDeveloping mission statements which workordm Long RangePlanning Vol 29 No 4 pp 524-31

Barclay DW Higgins C and Thompson R (1995) ordfThe partial least squares (PLS) approach tocausal modeling personal computer adaptation and use as illustrationordm TechnologyStudies Vol 2 No 2 pp 285-309

Bart CK (1997a) ordfSex lies and mission statementsordm Business Horizons November-Decemberpp 9-18

Bart CK (1997b) ordfIndustrial regrms and the power of missionordm Industrial MarketingManagement Vol 26 pp 371-83

Bart CK (1997c) ordfMission possibleordm CA Magazine September pp 33-4

Bart CK (1998a) ordfA comparison of mission statements and their rationales in innovative andnon-innovative regrmsordm International Journal of Technology Management Vol 16 No 1-3pp 64-77

Bart CK (1998b) ordfMission mattersordm CA Magazine March pp 31-41

Bart CK (1999a) ordfMaking mission statements countordm CA Magazine March pp 37-47

Bart CK (1999b) ordfAccepting the missionordm CA Magazine August pp 33-4

Bart CK (2000) ordfLasting inspirationordm CA Magazine May pp 49-50

Bart CK (2001a) ordfMeasuring the mission effect in human intellectual capitalordm Journal ofIntellectual Capital Research Vol 2 No 3 pp 320-30

Bart CK (2001b) ordfWhorsquos running the storeordm CA Magazine August pp 22-7

Bart CK (2002) A Tale of Two Employees Corporate Missions Inc Press Hamilton

Bart CK (2003a) ordfInnovation mission statements and learningordm International Journal ofInnovation and Learning forthcoming

Bart CK (2003b) ordfGood governance and intellectual capitalordm paper presented at the 24thMcMaster World Congress on the Management of Intellectual Capital and ElectronicCommerce Hamilton

Bart CK and Baetz MJ (1998) ordfThe relationship between mission statements and regrmperformance an exploratory studyordm Journal of Management Studies Vol 36 No 6pp 823-53

Bart CK and Tabone JC (1999) ordfMission statement content and hospital performance in theCanadian not-for-proregt health-care sectorordm Health Care Management Review Vol 24 No 3pp 18-29

Bart CK Bontis N and Taggar S (2001) ordfA model of mission statements and regrmperformanceordm Management Decision Vol 39 No 1 pp 19-35

Implications forcorporate

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379

directors plusmn lacking sufregcient time information and expertise plusmn have littlechoice but to approve strategic plans

A somewhat different perspective occurs when the report of the NACD BlueRibbon Commission concerning the role of the board in corporate strategy isexamined (NACD 2001) The report identireges a clear need for corporate boardsto be actively involved in the development and approval of an organizationrsquosstrategy and exhorts boards and management to view board participation incorporate strategy as a cooperative and not as an adversarial process Thereport also reinforces the importance of a boardrsquos long-standing and historicalstrength with respect to strategy (ie probing questioning and constructivelychallenging and criticizing organizational strategy)

The report unfortunately though is confusing and contradictory in terms ofits regnal stance regarding the degree of board involvement in strategy As aresult it is unclear whether boards should help develop their organizationrsquosmission or not (ie the NACD (2001) report in one section on page 4 says thatthey should not develop strategy and then in another section on page 8 arguesthat the board should assess discuss amend and urge corrections withmanagement) While the report emphasizes the need for boards to beconstructively involved in strategy there is little elaboration concerning whatthe authors of the report exactly meant by this term

A variation of this was also seen to occur recently when a Canadian taskforce on corporate governance recommended that the Toronto Stock Exchange(TSX) amend its guidelines to make clear that the boardrsquos responsibility goesbeyond the adoption of a strategic planning process (Joint Committee onCorporate Governance 2001) The report recommended that the board shouldbe responsible for contributing to the development of strategic direction andapproving a strategic plan that takes into account an identiregcation of businessopportunities and business risks (TSX 2002) In doing so the task forceauthors appear to side clearly with those who argue that the board has aderegnitive role in shaping an organizationrsquos mission However the regulatorsseem to have heard only half the message In April 2002 the TSX announcedthat the role of the board in adopting a strategic planning process would beexpanded to include only the approval of a strategic plan plusmn thereby once againrestricting the boardrsquos involvement in strategy making and direction setting toapproval but not development (TSX 2002) A quick review of variousinternational corporate governance codes only adds further confusion to thisstate of affairs beyond what is evident in Canada

Thus when it comes to the development of an organizationrsquos missionstatement there is presently no deregnitive answer plusmn and no widespreadacceptance plusmn regarding the division of responsibilities between the board andthe senior management We contend though that a major factor contributingto this situation is that all of the reports (including those not reviewed here) arenot based on any solid research Instead the regndingsrecommendations

Implications forcorporate

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365

contained in the various documents are in reality just a compilation ofopinions While those opinions may come from experienced corporate directorsand recognized thought leaders they are still just opinions and not factsReferences to empirical studies of board best practices (ie strategyformulation evaluation and monitoring) are virtually non-existent It is alsonot apparent that the various reports cited had commissioned any speciregcresearch studies to investigate verify and support their resultantrecommendations Accordingly this study endeavours to correct thissituation by focusing on a set of very speciregc research questions

Interestingly a recent presentation of some preliminary regndings by one ofthis paperrsquos co-authors suggested that a speciregc and deregnitive answer to thequestion of board involvement with mission exists (Bart 2003b) Howeverbecause those regndings were deemed provisional we decided to strengthen theoriginal analysis with more high-powered analytical techniques in order to givethe initial conclusions more weight Along the way signiregcant new insightswere gained

Research questionsNumerous questions regarding boards and their mission statements remainunanswered For instance to what extent are boards even aware of theirorganizationrsquos mission statement This question is important because ifresponsibility for mission belongs exclusively to senior management plusmn or ifdirectors do not see such responsibility as falling within their speciregc role set then one might expect to regnd little or no awareness of it on the part of the boardand hence little interest on their part in its development or content

Nevertheless even if the boards are aware of their organizationrsquos missionthey still may or may not feel that their participation in its development iswarranted Of course an important consideration in determining the board bestpractices vis-aAacute -vis mission statements concerns whether or not board awarenessandor involvement with the mission has any impact on the organization As theearlier discussion demonstrated there is very little guidance as to what is thecorrect posture that directors should adopt on these matters

In order to help boards better understand their roles in relation to theirorganizationrsquos mission statement a research project was designed whichsought to explore the relationship between the selected characteristics of boardand senior management awarenessinvolvement with their missions andselected performance-related outcome measures The speciregc questionsaddressed by this research were as follows

(1) To what extent are boards aware of their organizationrsquos mission

(2) To what extent are boards involved in the creation of their organizationrsquosmission

(3) How does board awarenessinvolvement compare with that of seniormanagement

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366

(4) Does the level of awarenessinvolvement with respect to the missionmatter in terms of enhancing the organizationrsquos intellectual capital andperformance

(5) What contributes most to the awareness of the mission

Method and measuresSample selection and sizeSurveys were delivered to the top manager (ie CEO President ExecutiveDirector Board Chairman) of 1000 North American organizations randomlyselected from the Fortune 1000 (USA) and Financial Post 500 (Canada) Asinformants senior management is most able to recognize the relativeimportance of organizational issues whether they are performance or strategyrelated (Glick et al 1990) The top manager was asked to complete the surveyor to delegate the task to someone knowledgeable with the organizationrsquosmission statement and its development A total of 339 completedquestionnaires were returned representing a response rate of 339 percentThe method of sample selection however restricts the claims which can bemade about the representativeness of the regndings as they do not appear toapply to organizations of all sizes cultures and sectors The regndings andconclusions in this study appear to have validity only in so far as larger-scaleEnglish-speaking North American organizations are concerned and this factshould be noted when considering the studyrsquos general applicability Descriptivestatistics of the respondent sample closely mirror that of the population fromwhich the sample was derived

Respondent title and response bias Of the responses received 372 percentwere from a top manager (ie CEO or Board Chairman) while the remainderwere senior level executives or managers (ie Senior Executives 266 percentSenior Managers 363 percent) A one-way ANOVA for each of the respondenttypes was examined against three important dependent variables (Figure 2)

(1) What is your overall satisfaction with the organizationrsquos regnancialperformance (Scale from 0 = very dissatisreged to 9 = very satisreged)

(2) Are individuals in the organization committed to the mission statement(Scale from 0 = not at all to 9 = to the greatest possible extent)

(3) How innovative is your organization (Scale from 0 = not all innovativeto 9 = extremely innovative)

Results of the one-way ANOVA show that there is no statistically signiregcantdifference in dependent variable outcomes based on respondent-type therebyyielding no evidence of response-bias in this study (F-stat = 533 743 1013p 0001)

Operationalizing mission awareness and involvement Respondents wereasked to rate separately the extent to which the board and senior managementwere aware of their organizationrsquos mission statement using a four-point scale(1 = not aware at all 2 = somewhat aware 3 = moderately aware 4 = highly

Implications forcorporate

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367

aware) Managers were then asked (again using a four-point scale) to indicatethe degree to which they were involved in developing their organizationrsquosmission statement (1 = no involvement at all 2 = somewhat involved3 = moderately involved 4 = highly involved)

Figure 3 shows that the awareness of mission statements and theinvolvement in developing them differed between senior management andboard members On average board members scored lower than theirmanagement counterparts in both awareness (348 vs 366) and involvement

Figure 2ANOVA test forresponse bias

Figure 3Awareness andinvolvement by boardand senior management

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(298 vs 374) However in absolute terms awareness and involvement with themission by board members and senior managers appears to be fairly high

Mission communication technique usage There were a variety of missioncommunication techniques that were measured in this study (see Figure 4) Onaverage the use of annual reports and employee manuals was the mostprominent communication method in use at 676 and 635 percent respectivelyAlternatively only 273 percent of respondents used advertisements tocommunicate their mission statements

Outcome measuresThree outcome measures were used in order to assess the effect of board andsenior management awareness and involvement with the mission

(1) the extent to which members throughout the organization areemotionally committed to the mission statement (Bart 1998a Bart andTabone 1999 Bart et al 2001)

(2) the extent to which respondents were satisreged with the regnancialperformance of their organization (Bart 1997b 1998a Bart and Baetz1998 Bart and Tabone 1999) and

(3) the extent of perceived innovativeness of the organization

Respondents were asked to rate each of these outcome measures on a ten-pointscale (ie 0 = not at all 9 = to the greatest possible extent)

Bontis and his colleagues (Bontis and Fitz-enz 2002 Bontis and Girardi2000 Bontis and Nikitopoulos 2001 Bontis et al 1999 2000 Choo and Bontis2002 OrsquoRegan et al 2001 Stovel and Bontis 2002) have shown that

Figure 4Techniques to

communicate missionstatement

Implications forcorporate

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369

organizational commitment is a critical antecedent to intellectual capitaldevelopment and performance outcomes Furthermore Bontis (1998) andBontis et al (2002) have shown in intellectual capital studies that perceivedmeasures of performance can be a reasonable substitute for objective measuresof performance (Dess and Robinson 1984) and have a signiregcant correlationwith objective measures of regnancial performance (Lyles and Salk 1997Venkatraman and Ramnujam 1987) Accordingly the interpretation of theresults from this study is that respondents were on average ordfmoderatelysatisregedordm with membersrsquo commitment to the mission statement (mean = 594)regnancial performance (mean = 586) and organizational innovativeness(mean = 587)

It is also important to note that a control variable was used to limitunnecessary variability of the endogenous constructs For this study eachorganization was asked to provide the year in which the organization regrstdeveloped a recorded mission statement That year was converted to the age(ie age = 2002 2 year) of the mission statement process since inception Theaverage year of inception of the mission process for the regrms in this study was1989 (or 13 years) This was required so that variability in performance couldnot be attributable solely to mission experience

Partial least squares modelHulland (1999) has noted that the use of partial least squares (PLS) as astructural equation modeling technique has received increased interest in thestrategic management literature in areas such as intellectual capitalmanagement (Bontis 1998 2003b Bontis et al 2000 2002) and missionstatements (Bart et al 2001) According to Hulland (1999 pp 202-3) this isbecause ordfcausal models such as PLS can help strategic managementresearchers to achieve new insights As the regeld of strategic managementcontinues to mature researchers need to increasingly rise to the challengeordmPLS also allows researchers to develop a systematic and holistic view whenestablishing measures to solve research problems For large-sample modelingLISREL (Bollen 1990 Joreskog and Sorbom 1984) has several relativestrengths whereas for small-sample predictive research PLS (Fornell andBookstein 1982 Hulland 1999) is more appropriate

In general the most complex models will involve

(1) the number of indicators on the most complex formative construct or

(2) the largest number of antecedent constructs leading to an endogenousconstruct

Sample size requirements become at least ten times the number of predictorsfrom (1) or (2) whichever is greater (Barclay et al 1995) In this case there are atotal of nine formative indicators on the most complex construct which iscommunication technique (ie advertisement annual reports etc) and a total

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of six antecedent constructs leading to the endogenous construct Thereforethe minimum sample requirements become 9 3 10 or 90 PLS is an adequatetechnique for this study since the sample size is 339 respondents All of theitems germane to this study were therefore assigned to their respective scalesusing PLS as suggested by Barclay et al (1995) and Hulland (1999)

Reliability and validityThe survey items and constructs were subjected to various psychometricevaluations to conregrm reliability and validity A Cronbach alpharsquos (a) measurewas used to test the reliability of the communication technique construct whichcontained nine items The alpha (a) value of 0839 is above the minimumthreshold of 07 as supported by Nunnally (1978) Shimp and Sharma (1987)suggest that items have loading values greater than 07 to ensure constructvalidity This procedure is also supported by Carmines and Zeller (1979) andHulland (1999) In this case only three of the nine items had loading valuesgreater than 07 and were therefore removed prior to the subsequent modellingexercise

Interestingly the three remaining communication techniques that were bothreliable and valid were not necessarily those most often used by therespondents Company information kits (l = 0732) newsletters (l = 0732)and internal documents (l = 0702) were used only by 596 531 and 574percent of respondents Conversely the most often used communicationtechnique of annual reports was used by two-thirds (676 percent) of therespondents Yet its construct validity (l = 0598) was below the thresholddenoting a suspiciously absent nomological connection to the board andmanagement awareness of mission statements (see Figure 5)

Similarly a latent performance construct was created using two of theoutcome measures identireged earlier plusmn both of which were found to be bothvalid and reliable The regrst item was overall satisfaction with the regnancial

Figure 5Construct validity and

reliability ofcommunication

technique

Implications forcorporate

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371

performance of the organization (l = 0837) and the second item was howinnovative the organization was (l = 0874)

Research limitationsWith respect to the present results a number of caveats pertaining to commonmethod single-respondent and social desirability biases should beacknowledged To address the possibility of common method bias aHermanrsquos one-factor test on the questionnaire measurement items wasconducted (Konrad and Linnehan 1995 Scott and Bruce 1994) A principalcomponents factor analysis yielded four factors with eigenvalues greater than10 that accounted for 51 percent of the variance Since several factors asopposed to one single factor were identireged and since the regrst factor did notaccount for the majority of the variance (only 29 percent) a substantial amountof common method variance does not appear to be present (Podsakoff andOrgan 1986) Nevertheless the presence of common method problems cannotbe fully discarded

An important methodological imperative for this study was for eachrespondent to be highly familiar with the mission statement and its resultantorganizational effect In this respect the study was considered satisfactorysince the majority of respondents were top executives in their respectiveorganizations Given the singularity and specialized knowledge associatedwith these informants a single-informant approach was deemed best and wastherefore used We believed that less knowledgeable informants would result inless accurate data

Whereas survey data are sometimes subject to social desirability bias(Arnold and Feldman 1981 Podsakoff and Organ 1986) we do not perceivesuch bias to be a major concern for this study The topic of investigationalthough strategic was not thought to be so highly sensitive as to be likely toprevent responses that would present the respondent or organization in anunfavourable light In addition much of the information obtained was notdeemed highly conregdential However the occurrence of such bias cannot betotally ruled out

ResultsFigure 6 shows the regnal specireged PLS structural equation model Each pathand beta coefregcient displayed are both substantive and signiregcant Theexplanatory power of the model is relatively high for survey research at 334percent and denotes a strong conregdence in the explanation of performancevariance attributable to mission communication involvement awareness andcommitment (see Figure 6)

Missions communication technique and awareness (b1 and b2)The beta path (b1) coefregcient from communication technique to boardawareness is 0362 while the beta path (b2) from communication technique to

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management awareness is 0294 These results support the notion that theselected mission communication techniques aid in raising awareness of themission statement for both the board members and senior managementFurthermore the magnitude of this impact is relatively higher for boards Thecommunication technique construct however was not found to have any directimpact on the measure for member commitment to the mission

Involvement and awareness (b3 b4 and b5)The beta path (b3) coefregcient from board involvement to board awareness is0441 while the beta path (b4) from board involvement to managementawareness is 0128 These results support the notion that involvement with themission development process by the board is important in raising the boardrsquosawareness of the mission statement Similarly when the board is involved indeveloping their organizationrsquos mission it positively impacts managementrsquoscontinuing and current awareness of the mission plusmn though this latterrelationship is signiregcantly weaker

In contrast the beta path (b5) coefregcient from management involvement tomanagement awareness was found to be just 0158 while the beta path frommanagement involvement to board awareness was neither substantive norsigniregcant Therefore while managementrsquos involvement in the missiondevelopment process appears to encourage their continuing awareness of themission it does not appear to have any effect on the boardrsquos current awareness

Figure 6PLS structural

equation model

Implications forcorporate

governance

373

Antecedents to commitment (b6 b7 and b8)The beta path (b6) coefregcient from management involvement in missiondevelopment to membersrsquo commitment to the mission was established to be0139 while a beta path from either board involvement to commitment ormanagement involvement to board awareness did not exist What this suggestsis that while the commitment of an organizationrsquos members to the missionstatement can be directly supported by the managementrsquos involvement in themission development process the boardrsquos involvement acts as an antecedent tocommitment only indirectly and only through the process of raising its ownawareness (b3 and b4) Following that there are substantive and signiregcantpaths from both board awareness (b7 = 0150) and management awareness(b8 = 0173) to membersrsquo commitment to the mission

Commitment to performance (b9)The beta path (b9) coefregcient from individualsrsquo commitment to the missionstatement and performance was 0583 This is not at all surprising since itreplicates the regndings of a previous study by Bart et al (2001) But the regndingscontinue to underscore the tremendous impact and important role that membercommitment to the mission continues to have and to play respectively in termsof enhancing an organizationrsquos performance

DiscussionThere are a number of important and signiregcant regndings which havematerialized from the current study

Boardsrsquo awareness of their organizationrsquos missionThe regndings from Figure 3 suggest that directors and their boards appear to berelatively aware of their organizationrsquos mission plusmn though it was somewhatlower than managementrsquos Only a small percentage of respondents indicatedthat their board was ordfsomewhat awareordm of the mission and very few stated thatthere was no awareness at all Nevertheless for the most part there were still alarge number of directors who were not highly or fully aware of theirorganizationrsquos mission Therefore the question remains should they be In thisregard path analysis results are unequivocal Continuing board awareness ofthe mission plusmn whereby directors ordfknow understand and remember themissionordm plusmn is an important and signiregcant contributor to having individualsthroughout the organization commit to it The more aware the boards are oftheir organizationrsquos mission the greater their organizational membersrsquocommitment to it will be Moreover directorsrsquo awareness of the mission isequivalent in impact (with respect to membersrsquo commitment) in terms of bothmanagementrsquos awareness of the mission and managementrsquos involvement withthe missionrsquos development Consequently boards cannot afford to becomplacent when it comes to their organizationsrsquo mission and theircontinuing and current awareness of it

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This is a thought-provoking observation It suggests that the days of boardsbeing entertained every now and then with PowerPoint presentations of thecompany mission while the lobster sandwiches are passed around are overBoards must accept that the mission statement is a valuable and important toolin helping to set the strategic direction and positioning of the organization Itshould be the corner-stone of every organizationrsquos strategic plan Given thisimportance it cannot be given short shrift once it has been developed andintroduced to the organization Because every mission also needs thecontinuing commitment and support of all the organizational members if it is tobe ultimately achieved directors have an ongoing responsibility to keepthemselves aware of it as well

One obvious way in which they can help do this is to make sure that themission statement is a part of each board meeting and a part of every boarddiscussion Directors must refer to their organizationsrsquo mission regularly (notjust in a crisis) and use it to test managementrsquos ability to become and remainfocused Having the mission as part of every ordfboard packageordm would certainlyassist in this regard So would memorizing it in certain circumstancesDirectors also need to be assured that the mission is being achieved and thatthere is accountability for its implementation This in turn suggests that theremust be some sort of mechanism in place to measure the organizationrsquosprogress against the mission When actions such as these are taken directorswill help keep their organizationsrsquo mission alive not just for themselves but forthe rest of the gang as well (Please note though that additional comments onenhancing board awareness are being reserved for the following two sections)

Boardsrsquo involvement in the creation of their organizationrsquos missionThis paper began with the question of whether or not boards should beinvolved in the development of their organizationrsquos mission Unlike theprevious discussion on board awareness the regndings of Figure 3 show thatinvolvement by the board of directors in their organizationrsquos mission creationprocess is generally not a well accepted activity and generated the highestpercentage of responses in the category for ordfnot at allordm Whereas 80 percent ofthe respondents perceived their senior managements to be highly involved indeveloping their organizationsrsquo mission only 47 percent believed this to be thecase for the board Moreover informal conversations with established andsenior directors have suggested that board tradition typically dictates that therole of the board vis-aAacute -vis mission is for ordfmanagement to propose and for theboard to disposeordm The current regndings however would challenge thisviewpoint

Recall that the discussion in the previous section established the pivotal rolethat board awareness of the mission plays in terms of enhancing organizationalcommitment to the mission The results from path analysis in Figure 6however have demonstrated the critical importance of the boardrsquos involvement

Implications forcorporate

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375

in developing the mission if full board awareness of the mission is to beachieved Indeed of all the antecedent measures in the study it was boardinvolvement which obtained the strongest beta (b) score and was the No 1driver of board awareness Moreover the regndings of path analysis show thatwhile managementrsquos continuing awareness of the mission is also an importantconsideration in terms of securing organizational commitment to it thatawareness is produced almost equivalently from both their own plusmn and theboardrsquos plusmn involvement in mission development In other words it takes boththe boardrsquos and senior managementrsquos involvement to generate plusmn within theexecutive ranks plusmn the necessary and continuing knowledge and understanding(ie awareness) required to affect membersrsquo commitment to the missionInterestingly while management involvement by itself was also found to havea direct inmacruence on organizational commitment to the mission boardinvolvement did not Instead the boardrsquos impact on organizational commitmentto the mission is ordffeltordm through their ongoing awareness of it

Now this is a provocative notion since in the eyes of many individualsmanagement typically represents and provides to a greater extent than theboard the pragmatic ongoing and de facto strategic leadership of theorganization Yet the results from the current study would argue that directorsrsquoinvolvement in a missionrsquos development is a constructive activity on the part ofthe board and an important contributor to organizational success Shouldboards be involved in creating their organizationrsquos mission The answer wouldappear to be a deregnitive ordfyesordm

Directors must now see their role in terms of getting involved in thedevelopment of their organizationrsquos mission in order to raise awareness of it forthemselves and for management and raising awareness of the mission forthemselves in order to create and inmacruence higher levels of commitment to itthroughout the organization Consequently the regndings should be seen ashelping to put to rest the current debate concerning the nature and degree ofboard involvement in mission development Boards must get involved and it iswrong for them not to do so The research regndings thus represent for the regrsttime a true ordfbest practiceordm in corporate governance research The currentcorporate governance literature needs to be revised to take these results intoaccount

Mission communication and awarenessWhen the various techniques to communicate the mission were analyzed anumber of interesting observation were made To begin with when the relativeranking of the various communication methods (as shown in Figure 4) wasreviewed it appeared that there was no one technique which appeared to be theoverwhelming favourite The annual report appeared to be the most popular plusmnand perhaps the most obvious plusmn place for ensuring the widest possibledissemination of the mission among the various stakeholder populations After

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all anyone with a serious interest or ordfstakeordm in the organization would be sureto see the mission in this document The employee manual and posters werealso seen as logical choices for communicating the mission to employee groupsHowever no one technique achieved a usage rating greater than 67 percent andmost communication methods could be said to be used only to a moderateextent (mean score range 256-294) plusmn with the exception of advertisementswhich was clearly and indisputably the least favourite technique (mean score184)

It therefore came as somewhat of a surprise that when the communicationconstruct was created only three communication methods were found to bereliable and valid (ie company information kits company newsletters andother internal documents (such as company strategic and operating plansbudgets MBO and bonus criteria) Yet when these results were furtherdissected and contemplated they appeared to make considerable sense Foreffective communication to take place a ordfmessageordm must be sent receivedunderstood and remembered (Bart 2002) Accordingly while annual reportsmay be the most frequently used document for communicating anorganizationrsquos mission they are not the most effective This is because theyare often not read not widely read or not completely read As a result themission message while ordfsentordm is not necessarily received understood orremembered Similarly employee manuals may plusmn and probably should plusmncontain explicit reference to their organizationrsquos mission However how manytimes has anyone as employees ever referred to the mission by quoting it fromthe company manual Probably few if any at all

In contrast the communication techniques which appear to have a lastingand profound impact in terms of taking a mission message beyond its ordfsentpointordm are those which are designed to

create special attention (ie an information kit which is dedicated toexplaining the mission and can be used as a reference guide)

create ongoing attention and deal with short attention spans (egcompany newsletters) and

focus resource allocations (eg strategic and operational plans)

Thus when these documents are used most people pay attention Furthermorepath analysis conregrmed that both the board and management seem to belistening Indeed for the board the communication construct was the secondmost powerful inmacruencer in terms of its positive impact on board awareness ofthe mission Only board involvement with the mission was more importantHowever in terms of managementrsquos awareness results revealed that it was thecommunication construct which had the most profound impact plusmn almostdouble that of any other variables

These regndings are signiregcant They show that in terms of creatingcontinuing awareness on the part of boards with respect to their organizationsrsquo

Implications forcorporate

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377

missions it is necessary to regrst and foremost engage them actively andconstructively in its development Involvement begets awareness To keepthem continually aware various selected communication techniques then needto be deployed But those techniques will be impotent in terms of their effect ifthe board has not regrst made the commitment of time and energy to thedevelopment of the organizationrsquos mission There is no ordfViagraordm cure when thishas not taken place So boards need to understand how the timing andsequence of their awareness are created and sustained Hopefully this researchhelps to establish the proper path to be followed

The observations with respect to management awareness of the mission arealso intriguing As with the case of the board there is no question thatmanagement involvement in developing the mission produces a certain level ofongoing awareness Similarly one would expect that when the board is alsoinvolved it acts as a strong signal to management that the mission is moreimportant than might otherwise be found in organizations where the boardignores it When combined managementrsquos involvement and awareness have atremendous effect on the commitment that organizational members have withrespect to their mission But to sustain managementrsquos interest in the missionand keep their interest in the mission robust the regndings show that it is thecommunication construct plusmn with its three critical communication techniques plusmnwhich has the greatest impact Boards and their managements would do well toensure that these techniques are being regularly deployed if they are seriouslyinterested in making sure that senior executives do not lose sight of the missionor lose enthusiasm for it Relentless repetition of the mission message isprobably still the only way to ensure that the message is remembered plusmn the lastbut essential component of the rules for effective communication (Bart 2002)

ConclusionsIf there is one regnal thought it is this boards need to be more involved indeveloping plusmn and be continuously aware of plusmn their organizationrsquos mission Boardinvolvement matters So too does their awareness For too long there has been alack of clear guidance with respect to the boardrsquos role in mission The extantliterature is contradictory and confusing These results therefore represent asigniregcant and profound milestone for the literature on corporate governanceThe results herein demonstrate and prove ordfbest practiceordm while challengingmany of the assumptions underlying current board practices in this provocativearea Accordingly it is recommended that board involvement with a missionrsquosdevelopment plusmn and continuous awareness of it plusmn need to be both recognizedformally in an organizationrsquos governance structure (eg board charters) andproposed as an amendment to most governance codes currently in force It is alsorecommended that given this new responsibility for mission developmentdirectors need to be sufregciently trained in strategy development so that they canwith management develop a shared view on what the future of the organization

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should be and why it exists However to do so effectively both boards andmanagement need to develop a common language and strategic analysisframework Recent developments at the newly formed Directors College (a jointventure of the DeGroote Business School at McMaster University and theConference Board of Canada (see wwwthedirectorscollegecom)) should helpboards and their managements considerably in this regard

References

Arnold HJ and Feldman DC (1981) ordfSocial desirability response bias in self-report choicesituationsordm Academy of Management Journal Vol 24 pp 377-85

Baetz MC and Bart CK (1996) ordfDeveloping mission statements which workordm Long RangePlanning Vol 29 No 4 pp 524-31

Barclay DW Higgins C and Thompson R (1995) ordfThe partial least squares (PLS) approach tocausal modeling personal computer adaptation and use as illustrationordm TechnologyStudies Vol 2 No 2 pp 285-309

Bart CK (1997a) ordfSex lies and mission statementsordm Business Horizons November-Decemberpp 9-18

Bart CK (1997b) ordfIndustrial regrms and the power of missionordm Industrial MarketingManagement Vol 26 pp 371-83

Bart CK (1997c) ordfMission possibleordm CA Magazine September pp 33-4

Bart CK (1998a) ordfA comparison of mission statements and their rationales in innovative andnon-innovative regrmsordm International Journal of Technology Management Vol 16 No 1-3pp 64-77

Bart CK (1998b) ordfMission mattersordm CA Magazine March pp 31-41

Bart CK (1999a) ordfMaking mission statements countordm CA Magazine March pp 37-47

Bart CK (1999b) ordfAccepting the missionordm CA Magazine August pp 33-4

Bart CK (2000) ordfLasting inspirationordm CA Magazine May pp 49-50

Bart CK (2001a) ordfMeasuring the mission effect in human intellectual capitalordm Journal ofIntellectual Capital Research Vol 2 No 3 pp 320-30

Bart CK (2001b) ordfWhorsquos running the storeordm CA Magazine August pp 22-7

Bart CK (2002) A Tale of Two Employees Corporate Missions Inc Press Hamilton

Bart CK (2003a) ordfInnovation mission statements and learningordm International Journal ofInnovation and Learning forthcoming

Bart CK (2003b) ordfGood governance and intellectual capitalordm paper presented at the 24thMcMaster World Congress on the Management of Intellectual Capital and ElectronicCommerce Hamilton

Bart CK and Baetz MJ (1998) ordfThe relationship between mission statements and regrmperformance an exploratory studyordm Journal of Management Studies Vol 36 No 6pp 823-53

Bart CK and Tabone JC (1999) ordfMission statement content and hospital performance in theCanadian not-for-proregt health-care sectorordm Health Care Management Review Vol 24 No 3pp 18-29

Bart CK Bontis N and Taggar S (2001) ordfA model of mission statements and regrmperformanceordm Management Decision Vol 39 No 1 pp 19-35

Implications forcorporate

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379

contained in the various documents are in reality just a compilation ofopinions While those opinions may come from experienced corporate directorsand recognized thought leaders they are still just opinions and not factsReferences to empirical studies of board best practices (ie strategyformulation evaluation and monitoring) are virtually non-existent It is alsonot apparent that the various reports cited had commissioned any speciregcresearch studies to investigate verify and support their resultantrecommendations Accordingly this study endeavours to correct thissituation by focusing on a set of very speciregc research questions

Interestingly a recent presentation of some preliminary regndings by one ofthis paperrsquos co-authors suggested that a speciregc and deregnitive answer to thequestion of board involvement with mission exists (Bart 2003b) Howeverbecause those regndings were deemed provisional we decided to strengthen theoriginal analysis with more high-powered analytical techniques in order to givethe initial conclusions more weight Along the way signiregcant new insightswere gained

Research questionsNumerous questions regarding boards and their mission statements remainunanswered For instance to what extent are boards even aware of theirorganizationrsquos mission statement This question is important because ifresponsibility for mission belongs exclusively to senior management plusmn or ifdirectors do not see such responsibility as falling within their speciregc role set then one might expect to regnd little or no awareness of it on the part of the boardand hence little interest on their part in its development or content

Nevertheless even if the boards are aware of their organizationrsquos missionthey still may or may not feel that their participation in its development iswarranted Of course an important consideration in determining the board bestpractices vis-aAacute -vis mission statements concerns whether or not board awarenessandor involvement with the mission has any impact on the organization As theearlier discussion demonstrated there is very little guidance as to what is thecorrect posture that directors should adopt on these matters

In order to help boards better understand their roles in relation to theirorganizationrsquos mission statement a research project was designed whichsought to explore the relationship between the selected characteristics of boardand senior management awarenessinvolvement with their missions andselected performance-related outcome measures The speciregc questionsaddressed by this research were as follows

(1) To what extent are boards aware of their organizationrsquos mission

(2) To what extent are boards involved in the creation of their organizationrsquosmission

(3) How does board awarenessinvolvement compare with that of seniormanagement

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366

(4) Does the level of awarenessinvolvement with respect to the missionmatter in terms of enhancing the organizationrsquos intellectual capital andperformance

(5) What contributes most to the awareness of the mission

Method and measuresSample selection and sizeSurveys were delivered to the top manager (ie CEO President ExecutiveDirector Board Chairman) of 1000 North American organizations randomlyselected from the Fortune 1000 (USA) and Financial Post 500 (Canada) Asinformants senior management is most able to recognize the relativeimportance of organizational issues whether they are performance or strategyrelated (Glick et al 1990) The top manager was asked to complete the surveyor to delegate the task to someone knowledgeable with the organizationrsquosmission statement and its development A total of 339 completedquestionnaires were returned representing a response rate of 339 percentThe method of sample selection however restricts the claims which can bemade about the representativeness of the regndings as they do not appear toapply to organizations of all sizes cultures and sectors The regndings andconclusions in this study appear to have validity only in so far as larger-scaleEnglish-speaking North American organizations are concerned and this factshould be noted when considering the studyrsquos general applicability Descriptivestatistics of the respondent sample closely mirror that of the population fromwhich the sample was derived

Respondent title and response bias Of the responses received 372 percentwere from a top manager (ie CEO or Board Chairman) while the remainderwere senior level executives or managers (ie Senior Executives 266 percentSenior Managers 363 percent) A one-way ANOVA for each of the respondenttypes was examined against three important dependent variables (Figure 2)

(1) What is your overall satisfaction with the organizationrsquos regnancialperformance (Scale from 0 = very dissatisreged to 9 = very satisreged)

(2) Are individuals in the organization committed to the mission statement(Scale from 0 = not at all to 9 = to the greatest possible extent)

(3) How innovative is your organization (Scale from 0 = not all innovativeto 9 = extremely innovative)

Results of the one-way ANOVA show that there is no statistically signiregcantdifference in dependent variable outcomes based on respondent-type therebyyielding no evidence of response-bias in this study (F-stat = 533 743 1013p 0001)

Operationalizing mission awareness and involvement Respondents wereasked to rate separately the extent to which the board and senior managementwere aware of their organizationrsquos mission statement using a four-point scale(1 = not aware at all 2 = somewhat aware 3 = moderately aware 4 = highly

Implications forcorporate

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367

aware) Managers were then asked (again using a four-point scale) to indicatethe degree to which they were involved in developing their organizationrsquosmission statement (1 = no involvement at all 2 = somewhat involved3 = moderately involved 4 = highly involved)

Figure 3 shows that the awareness of mission statements and theinvolvement in developing them differed between senior management andboard members On average board members scored lower than theirmanagement counterparts in both awareness (348 vs 366) and involvement

Figure 2ANOVA test forresponse bias

Figure 3Awareness andinvolvement by boardand senior management

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(298 vs 374) However in absolute terms awareness and involvement with themission by board members and senior managers appears to be fairly high

Mission communication technique usage There were a variety of missioncommunication techniques that were measured in this study (see Figure 4) Onaverage the use of annual reports and employee manuals was the mostprominent communication method in use at 676 and 635 percent respectivelyAlternatively only 273 percent of respondents used advertisements tocommunicate their mission statements

Outcome measuresThree outcome measures were used in order to assess the effect of board andsenior management awareness and involvement with the mission

(1) the extent to which members throughout the organization areemotionally committed to the mission statement (Bart 1998a Bart andTabone 1999 Bart et al 2001)

(2) the extent to which respondents were satisreged with the regnancialperformance of their organization (Bart 1997b 1998a Bart and Baetz1998 Bart and Tabone 1999) and

(3) the extent of perceived innovativeness of the organization

Respondents were asked to rate each of these outcome measures on a ten-pointscale (ie 0 = not at all 9 = to the greatest possible extent)

Bontis and his colleagues (Bontis and Fitz-enz 2002 Bontis and Girardi2000 Bontis and Nikitopoulos 2001 Bontis et al 1999 2000 Choo and Bontis2002 OrsquoRegan et al 2001 Stovel and Bontis 2002) have shown that

Figure 4Techniques to

communicate missionstatement

Implications forcorporate

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369

organizational commitment is a critical antecedent to intellectual capitaldevelopment and performance outcomes Furthermore Bontis (1998) andBontis et al (2002) have shown in intellectual capital studies that perceivedmeasures of performance can be a reasonable substitute for objective measuresof performance (Dess and Robinson 1984) and have a signiregcant correlationwith objective measures of regnancial performance (Lyles and Salk 1997Venkatraman and Ramnujam 1987) Accordingly the interpretation of theresults from this study is that respondents were on average ordfmoderatelysatisregedordm with membersrsquo commitment to the mission statement (mean = 594)regnancial performance (mean = 586) and organizational innovativeness(mean = 587)

It is also important to note that a control variable was used to limitunnecessary variability of the endogenous constructs For this study eachorganization was asked to provide the year in which the organization regrstdeveloped a recorded mission statement That year was converted to the age(ie age = 2002 2 year) of the mission statement process since inception Theaverage year of inception of the mission process for the regrms in this study was1989 (or 13 years) This was required so that variability in performance couldnot be attributable solely to mission experience

Partial least squares modelHulland (1999) has noted that the use of partial least squares (PLS) as astructural equation modeling technique has received increased interest in thestrategic management literature in areas such as intellectual capitalmanagement (Bontis 1998 2003b Bontis et al 2000 2002) and missionstatements (Bart et al 2001) According to Hulland (1999 pp 202-3) this isbecause ordfcausal models such as PLS can help strategic managementresearchers to achieve new insights As the regeld of strategic managementcontinues to mature researchers need to increasingly rise to the challengeordmPLS also allows researchers to develop a systematic and holistic view whenestablishing measures to solve research problems For large-sample modelingLISREL (Bollen 1990 Joreskog and Sorbom 1984) has several relativestrengths whereas for small-sample predictive research PLS (Fornell andBookstein 1982 Hulland 1999) is more appropriate

In general the most complex models will involve

(1) the number of indicators on the most complex formative construct or

(2) the largest number of antecedent constructs leading to an endogenousconstruct

Sample size requirements become at least ten times the number of predictorsfrom (1) or (2) whichever is greater (Barclay et al 1995) In this case there are atotal of nine formative indicators on the most complex construct which iscommunication technique (ie advertisement annual reports etc) and a total

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370

of six antecedent constructs leading to the endogenous construct Thereforethe minimum sample requirements become 9 3 10 or 90 PLS is an adequatetechnique for this study since the sample size is 339 respondents All of theitems germane to this study were therefore assigned to their respective scalesusing PLS as suggested by Barclay et al (1995) and Hulland (1999)

Reliability and validityThe survey items and constructs were subjected to various psychometricevaluations to conregrm reliability and validity A Cronbach alpharsquos (a) measurewas used to test the reliability of the communication technique construct whichcontained nine items The alpha (a) value of 0839 is above the minimumthreshold of 07 as supported by Nunnally (1978) Shimp and Sharma (1987)suggest that items have loading values greater than 07 to ensure constructvalidity This procedure is also supported by Carmines and Zeller (1979) andHulland (1999) In this case only three of the nine items had loading valuesgreater than 07 and were therefore removed prior to the subsequent modellingexercise

Interestingly the three remaining communication techniques that were bothreliable and valid were not necessarily those most often used by therespondents Company information kits (l = 0732) newsletters (l = 0732)and internal documents (l = 0702) were used only by 596 531 and 574percent of respondents Conversely the most often used communicationtechnique of annual reports was used by two-thirds (676 percent) of therespondents Yet its construct validity (l = 0598) was below the thresholddenoting a suspiciously absent nomological connection to the board andmanagement awareness of mission statements (see Figure 5)

Similarly a latent performance construct was created using two of theoutcome measures identireged earlier plusmn both of which were found to be bothvalid and reliable The regrst item was overall satisfaction with the regnancial

Figure 5Construct validity and

reliability ofcommunication

technique

Implications forcorporate

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371

performance of the organization (l = 0837) and the second item was howinnovative the organization was (l = 0874)

Research limitationsWith respect to the present results a number of caveats pertaining to commonmethod single-respondent and social desirability biases should beacknowledged To address the possibility of common method bias aHermanrsquos one-factor test on the questionnaire measurement items wasconducted (Konrad and Linnehan 1995 Scott and Bruce 1994) A principalcomponents factor analysis yielded four factors with eigenvalues greater than10 that accounted for 51 percent of the variance Since several factors asopposed to one single factor were identireged and since the regrst factor did notaccount for the majority of the variance (only 29 percent) a substantial amountof common method variance does not appear to be present (Podsakoff andOrgan 1986) Nevertheless the presence of common method problems cannotbe fully discarded

An important methodological imperative for this study was for eachrespondent to be highly familiar with the mission statement and its resultantorganizational effect In this respect the study was considered satisfactorysince the majority of respondents were top executives in their respectiveorganizations Given the singularity and specialized knowledge associatedwith these informants a single-informant approach was deemed best and wastherefore used We believed that less knowledgeable informants would result inless accurate data

Whereas survey data are sometimes subject to social desirability bias(Arnold and Feldman 1981 Podsakoff and Organ 1986) we do not perceivesuch bias to be a major concern for this study The topic of investigationalthough strategic was not thought to be so highly sensitive as to be likely toprevent responses that would present the respondent or organization in anunfavourable light In addition much of the information obtained was notdeemed highly conregdential However the occurrence of such bias cannot betotally ruled out

ResultsFigure 6 shows the regnal specireged PLS structural equation model Each pathand beta coefregcient displayed are both substantive and signiregcant Theexplanatory power of the model is relatively high for survey research at 334percent and denotes a strong conregdence in the explanation of performancevariance attributable to mission communication involvement awareness andcommitment (see Figure 6)

Missions communication technique and awareness (b1 and b2)The beta path (b1) coefregcient from communication technique to boardawareness is 0362 while the beta path (b2) from communication technique to

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management awareness is 0294 These results support the notion that theselected mission communication techniques aid in raising awareness of themission statement for both the board members and senior managementFurthermore the magnitude of this impact is relatively higher for boards Thecommunication technique construct however was not found to have any directimpact on the measure for member commitment to the mission

Involvement and awareness (b3 b4 and b5)The beta path (b3) coefregcient from board involvement to board awareness is0441 while the beta path (b4) from board involvement to managementawareness is 0128 These results support the notion that involvement with themission development process by the board is important in raising the boardrsquosawareness of the mission statement Similarly when the board is involved indeveloping their organizationrsquos mission it positively impacts managementrsquoscontinuing and current awareness of the mission plusmn though this latterrelationship is signiregcantly weaker

In contrast the beta path (b5) coefregcient from management involvement tomanagement awareness was found to be just 0158 while the beta path frommanagement involvement to board awareness was neither substantive norsigniregcant Therefore while managementrsquos involvement in the missiondevelopment process appears to encourage their continuing awareness of themission it does not appear to have any effect on the boardrsquos current awareness

Figure 6PLS structural

equation model

Implications forcorporate

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373

Antecedents to commitment (b6 b7 and b8)The beta path (b6) coefregcient from management involvement in missiondevelopment to membersrsquo commitment to the mission was established to be0139 while a beta path from either board involvement to commitment ormanagement involvement to board awareness did not exist What this suggestsis that while the commitment of an organizationrsquos members to the missionstatement can be directly supported by the managementrsquos involvement in themission development process the boardrsquos involvement acts as an antecedent tocommitment only indirectly and only through the process of raising its ownawareness (b3 and b4) Following that there are substantive and signiregcantpaths from both board awareness (b7 = 0150) and management awareness(b8 = 0173) to membersrsquo commitment to the mission

Commitment to performance (b9)The beta path (b9) coefregcient from individualsrsquo commitment to the missionstatement and performance was 0583 This is not at all surprising since itreplicates the regndings of a previous study by Bart et al (2001) But the regndingscontinue to underscore the tremendous impact and important role that membercommitment to the mission continues to have and to play respectively in termsof enhancing an organizationrsquos performance

DiscussionThere are a number of important and signiregcant regndings which havematerialized from the current study

Boardsrsquo awareness of their organizationrsquos missionThe regndings from Figure 3 suggest that directors and their boards appear to berelatively aware of their organizationrsquos mission plusmn though it was somewhatlower than managementrsquos Only a small percentage of respondents indicatedthat their board was ordfsomewhat awareordm of the mission and very few stated thatthere was no awareness at all Nevertheless for the most part there were still alarge number of directors who were not highly or fully aware of theirorganizationrsquos mission Therefore the question remains should they be In thisregard path analysis results are unequivocal Continuing board awareness ofthe mission plusmn whereby directors ordfknow understand and remember themissionordm plusmn is an important and signiregcant contributor to having individualsthroughout the organization commit to it The more aware the boards are oftheir organizationrsquos mission the greater their organizational membersrsquocommitment to it will be Moreover directorsrsquo awareness of the mission isequivalent in impact (with respect to membersrsquo commitment) in terms of bothmanagementrsquos awareness of the mission and managementrsquos involvement withthe missionrsquos development Consequently boards cannot afford to becomplacent when it comes to their organizationsrsquo mission and theircontinuing and current awareness of it

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This is a thought-provoking observation It suggests that the days of boardsbeing entertained every now and then with PowerPoint presentations of thecompany mission while the lobster sandwiches are passed around are overBoards must accept that the mission statement is a valuable and important toolin helping to set the strategic direction and positioning of the organization Itshould be the corner-stone of every organizationrsquos strategic plan Given thisimportance it cannot be given short shrift once it has been developed andintroduced to the organization Because every mission also needs thecontinuing commitment and support of all the organizational members if it is tobe ultimately achieved directors have an ongoing responsibility to keepthemselves aware of it as well

One obvious way in which they can help do this is to make sure that themission statement is a part of each board meeting and a part of every boarddiscussion Directors must refer to their organizationsrsquo mission regularly (notjust in a crisis) and use it to test managementrsquos ability to become and remainfocused Having the mission as part of every ordfboard packageordm would certainlyassist in this regard So would memorizing it in certain circumstancesDirectors also need to be assured that the mission is being achieved and thatthere is accountability for its implementation This in turn suggests that theremust be some sort of mechanism in place to measure the organizationrsquosprogress against the mission When actions such as these are taken directorswill help keep their organizationsrsquo mission alive not just for themselves but forthe rest of the gang as well (Please note though that additional comments onenhancing board awareness are being reserved for the following two sections)

Boardsrsquo involvement in the creation of their organizationrsquos missionThis paper began with the question of whether or not boards should beinvolved in the development of their organizationrsquos mission Unlike theprevious discussion on board awareness the regndings of Figure 3 show thatinvolvement by the board of directors in their organizationrsquos mission creationprocess is generally not a well accepted activity and generated the highestpercentage of responses in the category for ordfnot at allordm Whereas 80 percent ofthe respondents perceived their senior managements to be highly involved indeveloping their organizationsrsquo mission only 47 percent believed this to be thecase for the board Moreover informal conversations with established andsenior directors have suggested that board tradition typically dictates that therole of the board vis-aAacute -vis mission is for ordfmanagement to propose and for theboard to disposeordm The current regndings however would challenge thisviewpoint

Recall that the discussion in the previous section established the pivotal rolethat board awareness of the mission plays in terms of enhancing organizationalcommitment to the mission The results from path analysis in Figure 6however have demonstrated the critical importance of the boardrsquos involvement

Implications forcorporate

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375

in developing the mission if full board awareness of the mission is to beachieved Indeed of all the antecedent measures in the study it was boardinvolvement which obtained the strongest beta (b) score and was the No 1driver of board awareness Moreover the regndings of path analysis show thatwhile managementrsquos continuing awareness of the mission is also an importantconsideration in terms of securing organizational commitment to it thatawareness is produced almost equivalently from both their own plusmn and theboardrsquos plusmn involvement in mission development In other words it takes boththe boardrsquos and senior managementrsquos involvement to generate plusmn within theexecutive ranks plusmn the necessary and continuing knowledge and understanding(ie awareness) required to affect membersrsquo commitment to the missionInterestingly while management involvement by itself was also found to havea direct inmacruence on organizational commitment to the mission boardinvolvement did not Instead the boardrsquos impact on organizational commitmentto the mission is ordffeltordm through their ongoing awareness of it

Now this is a provocative notion since in the eyes of many individualsmanagement typically represents and provides to a greater extent than theboard the pragmatic ongoing and de facto strategic leadership of theorganization Yet the results from the current study would argue that directorsrsquoinvolvement in a missionrsquos development is a constructive activity on the part ofthe board and an important contributor to organizational success Shouldboards be involved in creating their organizationrsquos mission The answer wouldappear to be a deregnitive ordfyesordm

Directors must now see their role in terms of getting involved in thedevelopment of their organizationrsquos mission in order to raise awareness of it forthemselves and for management and raising awareness of the mission forthemselves in order to create and inmacruence higher levels of commitment to itthroughout the organization Consequently the regndings should be seen ashelping to put to rest the current debate concerning the nature and degree ofboard involvement in mission development Boards must get involved and it iswrong for them not to do so The research regndings thus represent for the regrsttime a true ordfbest practiceordm in corporate governance research The currentcorporate governance literature needs to be revised to take these results intoaccount

Mission communication and awarenessWhen the various techniques to communicate the mission were analyzed anumber of interesting observation were made To begin with when the relativeranking of the various communication methods (as shown in Figure 4) wasreviewed it appeared that there was no one technique which appeared to be theoverwhelming favourite The annual report appeared to be the most popular plusmnand perhaps the most obvious plusmn place for ensuring the widest possibledissemination of the mission among the various stakeholder populations After

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376

all anyone with a serious interest or ordfstakeordm in the organization would be sureto see the mission in this document The employee manual and posters werealso seen as logical choices for communicating the mission to employee groupsHowever no one technique achieved a usage rating greater than 67 percent andmost communication methods could be said to be used only to a moderateextent (mean score range 256-294) plusmn with the exception of advertisementswhich was clearly and indisputably the least favourite technique (mean score184)

It therefore came as somewhat of a surprise that when the communicationconstruct was created only three communication methods were found to bereliable and valid (ie company information kits company newsletters andother internal documents (such as company strategic and operating plansbudgets MBO and bonus criteria) Yet when these results were furtherdissected and contemplated they appeared to make considerable sense Foreffective communication to take place a ordfmessageordm must be sent receivedunderstood and remembered (Bart 2002) Accordingly while annual reportsmay be the most frequently used document for communicating anorganizationrsquos mission they are not the most effective This is because theyare often not read not widely read or not completely read As a result themission message while ordfsentordm is not necessarily received understood orremembered Similarly employee manuals may plusmn and probably should plusmncontain explicit reference to their organizationrsquos mission However how manytimes has anyone as employees ever referred to the mission by quoting it fromthe company manual Probably few if any at all

In contrast the communication techniques which appear to have a lastingand profound impact in terms of taking a mission message beyond its ordfsentpointordm are those which are designed to

create special attention (ie an information kit which is dedicated toexplaining the mission and can be used as a reference guide)

create ongoing attention and deal with short attention spans (egcompany newsletters) and

focus resource allocations (eg strategic and operational plans)

Thus when these documents are used most people pay attention Furthermorepath analysis conregrmed that both the board and management seem to belistening Indeed for the board the communication construct was the secondmost powerful inmacruencer in terms of its positive impact on board awareness ofthe mission Only board involvement with the mission was more importantHowever in terms of managementrsquos awareness results revealed that it was thecommunication construct which had the most profound impact plusmn almostdouble that of any other variables

These regndings are signiregcant They show that in terms of creatingcontinuing awareness on the part of boards with respect to their organizationsrsquo

Implications forcorporate

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377

missions it is necessary to regrst and foremost engage them actively andconstructively in its development Involvement begets awareness To keepthem continually aware various selected communication techniques then needto be deployed But those techniques will be impotent in terms of their effect ifthe board has not regrst made the commitment of time and energy to thedevelopment of the organizationrsquos mission There is no ordfViagraordm cure when thishas not taken place So boards need to understand how the timing andsequence of their awareness are created and sustained Hopefully this researchhelps to establish the proper path to be followed

The observations with respect to management awareness of the mission arealso intriguing As with the case of the board there is no question thatmanagement involvement in developing the mission produces a certain level ofongoing awareness Similarly one would expect that when the board is alsoinvolved it acts as a strong signal to management that the mission is moreimportant than might otherwise be found in organizations where the boardignores it When combined managementrsquos involvement and awareness have atremendous effect on the commitment that organizational members have withrespect to their mission But to sustain managementrsquos interest in the missionand keep their interest in the mission robust the regndings show that it is thecommunication construct plusmn with its three critical communication techniques plusmnwhich has the greatest impact Boards and their managements would do well toensure that these techniques are being regularly deployed if they are seriouslyinterested in making sure that senior executives do not lose sight of the missionor lose enthusiasm for it Relentless repetition of the mission message isprobably still the only way to ensure that the message is remembered plusmn the lastbut essential component of the rules for effective communication (Bart 2002)

ConclusionsIf there is one regnal thought it is this boards need to be more involved indeveloping plusmn and be continuously aware of plusmn their organizationrsquos mission Boardinvolvement matters So too does their awareness For too long there has been alack of clear guidance with respect to the boardrsquos role in mission The extantliterature is contradictory and confusing These results therefore represent asigniregcant and profound milestone for the literature on corporate governanceThe results herein demonstrate and prove ordfbest practiceordm while challengingmany of the assumptions underlying current board practices in this provocativearea Accordingly it is recommended that board involvement with a missionrsquosdevelopment plusmn and continuous awareness of it plusmn need to be both recognizedformally in an organizationrsquos governance structure (eg board charters) andproposed as an amendment to most governance codes currently in force It is alsorecommended that given this new responsibility for mission developmentdirectors need to be sufregciently trained in strategy development so that they canwith management develop a shared view on what the future of the organization

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should be and why it exists However to do so effectively both boards andmanagement need to develop a common language and strategic analysisframework Recent developments at the newly formed Directors College (a jointventure of the DeGroote Business School at McMaster University and theConference Board of Canada (see wwwthedirectorscollegecom)) should helpboards and their managements considerably in this regard

References

Arnold HJ and Feldman DC (1981) ordfSocial desirability response bias in self-report choicesituationsordm Academy of Management Journal Vol 24 pp 377-85

Baetz MC and Bart CK (1996) ordfDeveloping mission statements which workordm Long RangePlanning Vol 29 No 4 pp 524-31

Barclay DW Higgins C and Thompson R (1995) ordfThe partial least squares (PLS) approach tocausal modeling personal computer adaptation and use as illustrationordm TechnologyStudies Vol 2 No 2 pp 285-309

Bart CK (1997a) ordfSex lies and mission statementsordm Business Horizons November-Decemberpp 9-18

Bart CK (1997b) ordfIndustrial regrms and the power of missionordm Industrial MarketingManagement Vol 26 pp 371-83

Bart CK (1997c) ordfMission possibleordm CA Magazine September pp 33-4

Bart CK (1998a) ordfA comparison of mission statements and their rationales in innovative andnon-innovative regrmsordm International Journal of Technology Management Vol 16 No 1-3pp 64-77

Bart CK (1998b) ordfMission mattersordm CA Magazine March pp 31-41

Bart CK (1999a) ordfMaking mission statements countordm CA Magazine March pp 37-47

Bart CK (1999b) ordfAccepting the missionordm CA Magazine August pp 33-4

Bart CK (2000) ordfLasting inspirationordm CA Magazine May pp 49-50

Bart CK (2001a) ordfMeasuring the mission effect in human intellectual capitalordm Journal ofIntellectual Capital Research Vol 2 No 3 pp 320-30

Bart CK (2001b) ordfWhorsquos running the storeordm CA Magazine August pp 22-7

Bart CK (2002) A Tale of Two Employees Corporate Missions Inc Press Hamilton

Bart CK (2003a) ordfInnovation mission statements and learningordm International Journal ofInnovation and Learning forthcoming

Bart CK (2003b) ordfGood governance and intellectual capitalordm paper presented at the 24thMcMaster World Congress on the Management of Intellectual Capital and ElectronicCommerce Hamilton

Bart CK and Baetz MJ (1998) ordfThe relationship between mission statements and regrmperformance an exploratory studyordm Journal of Management Studies Vol 36 No 6pp 823-53

Bart CK and Tabone JC (1999) ordfMission statement content and hospital performance in theCanadian not-for-proregt health-care sectorordm Health Care Management Review Vol 24 No 3pp 18-29

Bart CK Bontis N and Taggar S (2001) ordfA model of mission statements and regrmperformanceordm Management Decision Vol 39 No 1 pp 19-35

Implications forcorporate

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379

(4) Does the level of awarenessinvolvement with respect to the missionmatter in terms of enhancing the organizationrsquos intellectual capital andperformance

(5) What contributes most to the awareness of the mission

Method and measuresSample selection and sizeSurveys were delivered to the top manager (ie CEO President ExecutiveDirector Board Chairman) of 1000 North American organizations randomlyselected from the Fortune 1000 (USA) and Financial Post 500 (Canada) Asinformants senior management is most able to recognize the relativeimportance of organizational issues whether they are performance or strategyrelated (Glick et al 1990) The top manager was asked to complete the surveyor to delegate the task to someone knowledgeable with the organizationrsquosmission statement and its development A total of 339 completedquestionnaires were returned representing a response rate of 339 percentThe method of sample selection however restricts the claims which can bemade about the representativeness of the regndings as they do not appear toapply to organizations of all sizes cultures and sectors The regndings andconclusions in this study appear to have validity only in so far as larger-scaleEnglish-speaking North American organizations are concerned and this factshould be noted when considering the studyrsquos general applicability Descriptivestatistics of the respondent sample closely mirror that of the population fromwhich the sample was derived

Respondent title and response bias Of the responses received 372 percentwere from a top manager (ie CEO or Board Chairman) while the remainderwere senior level executives or managers (ie Senior Executives 266 percentSenior Managers 363 percent) A one-way ANOVA for each of the respondenttypes was examined against three important dependent variables (Figure 2)

(1) What is your overall satisfaction with the organizationrsquos regnancialperformance (Scale from 0 = very dissatisreged to 9 = very satisreged)

(2) Are individuals in the organization committed to the mission statement(Scale from 0 = not at all to 9 = to the greatest possible extent)

(3) How innovative is your organization (Scale from 0 = not all innovativeto 9 = extremely innovative)

Results of the one-way ANOVA show that there is no statistically signiregcantdifference in dependent variable outcomes based on respondent-type therebyyielding no evidence of response-bias in this study (F-stat = 533 743 1013p 0001)

Operationalizing mission awareness and involvement Respondents wereasked to rate separately the extent to which the board and senior managementwere aware of their organizationrsquos mission statement using a four-point scale(1 = not aware at all 2 = somewhat aware 3 = moderately aware 4 = highly

Implications forcorporate

governance

367

aware) Managers were then asked (again using a four-point scale) to indicatethe degree to which they were involved in developing their organizationrsquosmission statement (1 = no involvement at all 2 = somewhat involved3 = moderately involved 4 = highly involved)

Figure 3 shows that the awareness of mission statements and theinvolvement in developing them differed between senior management andboard members On average board members scored lower than theirmanagement counterparts in both awareness (348 vs 366) and involvement

Figure 2ANOVA test forresponse bias

Figure 3Awareness andinvolvement by boardand senior management

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(298 vs 374) However in absolute terms awareness and involvement with themission by board members and senior managers appears to be fairly high

Mission communication technique usage There were a variety of missioncommunication techniques that were measured in this study (see Figure 4) Onaverage the use of annual reports and employee manuals was the mostprominent communication method in use at 676 and 635 percent respectivelyAlternatively only 273 percent of respondents used advertisements tocommunicate their mission statements

Outcome measuresThree outcome measures were used in order to assess the effect of board andsenior management awareness and involvement with the mission

(1) the extent to which members throughout the organization areemotionally committed to the mission statement (Bart 1998a Bart andTabone 1999 Bart et al 2001)

(2) the extent to which respondents were satisreged with the regnancialperformance of their organization (Bart 1997b 1998a Bart and Baetz1998 Bart and Tabone 1999) and

(3) the extent of perceived innovativeness of the organization

Respondents were asked to rate each of these outcome measures on a ten-pointscale (ie 0 = not at all 9 = to the greatest possible extent)

Bontis and his colleagues (Bontis and Fitz-enz 2002 Bontis and Girardi2000 Bontis and Nikitopoulos 2001 Bontis et al 1999 2000 Choo and Bontis2002 OrsquoRegan et al 2001 Stovel and Bontis 2002) have shown that

Figure 4Techniques to

communicate missionstatement

Implications forcorporate

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369

organizational commitment is a critical antecedent to intellectual capitaldevelopment and performance outcomes Furthermore Bontis (1998) andBontis et al (2002) have shown in intellectual capital studies that perceivedmeasures of performance can be a reasonable substitute for objective measuresof performance (Dess and Robinson 1984) and have a signiregcant correlationwith objective measures of regnancial performance (Lyles and Salk 1997Venkatraman and Ramnujam 1987) Accordingly the interpretation of theresults from this study is that respondents were on average ordfmoderatelysatisregedordm with membersrsquo commitment to the mission statement (mean = 594)regnancial performance (mean = 586) and organizational innovativeness(mean = 587)

It is also important to note that a control variable was used to limitunnecessary variability of the endogenous constructs For this study eachorganization was asked to provide the year in which the organization regrstdeveloped a recorded mission statement That year was converted to the age(ie age = 2002 2 year) of the mission statement process since inception Theaverage year of inception of the mission process for the regrms in this study was1989 (or 13 years) This was required so that variability in performance couldnot be attributable solely to mission experience

Partial least squares modelHulland (1999) has noted that the use of partial least squares (PLS) as astructural equation modeling technique has received increased interest in thestrategic management literature in areas such as intellectual capitalmanagement (Bontis 1998 2003b Bontis et al 2000 2002) and missionstatements (Bart et al 2001) According to Hulland (1999 pp 202-3) this isbecause ordfcausal models such as PLS can help strategic managementresearchers to achieve new insights As the regeld of strategic managementcontinues to mature researchers need to increasingly rise to the challengeordmPLS also allows researchers to develop a systematic and holistic view whenestablishing measures to solve research problems For large-sample modelingLISREL (Bollen 1990 Joreskog and Sorbom 1984) has several relativestrengths whereas for small-sample predictive research PLS (Fornell andBookstein 1982 Hulland 1999) is more appropriate

In general the most complex models will involve

(1) the number of indicators on the most complex formative construct or

(2) the largest number of antecedent constructs leading to an endogenousconstruct

Sample size requirements become at least ten times the number of predictorsfrom (1) or (2) whichever is greater (Barclay et al 1995) In this case there are atotal of nine formative indicators on the most complex construct which iscommunication technique (ie advertisement annual reports etc) and a total

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370

of six antecedent constructs leading to the endogenous construct Thereforethe minimum sample requirements become 9 3 10 or 90 PLS is an adequatetechnique for this study since the sample size is 339 respondents All of theitems germane to this study were therefore assigned to their respective scalesusing PLS as suggested by Barclay et al (1995) and Hulland (1999)

Reliability and validityThe survey items and constructs were subjected to various psychometricevaluations to conregrm reliability and validity A Cronbach alpharsquos (a) measurewas used to test the reliability of the communication technique construct whichcontained nine items The alpha (a) value of 0839 is above the minimumthreshold of 07 as supported by Nunnally (1978) Shimp and Sharma (1987)suggest that items have loading values greater than 07 to ensure constructvalidity This procedure is also supported by Carmines and Zeller (1979) andHulland (1999) In this case only three of the nine items had loading valuesgreater than 07 and were therefore removed prior to the subsequent modellingexercise

Interestingly the three remaining communication techniques that were bothreliable and valid were not necessarily those most often used by therespondents Company information kits (l = 0732) newsletters (l = 0732)and internal documents (l = 0702) were used only by 596 531 and 574percent of respondents Conversely the most often used communicationtechnique of annual reports was used by two-thirds (676 percent) of therespondents Yet its construct validity (l = 0598) was below the thresholddenoting a suspiciously absent nomological connection to the board andmanagement awareness of mission statements (see Figure 5)

Similarly a latent performance construct was created using two of theoutcome measures identireged earlier plusmn both of which were found to be bothvalid and reliable The regrst item was overall satisfaction with the regnancial

Figure 5Construct validity and

reliability ofcommunication

technique

Implications forcorporate

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371

performance of the organization (l = 0837) and the second item was howinnovative the organization was (l = 0874)

Research limitationsWith respect to the present results a number of caveats pertaining to commonmethod single-respondent and social desirability biases should beacknowledged To address the possibility of common method bias aHermanrsquos one-factor test on the questionnaire measurement items wasconducted (Konrad and Linnehan 1995 Scott and Bruce 1994) A principalcomponents factor analysis yielded four factors with eigenvalues greater than10 that accounted for 51 percent of the variance Since several factors asopposed to one single factor were identireged and since the regrst factor did notaccount for the majority of the variance (only 29 percent) a substantial amountof common method variance does not appear to be present (Podsakoff andOrgan 1986) Nevertheless the presence of common method problems cannotbe fully discarded

An important methodological imperative for this study was for eachrespondent to be highly familiar with the mission statement and its resultantorganizational effect In this respect the study was considered satisfactorysince the majority of respondents were top executives in their respectiveorganizations Given the singularity and specialized knowledge associatedwith these informants a single-informant approach was deemed best and wastherefore used We believed that less knowledgeable informants would result inless accurate data

Whereas survey data are sometimes subject to social desirability bias(Arnold and Feldman 1981 Podsakoff and Organ 1986) we do not perceivesuch bias to be a major concern for this study The topic of investigationalthough strategic was not thought to be so highly sensitive as to be likely toprevent responses that would present the respondent or organization in anunfavourable light In addition much of the information obtained was notdeemed highly conregdential However the occurrence of such bias cannot betotally ruled out

ResultsFigure 6 shows the regnal specireged PLS structural equation model Each pathand beta coefregcient displayed are both substantive and signiregcant Theexplanatory power of the model is relatively high for survey research at 334percent and denotes a strong conregdence in the explanation of performancevariance attributable to mission communication involvement awareness andcommitment (see Figure 6)

Missions communication technique and awareness (b1 and b2)The beta path (b1) coefregcient from communication technique to boardawareness is 0362 while the beta path (b2) from communication technique to

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372

management awareness is 0294 These results support the notion that theselected mission communication techniques aid in raising awareness of themission statement for both the board members and senior managementFurthermore the magnitude of this impact is relatively higher for boards Thecommunication technique construct however was not found to have any directimpact on the measure for member commitment to the mission

Involvement and awareness (b3 b4 and b5)The beta path (b3) coefregcient from board involvement to board awareness is0441 while the beta path (b4) from board involvement to managementawareness is 0128 These results support the notion that involvement with themission development process by the board is important in raising the boardrsquosawareness of the mission statement Similarly when the board is involved indeveloping their organizationrsquos mission it positively impacts managementrsquoscontinuing and current awareness of the mission plusmn though this latterrelationship is signiregcantly weaker

In contrast the beta path (b5) coefregcient from management involvement tomanagement awareness was found to be just 0158 while the beta path frommanagement involvement to board awareness was neither substantive norsigniregcant Therefore while managementrsquos involvement in the missiondevelopment process appears to encourage their continuing awareness of themission it does not appear to have any effect on the boardrsquos current awareness

Figure 6PLS structural

equation model

Implications forcorporate

governance

373

Antecedents to commitment (b6 b7 and b8)The beta path (b6) coefregcient from management involvement in missiondevelopment to membersrsquo commitment to the mission was established to be0139 while a beta path from either board involvement to commitment ormanagement involvement to board awareness did not exist What this suggestsis that while the commitment of an organizationrsquos members to the missionstatement can be directly supported by the managementrsquos involvement in themission development process the boardrsquos involvement acts as an antecedent tocommitment only indirectly and only through the process of raising its ownawareness (b3 and b4) Following that there are substantive and signiregcantpaths from both board awareness (b7 = 0150) and management awareness(b8 = 0173) to membersrsquo commitment to the mission

Commitment to performance (b9)The beta path (b9) coefregcient from individualsrsquo commitment to the missionstatement and performance was 0583 This is not at all surprising since itreplicates the regndings of a previous study by Bart et al (2001) But the regndingscontinue to underscore the tremendous impact and important role that membercommitment to the mission continues to have and to play respectively in termsof enhancing an organizationrsquos performance

DiscussionThere are a number of important and signiregcant regndings which havematerialized from the current study

Boardsrsquo awareness of their organizationrsquos missionThe regndings from Figure 3 suggest that directors and their boards appear to berelatively aware of their organizationrsquos mission plusmn though it was somewhatlower than managementrsquos Only a small percentage of respondents indicatedthat their board was ordfsomewhat awareordm of the mission and very few stated thatthere was no awareness at all Nevertheless for the most part there were still alarge number of directors who were not highly or fully aware of theirorganizationrsquos mission Therefore the question remains should they be In thisregard path analysis results are unequivocal Continuing board awareness ofthe mission plusmn whereby directors ordfknow understand and remember themissionordm plusmn is an important and signiregcant contributor to having individualsthroughout the organization commit to it The more aware the boards are oftheir organizationrsquos mission the greater their organizational membersrsquocommitment to it will be Moreover directorsrsquo awareness of the mission isequivalent in impact (with respect to membersrsquo commitment) in terms of bothmanagementrsquos awareness of the mission and managementrsquos involvement withthe missionrsquos development Consequently boards cannot afford to becomplacent when it comes to their organizationsrsquo mission and theircontinuing and current awareness of it

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This is a thought-provoking observation It suggests that the days of boardsbeing entertained every now and then with PowerPoint presentations of thecompany mission while the lobster sandwiches are passed around are overBoards must accept that the mission statement is a valuable and important toolin helping to set the strategic direction and positioning of the organization Itshould be the corner-stone of every organizationrsquos strategic plan Given thisimportance it cannot be given short shrift once it has been developed andintroduced to the organization Because every mission also needs thecontinuing commitment and support of all the organizational members if it is tobe ultimately achieved directors have an ongoing responsibility to keepthemselves aware of it as well

One obvious way in which they can help do this is to make sure that themission statement is a part of each board meeting and a part of every boarddiscussion Directors must refer to their organizationsrsquo mission regularly (notjust in a crisis) and use it to test managementrsquos ability to become and remainfocused Having the mission as part of every ordfboard packageordm would certainlyassist in this regard So would memorizing it in certain circumstancesDirectors also need to be assured that the mission is being achieved and thatthere is accountability for its implementation This in turn suggests that theremust be some sort of mechanism in place to measure the organizationrsquosprogress against the mission When actions such as these are taken directorswill help keep their organizationsrsquo mission alive not just for themselves but forthe rest of the gang as well (Please note though that additional comments onenhancing board awareness are being reserved for the following two sections)

Boardsrsquo involvement in the creation of their organizationrsquos missionThis paper began with the question of whether or not boards should beinvolved in the development of their organizationrsquos mission Unlike theprevious discussion on board awareness the regndings of Figure 3 show thatinvolvement by the board of directors in their organizationrsquos mission creationprocess is generally not a well accepted activity and generated the highestpercentage of responses in the category for ordfnot at allordm Whereas 80 percent ofthe respondents perceived their senior managements to be highly involved indeveloping their organizationsrsquo mission only 47 percent believed this to be thecase for the board Moreover informal conversations with established andsenior directors have suggested that board tradition typically dictates that therole of the board vis-aAacute -vis mission is for ordfmanagement to propose and for theboard to disposeordm The current regndings however would challenge thisviewpoint

Recall that the discussion in the previous section established the pivotal rolethat board awareness of the mission plays in terms of enhancing organizationalcommitment to the mission The results from path analysis in Figure 6however have demonstrated the critical importance of the boardrsquos involvement

Implications forcorporate

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375

in developing the mission if full board awareness of the mission is to beachieved Indeed of all the antecedent measures in the study it was boardinvolvement which obtained the strongest beta (b) score and was the No 1driver of board awareness Moreover the regndings of path analysis show thatwhile managementrsquos continuing awareness of the mission is also an importantconsideration in terms of securing organizational commitment to it thatawareness is produced almost equivalently from both their own plusmn and theboardrsquos plusmn involvement in mission development In other words it takes boththe boardrsquos and senior managementrsquos involvement to generate plusmn within theexecutive ranks plusmn the necessary and continuing knowledge and understanding(ie awareness) required to affect membersrsquo commitment to the missionInterestingly while management involvement by itself was also found to havea direct inmacruence on organizational commitment to the mission boardinvolvement did not Instead the boardrsquos impact on organizational commitmentto the mission is ordffeltordm through their ongoing awareness of it

Now this is a provocative notion since in the eyes of many individualsmanagement typically represents and provides to a greater extent than theboard the pragmatic ongoing and de facto strategic leadership of theorganization Yet the results from the current study would argue that directorsrsquoinvolvement in a missionrsquos development is a constructive activity on the part ofthe board and an important contributor to organizational success Shouldboards be involved in creating their organizationrsquos mission The answer wouldappear to be a deregnitive ordfyesordm

Directors must now see their role in terms of getting involved in thedevelopment of their organizationrsquos mission in order to raise awareness of it forthemselves and for management and raising awareness of the mission forthemselves in order to create and inmacruence higher levels of commitment to itthroughout the organization Consequently the regndings should be seen ashelping to put to rest the current debate concerning the nature and degree ofboard involvement in mission development Boards must get involved and it iswrong for them not to do so The research regndings thus represent for the regrsttime a true ordfbest practiceordm in corporate governance research The currentcorporate governance literature needs to be revised to take these results intoaccount

Mission communication and awarenessWhen the various techniques to communicate the mission were analyzed anumber of interesting observation were made To begin with when the relativeranking of the various communication methods (as shown in Figure 4) wasreviewed it appeared that there was no one technique which appeared to be theoverwhelming favourite The annual report appeared to be the most popular plusmnand perhaps the most obvious plusmn place for ensuring the widest possibledissemination of the mission among the various stakeholder populations After

JIC43

376

all anyone with a serious interest or ordfstakeordm in the organization would be sureto see the mission in this document The employee manual and posters werealso seen as logical choices for communicating the mission to employee groupsHowever no one technique achieved a usage rating greater than 67 percent andmost communication methods could be said to be used only to a moderateextent (mean score range 256-294) plusmn with the exception of advertisementswhich was clearly and indisputably the least favourite technique (mean score184)

It therefore came as somewhat of a surprise that when the communicationconstruct was created only three communication methods were found to bereliable and valid (ie company information kits company newsletters andother internal documents (such as company strategic and operating plansbudgets MBO and bonus criteria) Yet when these results were furtherdissected and contemplated they appeared to make considerable sense Foreffective communication to take place a ordfmessageordm must be sent receivedunderstood and remembered (Bart 2002) Accordingly while annual reportsmay be the most frequently used document for communicating anorganizationrsquos mission they are not the most effective This is because theyare often not read not widely read or not completely read As a result themission message while ordfsentordm is not necessarily received understood orremembered Similarly employee manuals may plusmn and probably should plusmncontain explicit reference to their organizationrsquos mission However how manytimes has anyone as employees ever referred to the mission by quoting it fromthe company manual Probably few if any at all

In contrast the communication techniques which appear to have a lastingand profound impact in terms of taking a mission message beyond its ordfsentpointordm are those which are designed to

create special attention (ie an information kit which is dedicated toexplaining the mission and can be used as a reference guide)

create ongoing attention and deal with short attention spans (egcompany newsletters) and

focus resource allocations (eg strategic and operational plans)

Thus when these documents are used most people pay attention Furthermorepath analysis conregrmed that both the board and management seem to belistening Indeed for the board the communication construct was the secondmost powerful inmacruencer in terms of its positive impact on board awareness ofthe mission Only board involvement with the mission was more importantHowever in terms of managementrsquos awareness results revealed that it was thecommunication construct which had the most profound impact plusmn almostdouble that of any other variables

These regndings are signiregcant They show that in terms of creatingcontinuing awareness on the part of boards with respect to their organizationsrsquo

Implications forcorporate

governance

377

missions it is necessary to regrst and foremost engage them actively andconstructively in its development Involvement begets awareness To keepthem continually aware various selected communication techniques then needto be deployed But those techniques will be impotent in terms of their effect ifthe board has not regrst made the commitment of time and energy to thedevelopment of the organizationrsquos mission There is no ordfViagraordm cure when thishas not taken place So boards need to understand how the timing andsequence of their awareness are created and sustained Hopefully this researchhelps to establish the proper path to be followed

The observations with respect to management awareness of the mission arealso intriguing As with the case of the board there is no question thatmanagement involvement in developing the mission produces a certain level ofongoing awareness Similarly one would expect that when the board is alsoinvolved it acts as a strong signal to management that the mission is moreimportant than might otherwise be found in organizations where the boardignores it When combined managementrsquos involvement and awareness have atremendous effect on the commitment that organizational members have withrespect to their mission But to sustain managementrsquos interest in the missionand keep their interest in the mission robust the regndings show that it is thecommunication construct plusmn with its three critical communication techniques plusmnwhich has the greatest impact Boards and their managements would do well toensure that these techniques are being regularly deployed if they are seriouslyinterested in making sure that senior executives do not lose sight of the missionor lose enthusiasm for it Relentless repetition of the mission message isprobably still the only way to ensure that the message is remembered plusmn the lastbut essential component of the rules for effective communication (Bart 2002)

ConclusionsIf there is one regnal thought it is this boards need to be more involved indeveloping plusmn and be continuously aware of plusmn their organizationrsquos mission Boardinvolvement matters So too does their awareness For too long there has been alack of clear guidance with respect to the boardrsquos role in mission The extantliterature is contradictory and confusing These results therefore represent asigniregcant and profound milestone for the literature on corporate governanceThe results herein demonstrate and prove ordfbest practiceordm while challengingmany of the assumptions underlying current board practices in this provocativearea Accordingly it is recommended that board involvement with a missionrsquosdevelopment plusmn and continuous awareness of it plusmn need to be both recognizedformally in an organizationrsquos governance structure (eg board charters) andproposed as an amendment to most governance codes currently in force It is alsorecommended that given this new responsibility for mission developmentdirectors need to be sufregciently trained in strategy development so that they canwith management develop a shared view on what the future of the organization

JIC43

378

should be and why it exists However to do so effectively both boards andmanagement need to develop a common language and strategic analysisframework Recent developments at the newly formed Directors College (a jointventure of the DeGroote Business School at McMaster University and theConference Board of Canada (see wwwthedirectorscollegecom)) should helpboards and their managements considerably in this regard

References

Arnold HJ and Feldman DC (1981) ordfSocial desirability response bias in self-report choicesituationsordm Academy of Management Journal Vol 24 pp 377-85

Baetz MC and Bart CK (1996) ordfDeveloping mission statements which workordm Long RangePlanning Vol 29 No 4 pp 524-31

Barclay DW Higgins C and Thompson R (1995) ordfThe partial least squares (PLS) approach tocausal modeling personal computer adaptation and use as illustrationordm TechnologyStudies Vol 2 No 2 pp 285-309

Bart CK (1997a) ordfSex lies and mission statementsordm Business Horizons November-Decemberpp 9-18

Bart CK (1997b) ordfIndustrial regrms and the power of missionordm Industrial MarketingManagement Vol 26 pp 371-83

Bart CK (1997c) ordfMission possibleordm CA Magazine September pp 33-4

Bart CK (1998a) ordfA comparison of mission statements and their rationales in innovative andnon-innovative regrmsordm International Journal of Technology Management Vol 16 No 1-3pp 64-77

Bart CK (1998b) ordfMission mattersordm CA Magazine March pp 31-41

Bart CK (1999a) ordfMaking mission statements countordm CA Magazine March pp 37-47

Bart CK (1999b) ordfAccepting the missionordm CA Magazine August pp 33-4

Bart CK (2000) ordfLasting inspirationordm CA Magazine May pp 49-50

Bart CK (2001a) ordfMeasuring the mission effect in human intellectual capitalordm Journal ofIntellectual Capital Research Vol 2 No 3 pp 320-30

Bart CK (2001b) ordfWhorsquos running the storeordm CA Magazine August pp 22-7

Bart CK (2002) A Tale of Two Employees Corporate Missions Inc Press Hamilton

Bart CK (2003a) ordfInnovation mission statements and learningordm International Journal ofInnovation and Learning forthcoming

Bart CK (2003b) ordfGood governance and intellectual capitalordm paper presented at the 24thMcMaster World Congress on the Management of Intellectual Capital and ElectronicCommerce Hamilton

Bart CK and Baetz MJ (1998) ordfThe relationship between mission statements and regrmperformance an exploratory studyordm Journal of Management Studies Vol 36 No 6pp 823-53

Bart CK and Tabone JC (1999) ordfMission statement content and hospital performance in theCanadian not-for-proregt health-care sectorordm Health Care Management Review Vol 24 No 3pp 18-29

Bart CK Bontis N and Taggar S (2001) ordfA model of mission statements and regrmperformanceordm Management Decision Vol 39 No 1 pp 19-35

Implications forcorporate

governance

379

aware) Managers were then asked (again using a four-point scale) to indicatethe degree to which they were involved in developing their organizationrsquosmission statement (1 = no involvement at all 2 = somewhat involved3 = moderately involved 4 = highly involved)

Figure 3 shows that the awareness of mission statements and theinvolvement in developing them differed between senior management andboard members On average board members scored lower than theirmanagement counterparts in both awareness (348 vs 366) and involvement

Figure 2ANOVA test forresponse bias

Figure 3Awareness andinvolvement by boardand senior management

JIC43

368

(298 vs 374) However in absolute terms awareness and involvement with themission by board members and senior managers appears to be fairly high

Mission communication technique usage There were a variety of missioncommunication techniques that were measured in this study (see Figure 4) Onaverage the use of annual reports and employee manuals was the mostprominent communication method in use at 676 and 635 percent respectivelyAlternatively only 273 percent of respondents used advertisements tocommunicate their mission statements

Outcome measuresThree outcome measures were used in order to assess the effect of board andsenior management awareness and involvement with the mission

(1) the extent to which members throughout the organization areemotionally committed to the mission statement (Bart 1998a Bart andTabone 1999 Bart et al 2001)

(2) the extent to which respondents were satisreged with the regnancialperformance of their organization (Bart 1997b 1998a Bart and Baetz1998 Bart and Tabone 1999) and

(3) the extent of perceived innovativeness of the organization

Respondents were asked to rate each of these outcome measures on a ten-pointscale (ie 0 = not at all 9 = to the greatest possible extent)

Bontis and his colleagues (Bontis and Fitz-enz 2002 Bontis and Girardi2000 Bontis and Nikitopoulos 2001 Bontis et al 1999 2000 Choo and Bontis2002 OrsquoRegan et al 2001 Stovel and Bontis 2002) have shown that

Figure 4Techniques to

communicate missionstatement

Implications forcorporate

governance

369

organizational commitment is a critical antecedent to intellectual capitaldevelopment and performance outcomes Furthermore Bontis (1998) andBontis et al (2002) have shown in intellectual capital studies that perceivedmeasures of performance can be a reasonable substitute for objective measuresof performance (Dess and Robinson 1984) and have a signiregcant correlationwith objective measures of regnancial performance (Lyles and Salk 1997Venkatraman and Ramnujam 1987) Accordingly the interpretation of theresults from this study is that respondents were on average ordfmoderatelysatisregedordm with membersrsquo commitment to the mission statement (mean = 594)regnancial performance (mean = 586) and organizational innovativeness(mean = 587)

It is also important to note that a control variable was used to limitunnecessary variability of the endogenous constructs For this study eachorganization was asked to provide the year in which the organization regrstdeveloped a recorded mission statement That year was converted to the age(ie age = 2002 2 year) of the mission statement process since inception Theaverage year of inception of the mission process for the regrms in this study was1989 (or 13 years) This was required so that variability in performance couldnot be attributable solely to mission experience

Partial least squares modelHulland (1999) has noted that the use of partial least squares (PLS) as astructural equation modeling technique has received increased interest in thestrategic management literature in areas such as intellectual capitalmanagement (Bontis 1998 2003b Bontis et al 2000 2002) and missionstatements (Bart et al 2001) According to Hulland (1999 pp 202-3) this isbecause ordfcausal models such as PLS can help strategic managementresearchers to achieve new insights As the regeld of strategic managementcontinues to mature researchers need to increasingly rise to the challengeordmPLS also allows researchers to develop a systematic and holistic view whenestablishing measures to solve research problems For large-sample modelingLISREL (Bollen 1990 Joreskog and Sorbom 1984) has several relativestrengths whereas for small-sample predictive research PLS (Fornell andBookstein 1982 Hulland 1999) is more appropriate

In general the most complex models will involve

(1) the number of indicators on the most complex formative construct or

(2) the largest number of antecedent constructs leading to an endogenousconstruct

Sample size requirements become at least ten times the number of predictorsfrom (1) or (2) whichever is greater (Barclay et al 1995) In this case there are atotal of nine formative indicators on the most complex construct which iscommunication technique (ie advertisement annual reports etc) and a total

JIC43

370

of six antecedent constructs leading to the endogenous construct Thereforethe minimum sample requirements become 9 3 10 or 90 PLS is an adequatetechnique for this study since the sample size is 339 respondents All of theitems germane to this study were therefore assigned to their respective scalesusing PLS as suggested by Barclay et al (1995) and Hulland (1999)

Reliability and validityThe survey items and constructs were subjected to various psychometricevaluations to conregrm reliability and validity A Cronbach alpharsquos (a) measurewas used to test the reliability of the communication technique construct whichcontained nine items The alpha (a) value of 0839 is above the minimumthreshold of 07 as supported by Nunnally (1978) Shimp and Sharma (1987)suggest that items have loading values greater than 07 to ensure constructvalidity This procedure is also supported by Carmines and Zeller (1979) andHulland (1999) In this case only three of the nine items had loading valuesgreater than 07 and were therefore removed prior to the subsequent modellingexercise

Interestingly the three remaining communication techniques that were bothreliable and valid were not necessarily those most often used by therespondents Company information kits (l = 0732) newsletters (l = 0732)and internal documents (l = 0702) were used only by 596 531 and 574percent of respondents Conversely the most often used communicationtechnique of annual reports was used by two-thirds (676 percent) of therespondents Yet its construct validity (l = 0598) was below the thresholddenoting a suspiciously absent nomological connection to the board andmanagement awareness of mission statements (see Figure 5)

Similarly a latent performance construct was created using two of theoutcome measures identireged earlier plusmn both of which were found to be bothvalid and reliable The regrst item was overall satisfaction with the regnancial

Figure 5Construct validity and

reliability ofcommunication

technique

Implications forcorporate

governance

371

performance of the organization (l = 0837) and the second item was howinnovative the organization was (l = 0874)

Research limitationsWith respect to the present results a number of caveats pertaining to commonmethod single-respondent and social desirability biases should beacknowledged To address the possibility of common method bias aHermanrsquos one-factor test on the questionnaire measurement items wasconducted (Konrad and Linnehan 1995 Scott and Bruce 1994) A principalcomponents factor analysis yielded four factors with eigenvalues greater than10 that accounted for 51 percent of the variance Since several factors asopposed to one single factor were identireged and since the regrst factor did notaccount for the majority of the variance (only 29 percent) a substantial amountof common method variance does not appear to be present (Podsakoff andOrgan 1986) Nevertheless the presence of common method problems cannotbe fully discarded

An important methodological imperative for this study was for eachrespondent to be highly familiar with the mission statement and its resultantorganizational effect In this respect the study was considered satisfactorysince the majority of respondents were top executives in their respectiveorganizations Given the singularity and specialized knowledge associatedwith these informants a single-informant approach was deemed best and wastherefore used We believed that less knowledgeable informants would result inless accurate data

Whereas survey data are sometimes subject to social desirability bias(Arnold and Feldman 1981 Podsakoff and Organ 1986) we do not perceivesuch bias to be a major concern for this study The topic of investigationalthough strategic was not thought to be so highly sensitive as to be likely toprevent responses that would present the respondent or organization in anunfavourable light In addition much of the information obtained was notdeemed highly conregdential However the occurrence of such bias cannot betotally ruled out

ResultsFigure 6 shows the regnal specireged PLS structural equation model Each pathand beta coefregcient displayed are both substantive and signiregcant Theexplanatory power of the model is relatively high for survey research at 334percent and denotes a strong conregdence in the explanation of performancevariance attributable to mission communication involvement awareness andcommitment (see Figure 6)

Missions communication technique and awareness (b1 and b2)The beta path (b1) coefregcient from communication technique to boardawareness is 0362 while the beta path (b2) from communication technique to

JIC43

372

management awareness is 0294 These results support the notion that theselected mission communication techniques aid in raising awareness of themission statement for both the board members and senior managementFurthermore the magnitude of this impact is relatively higher for boards Thecommunication technique construct however was not found to have any directimpact on the measure for member commitment to the mission

Involvement and awareness (b3 b4 and b5)The beta path (b3) coefregcient from board involvement to board awareness is0441 while the beta path (b4) from board involvement to managementawareness is 0128 These results support the notion that involvement with themission development process by the board is important in raising the boardrsquosawareness of the mission statement Similarly when the board is involved indeveloping their organizationrsquos mission it positively impacts managementrsquoscontinuing and current awareness of the mission plusmn though this latterrelationship is signiregcantly weaker

In contrast the beta path (b5) coefregcient from management involvement tomanagement awareness was found to be just 0158 while the beta path frommanagement involvement to board awareness was neither substantive norsigniregcant Therefore while managementrsquos involvement in the missiondevelopment process appears to encourage their continuing awareness of themission it does not appear to have any effect on the boardrsquos current awareness

Figure 6PLS structural

equation model

Implications forcorporate

governance

373

Antecedents to commitment (b6 b7 and b8)The beta path (b6) coefregcient from management involvement in missiondevelopment to membersrsquo commitment to the mission was established to be0139 while a beta path from either board involvement to commitment ormanagement involvement to board awareness did not exist What this suggestsis that while the commitment of an organizationrsquos members to the missionstatement can be directly supported by the managementrsquos involvement in themission development process the boardrsquos involvement acts as an antecedent tocommitment only indirectly and only through the process of raising its ownawareness (b3 and b4) Following that there are substantive and signiregcantpaths from both board awareness (b7 = 0150) and management awareness(b8 = 0173) to membersrsquo commitment to the mission

Commitment to performance (b9)The beta path (b9) coefregcient from individualsrsquo commitment to the missionstatement and performance was 0583 This is not at all surprising since itreplicates the regndings of a previous study by Bart et al (2001) But the regndingscontinue to underscore the tremendous impact and important role that membercommitment to the mission continues to have and to play respectively in termsof enhancing an organizationrsquos performance

DiscussionThere are a number of important and signiregcant regndings which havematerialized from the current study

Boardsrsquo awareness of their organizationrsquos missionThe regndings from Figure 3 suggest that directors and their boards appear to berelatively aware of their organizationrsquos mission plusmn though it was somewhatlower than managementrsquos Only a small percentage of respondents indicatedthat their board was ordfsomewhat awareordm of the mission and very few stated thatthere was no awareness at all Nevertheless for the most part there were still alarge number of directors who were not highly or fully aware of theirorganizationrsquos mission Therefore the question remains should they be In thisregard path analysis results are unequivocal Continuing board awareness ofthe mission plusmn whereby directors ordfknow understand and remember themissionordm plusmn is an important and signiregcant contributor to having individualsthroughout the organization commit to it The more aware the boards are oftheir organizationrsquos mission the greater their organizational membersrsquocommitment to it will be Moreover directorsrsquo awareness of the mission isequivalent in impact (with respect to membersrsquo commitment) in terms of bothmanagementrsquos awareness of the mission and managementrsquos involvement withthe missionrsquos development Consequently boards cannot afford to becomplacent when it comes to their organizationsrsquo mission and theircontinuing and current awareness of it

JIC43

374

This is a thought-provoking observation It suggests that the days of boardsbeing entertained every now and then with PowerPoint presentations of thecompany mission while the lobster sandwiches are passed around are overBoards must accept that the mission statement is a valuable and important toolin helping to set the strategic direction and positioning of the organization Itshould be the corner-stone of every organizationrsquos strategic plan Given thisimportance it cannot be given short shrift once it has been developed andintroduced to the organization Because every mission also needs thecontinuing commitment and support of all the organizational members if it is tobe ultimately achieved directors have an ongoing responsibility to keepthemselves aware of it as well

One obvious way in which they can help do this is to make sure that themission statement is a part of each board meeting and a part of every boarddiscussion Directors must refer to their organizationsrsquo mission regularly (notjust in a crisis) and use it to test managementrsquos ability to become and remainfocused Having the mission as part of every ordfboard packageordm would certainlyassist in this regard So would memorizing it in certain circumstancesDirectors also need to be assured that the mission is being achieved and thatthere is accountability for its implementation This in turn suggests that theremust be some sort of mechanism in place to measure the organizationrsquosprogress against the mission When actions such as these are taken directorswill help keep their organizationsrsquo mission alive not just for themselves but forthe rest of the gang as well (Please note though that additional comments onenhancing board awareness are being reserved for the following two sections)

Boardsrsquo involvement in the creation of their organizationrsquos missionThis paper began with the question of whether or not boards should beinvolved in the development of their organizationrsquos mission Unlike theprevious discussion on board awareness the regndings of Figure 3 show thatinvolvement by the board of directors in their organizationrsquos mission creationprocess is generally not a well accepted activity and generated the highestpercentage of responses in the category for ordfnot at allordm Whereas 80 percent ofthe respondents perceived their senior managements to be highly involved indeveloping their organizationsrsquo mission only 47 percent believed this to be thecase for the board Moreover informal conversations with established andsenior directors have suggested that board tradition typically dictates that therole of the board vis-aAacute -vis mission is for ordfmanagement to propose and for theboard to disposeordm The current regndings however would challenge thisviewpoint

Recall that the discussion in the previous section established the pivotal rolethat board awareness of the mission plays in terms of enhancing organizationalcommitment to the mission The results from path analysis in Figure 6however have demonstrated the critical importance of the boardrsquos involvement

Implications forcorporate

governance

375

in developing the mission if full board awareness of the mission is to beachieved Indeed of all the antecedent measures in the study it was boardinvolvement which obtained the strongest beta (b) score and was the No 1driver of board awareness Moreover the regndings of path analysis show thatwhile managementrsquos continuing awareness of the mission is also an importantconsideration in terms of securing organizational commitment to it thatawareness is produced almost equivalently from both their own plusmn and theboardrsquos plusmn involvement in mission development In other words it takes boththe boardrsquos and senior managementrsquos involvement to generate plusmn within theexecutive ranks plusmn the necessary and continuing knowledge and understanding(ie awareness) required to affect membersrsquo commitment to the missionInterestingly while management involvement by itself was also found to havea direct inmacruence on organizational commitment to the mission boardinvolvement did not Instead the boardrsquos impact on organizational commitmentto the mission is ordffeltordm through their ongoing awareness of it

Now this is a provocative notion since in the eyes of many individualsmanagement typically represents and provides to a greater extent than theboard the pragmatic ongoing and de facto strategic leadership of theorganization Yet the results from the current study would argue that directorsrsquoinvolvement in a missionrsquos development is a constructive activity on the part ofthe board and an important contributor to organizational success Shouldboards be involved in creating their organizationrsquos mission The answer wouldappear to be a deregnitive ordfyesordm

Directors must now see their role in terms of getting involved in thedevelopment of their organizationrsquos mission in order to raise awareness of it forthemselves and for management and raising awareness of the mission forthemselves in order to create and inmacruence higher levels of commitment to itthroughout the organization Consequently the regndings should be seen ashelping to put to rest the current debate concerning the nature and degree ofboard involvement in mission development Boards must get involved and it iswrong for them not to do so The research regndings thus represent for the regrsttime a true ordfbest practiceordm in corporate governance research The currentcorporate governance literature needs to be revised to take these results intoaccount

Mission communication and awarenessWhen the various techniques to communicate the mission were analyzed anumber of interesting observation were made To begin with when the relativeranking of the various communication methods (as shown in Figure 4) wasreviewed it appeared that there was no one technique which appeared to be theoverwhelming favourite The annual report appeared to be the most popular plusmnand perhaps the most obvious plusmn place for ensuring the widest possibledissemination of the mission among the various stakeholder populations After

JIC43

376

all anyone with a serious interest or ordfstakeordm in the organization would be sureto see the mission in this document The employee manual and posters werealso seen as logical choices for communicating the mission to employee groupsHowever no one technique achieved a usage rating greater than 67 percent andmost communication methods could be said to be used only to a moderateextent (mean score range 256-294) plusmn with the exception of advertisementswhich was clearly and indisputably the least favourite technique (mean score184)

It therefore came as somewhat of a surprise that when the communicationconstruct was created only three communication methods were found to bereliable and valid (ie company information kits company newsletters andother internal documents (such as company strategic and operating plansbudgets MBO and bonus criteria) Yet when these results were furtherdissected and contemplated they appeared to make considerable sense Foreffective communication to take place a ordfmessageordm must be sent receivedunderstood and remembered (Bart 2002) Accordingly while annual reportsmay be the most frequently used document for communicating anorganizationrsquos mission they are not the most effective This is because theyare often not read not widely read or not completely read As a result themission message while ordfsentordm is not necessarily received understood orremembered Similarly employee manuals may plusmn and probably should plusmncontain explicit reference to their organizationrsquos mission However how manytimes has anyone as employees ever referred to the mission by quoting it fromthe company manual Probably few if any at all

In contrast the communication techniques which appear to have a lastingand profound impact in terms of taking a mission message beyond its ordfsentpointordm are those which are designed to

create special attention (ie an information kit which is dedicated toexplaining the mission and can be used as a reference guide)

create ongoing attention and deal with short attention spans (egcompany newsletters) and

focus resource allocations (eg strategic and operational plans)

Thus when these documents are used most people pay attention Furthermorepath analysis conregrmed that both the board and management seem to belistening Indeed for the board the communication construct was the secondmost powerful inmacruencer in terms of its positive impact on board awareness ofthe mission Only board involvement with the mission was more importantHowever in terms of managementrsquos awareness results revealed that it was thecommunication construct which had the most profound impact plusmn almostdouble that of any other variables

These regndings are signiregcant They show that in terms of creatingcontinuing awareness on the part of boards with respect to their organizationsrsquo

Implications forcorporate

governance

377

missions it is necessary to regrst and foremost engage them actively andconstructively in its development Involvement begets awareness To keepthem continually aware various selected communication techniques then needto be deployed But those techniques will be impotent in terms of their effect ifthe board has not regrst made the commitment of time and energy to thedevelopment of the organizationrsquos mission There is no ordfViagraordm cure when thishas not taken place So boards need to understand how the timing andsequence of their awareness are created and sustained Hopefully this researchhelps to establish the proper path to be followed

The observations with respect to management awareness of the mission arealso intriguing As with the case of the board there is no question thatmanagement involvement in developing the mission produces a certain level ofongoing awareness Similarly one would expect that when the board is alsoinvolved it acts as a strong signal to management that the mission is moreimportant than might otherwise be found in organizations where the boardignores it When combined managementrsquos involvement and awareness have atremendous effect on the commitment that organizational members have withrespect to their mission But to sustain managementrsquos interest in the missionand keep their interest in the mission robust the regndings show that it is thecommunication construct plusmn with its three critical communication techniques plusmnwhich has the greatest impact Boards and their managements would do well toensure that these techniques are being regularly deployed if they are seriouslyinterested in making sure that senior executives do not lose sight of the missionor lose enthusiasm for it Relentless repetition of the mission message isprobably still the only way to ensure that the message is remembered plusmn the lastbut essential component of the rules for effective communication (Bart 2002)

ConclusionsIf there is one regnal thought it is this boards need to be more involved indeveloping plusmn and be continuously aware of plusmn their organizationrsquos mission Boardinvolvement matters So too does their awareness For too long there has been alack of clear guidance with respect to the boardrsquos role in mission The extantliterature is contradictory and confusing These results therefore represent asigniregcant and profound milestone for the literature on corporate governanceThe results herein demonstrate and prove ordfbest practiceordm while challengingmany of the assumptions underlying current board practices in this provocativearea Accordingly it is recommended that board involvement with a missionrsquosdevelopment plusmn and continuous awareness of it plusmn need to be both recognizedformally in an organizationrsquos governance structure (eg board charters) andproposed as an amendment to most governance codes currently in force It is alsorecommended that given this new responsibility for mission developmentdirectors need to be sufregciently trained in strategy development so that they canwith management develop a shared view on what the future of the organization

JIC43

378

should be and why it exists However to do so effectively both boards andmanagement need to develop a common language and strategic analysisframework Recent developments at the newly formed Directors College (a jointventure of the DeGroote Business School at McMaster University and theConference Board of Canada (see wwwthedirectorscollegecom)) should helpboards and their managements considerably in this regard

References

Arnold HJ and Feldman DC (1981) ordfSocial desirability response bias in self-report choicesituationsordm Academy of Management Journal Vol 24 pp 377-85

Baetz MC and Bart CK (1996) ordfDeveloping mission statements which workordm Long RangePlanning Vol 29 No 4 pp 524-31

Barclay DW Higgins C and Thompson R (1995) ordfThe partial least squares (PLS) approach tocausal modeling personal computer adaptation and use as illustrationordm TechnologyStudies Vol 2 No 2 pp 285-309

Bart CK (1997a) ordfSex lies and mission statementsordm Business Horizons November-Decemberpp 9-18

Bart CK (1997b) ordfIndustrial regrms and the power of missionordm Industrial MarketingManagement Vol 26 pp 371-83

Bart CK (1997c) ordfMission possibleordm CA Magazine September pp 33-4

Bart CK (1998a) ordfA comparison of mission statements and their rationales in innovative andnon-innovative regrmsordm International Journal of Technology Management Vol 16 No 1-3pp 64-77

Bart CK (1998b) ordfMission mattersordm CA Magazine March pp 31-41

Bart CK (1999a) ordfMaking mission statements countordm CA Magazine March pp 37-47

Bart CK (1999b) ordfAccepting the missionordm CA Magazine August pp 33-4

Bart CK (2000) ordfLasting inspirationordm CA Magazine May pp 49-50

Bart CK (2001a) ordfMeasuring the mission effect in human intellectual capitalordm Journal ofIntellectual Capital Research Vol 2 No 3 pp 320-30

Bart CK (2001b) ordfWhorsquos running the storeordm CA Magazine August pp 22-7

Bart CK (2002) A Tale of Two Employees Corporate Missions Inc Press Hamilton

Bart CK (2003a) ordfInnovation mission statements and learningordm International Journal ofInnovation and Learning forthcoming

Bart CK (2003b) ordfGood governance and intellectual capitalordm paper presented at the 24thMcMaster World Congress on the Management of Intellectual Capital and ElectronicCommerce Hamilton

Bart CK and Baetz MJ (1998) ordfThe relationship between mission statements and regrmperformance an exploratory studyordm Journal of Management Studies Vol 36 No 6pp 823-53

Bart CK and Tabone JC (1999) ordfMission statement content and hospital performance in theCanadian not-for-proregt health-care sectorordm Health Care Management Review Vol 24 No 3pp 18-29

Bart CK Bontis N and Taggar S (2001) ordfA model of mission statements and regrmperformanceordm Management Decision Vol 39 No 1 pp 19-35

Implications forcorporate

governance

379

(298 vs 374) However in absolute terms awareness and involvement with themission by board members and senior managers appears to be fairly high

Mission communication technique usage There were a variety of missioncommunication techniques that were measured in this study (see Figure 4) Onaverage the use of annual reports and employee manuals was the mostprominent communication method in use at 676 and 635 percent respectivelyAlternatively only 273 percent of respondents used advertisements tocommunicate their mission statements

Outcome measuresThree outcome measures were used in order to assess the effect of board andsenior management awareness and involvement with the mission

(1) the extent to which members throughout the organization areemotionally committed to the mission statement (Bart 1998a Bart andTabone 1999 Bart et al 2001)

(2) the extent to which respondents were satisreged with the regnancialperformance of their organization (Bart 1997b 1998a Bart and Baetz1998 Bart and Tabone 1999) and

(3) the extent of perceived innovativeness of the organization

Respondents were asked to rate each of these outcome measures on a ten-pointscale (ie 0 = not at all 9 = to the greatest possible extent)

Bontis and his colleagues (Bontis and Fitz-enz 2002 Bontis and Girardi2000 Bontis and Nikitopoulos 2001 Bontis et al 1999 2000 Choo and Bontis2002 OrsquoRegan et al 2001 Stovel and Bontis 2002) have shown that

Figure 4Techniques to

communicate missionstatement

Implications forcorporate

governance

369

organizational commitment is a critical antecedent to intellectual capitaldevelopment and performance outcomes Furthermore Bontis (1998) andBontis et al (2002) have shown in intellectual capital studies that perceivedmeasures of performance can be a reasonable substitute for objective measuresof performance (Dess and Robinson 1984) and have a signiregcant correlationwith objective measures of regnancial performance (Lyles and Salk 1997Venkatraman and Ramnujam 1987) Accordingly the interpretation of theresults from this study is that respondents were on average ordfmoderatelysatisregedordm with membersrsquo commitment to the mission statement (mean = 594)regnancial performance (mean = 586) and organizational innovativeness(mean = 587)

It is also important to note that a control variable was used to limitunnecessary variability of the endogenous constructs For this study eachorganization was asked to provide the year in which the organization regrstdeveloped a recorded mission statement That year was converted to the age(ie age = 2002 2 year) of the mission statement process since inception Theaverage year of inception of the mission process for the regrms in this study was1989 (or 13 years) This was required so that variability in performance couldnot be attributable solely to mission experience

Partial least squares modelHulland (1999) has noted that the use of partial least squares (PLS) as astructural equation modeling technique has received increased interest in thestrategic management literature in areas such as intellectual capitalmanagement (Bontis 1998 2003b Bontis et al 2000 2002) and missionstatements (Bart et al 2001) According to Hulland (1999 pp 202-3) this isbecause ordfcausal models such as PLS can help strategic managementresearchers to achieve new insights As the regeld of strategic managementcontinues to mature researchers need to increasingly rise to the challengeordmPLS also allows researchers to develop a systematic and holistic view whenestablishing measures to solve research problems For large-sample modelingLISREL (Bollen 1990 Joreskog and Sorbom 1984) has several relativestrengths whereas for small-sample predictive research PLS (Fornell andBookstein 1982 Hulland 1999) is more appropriate

In general the most complex models will involve

(1) the number of indicators on the most complex formative construct or

(2) the largest number of antecedent constructs leading to an endogenousconstruct

Sample size requirements become at least ten times the number of predictorsfrom (1) or (2) whichever is greater (Barclay et al 1995) In this case there are atotal of nine formative indicators on the most complex construct which iscommunication technique (ie advertisement annual reports etc) and a total

JIC43

370

of six antecedent constructs leading to the endogenous construct Thereforethe minimum sample requirements become 9 3 10 or 90 PLS is an adequatetechnique for this study since the sample size is 339 respondents All of theitems germane to this study were therefore assigned to their respective scalesusing PLS as suggested by Barclay et al (1995) and Hulland (1999)

Reliability and validityThe survey items and constructs were subjected to various psychometricevaluations to conregrm reliability and validity A Cronbach alpharsquos (a) measurewas used to test the reliability of the communication technique construct whichcontained nine items The alpha (a) value of 0839 is above the minimumthreshold of 07 as supported by Nunnally (1978) Shimp and Sharma (1987)suggest that items have loading values greater than 07 to ensure constructvalidity This procedure is also supported by Carmines and Zeller (1979) andHulland (1999) In this case only three of the nine items had loading valuesgreater than 07 and were therefore removed prior to the subsequent modellingexercise

Interestingly the three remaining communication techniques that were bothreliable and valid were not necessarily those most often used by therespondents Company information kits (l = 0732) newsletters (l = 0732)and internal documents (l = 0702) were used only by 596 531 and 574percent of respondents Conversely the most often used communicationtechnique of annual reports was used by two-thirds (676 percent) of therespondents Yet its construct validity (l = 0598) was below the thresholddenoting a suspiciously absent nomological connection to the board andmanagement awareness of mission statements (see Figure 5)

Similarly a latent performance construct was created using two of theoutcome measures identireged earlier plusmn both of which were found to be bothvalid and reliable The regrst item was overall satisfaction with the regnancial

Figure 5Construct validity and

reliability ofcommunication

technique

Implications forcorporate

governance

371

performance of the organization (l = 0837) and the second item was howinnovative the organization was (l = 0874)

Research limitationsWith respect to the present results a number of caveats pertaining to commonmethod single-respondent and social desirability biases should beacknowledged To address the possibility of common method bias aHermanrsquos one-factor test on the questionnaire measurement items wasconducted (Konrad and Linnehan 1995 Scott and Bruce 1994) A principalcomponents factor analysis yielded four factors with eigenvalues greater than10 that accounted for 51 percent of the variance Since several factors asopposed to one single factor were identireged and since the regrst factor did notaccount for the majority of the variance (only 29 percent) a substantial amountof common method variance does not appear to be present (Podsakoff andOrgan 1986) Nevertheless the presence of common method problems cannotbe fully discarded

An important methodological imperative for this study was for eachrespondent to be highly familiar with the mission statement and its resultantorganizational effect In this respect the study was considered satisfactorysince the majority of respondents were top executives in their respectiveorganizations Given the singularity and specialized knowledge associatedwith these informants a single-informant approach was deemed best and wastherefore used We believed that less knowledgeable informants would result inless accurate data

Whereas survey data are sometimes subject to social desirability bias(Arnold and Feldman 1981 Podsakoff and Organ 1986) we do not perceivesuch bias to be a major concern for this study The topic of investigationalthough strategic was not thought to be so highly sensitive as to be likely toprevent responses that would present the respondent or organization in anunfavourable light In addition much of the information obtained was notdeemed highly conregdential However the occurrence of such bias cannot betotally ruled out

ResultsFigure 6 shows the regnal specireged PLS structural equation model Each pathand beta coefregcient displayed are both substantive and signiregcant Theexplanatory power of the model is relatively high for survey research at 334percent and denotes a strong conregdence in the explanation of performancevariance attributable to mission communication involvement awareness andcommitment (see Figure 6)

Missions communication technique and awareness (b1 and b2)The beta path (b1) coefregcient from communication technique to boardawareness is 0362 while the beta path (b2) from communication technique to

JIC43

372

management awareness is 0294 These results support the notion that theselected mission communication techniques aid in raising awareness of themission statement for both the board members and senior managementFurthermore the magnitude of this impact is relatively higher for boards Thecommunication technique construct however was not found to have any directimpact on the measure for member commitment to the mission

Involvement and awareness (b3 b4 and b5)The beta path (b3) coefregcient from board involvement to board awareness is0441 while the beta path (b4) from board involvement to managementawareness is 0128 These results support the notion that involvement with themission development process by the board is important in raising the boardrsquosawareness of the mission statement Similarly when the board is involved indeveloping their organizationrsquos mission it positively impacts managementrsquoscontinuing and current awareness of the mission plusmn though this latterrelationship is signiregcantly weaker

In contrast the beta path (b5) coefregcient from management involvement tomanagement awareness was found to be just 0158 while the beta path frommanagement involvement to board awareness was neither substantive norsigniregcant Therefore while managementrsquos involvement in the missiondevelopment process appears to encourage their continuing awareness of themission it does not appear to have any effect on the boardrsquos current awareness

Figure 6PLS structural

equation model

Implications forcorporate

governance

373

Antecedents to commitment (b6 b7 and b8)The beta path (b6) coefregcient from management involvement in missiondevelopment to membersrsquo commitment to the mission was established to be0139 while a beta path from either board involvement to commitment ormanagement involvement to board awareness did not exist What this suggestsis that while the commitment of an organizationrsquos members to the missionstatement can be directly supported by the managementrsquos involvement in themission development process the boardrsquos involvement acts as an antecedent tocommitment only indirectly and only through the process of raising its ownawareness (b3 and b4) Following that there are substantive and signiregcantpaths from both board awareness (b7 = 0150) and management awareness(b8 = 0173) to membersrsquo commitment to the mission

Commitment to performance (b9)The beta path (b9) coefregcient from individualsrsquo commitment to the missionstatement and performance was 0583 This is not at all surprising since itreplicates the regndings of a previous study by Bart et al (2001) But the regndingscontinue to underscore the tremendous impact and important role that membercommitment to the mission continues to have and to play respectively in termsof enhancing an organizationrsquos performance

DiscussionThere are a number of important and signiregcant regndings which havematerialized from the current study

Boardsrsquo awareness of their organizationrsquos missionThe regndings from Figure 3 suggest that directors and their boards appear to berelatively aware of their organizationrsquos mission plusmn though it was somewhatlower than managementrsquos Only a small percentage of respondents indicatedthat their board was ordfsomewhat awareordm of the mission and very few stated thatthere was no awareness at all Nevertheless for the most part there were still alarge number of directors who were not highly or fully aware of theirorganizationrsquos mission Therefore the question remains should they be In thisregard path analysis results are unequivocal Continuing board awareness ofthe mission plusmn whereby directors ordfknow understand and remember themissionordm plusmn is an important and signiregcant contributor to having individualsthroughout the organization commit to it The more aware the boards are oftheir organizationrsquos mission the greater their organizational membersrsquocommitment to it will be Moreover directorsrsquo awareness of the mission isequivalent in impact (with respect to membersrsquo commitment) in terms of bothmanagementrsquos awareness of the mission and managementrsquos involvement withthe missionrsquos development Consequently boards cannot afford to becomplacent when it comes to their organizationsrsquo mission and theircontinuing and current awareness of it

JIC43

374

This is a thought-provoking observation It suggests that the days of boardsbeing entertained every now and then with PowerPoint presentations of thecompany mission while the lobster sandwiches are passed around are overBoards must accept that the mission statement is a valuable and important toolin helping to set the strategic direction and positioning of the organization Itshould be the corner-stone of every organizationrsquos strategic plan Given thisimportance it cannot be given short shrift once it has been developed andintroduced to the organization Because every mission also needs thecontinuing commitment and support of all the organizational members if it is tobe ultimately achieved directors have an ongoing responsibility to keepthemselves aware of it as well

One obvious way in which they can help do this is to make sure that themission statement is a part of each board meeting and a part of every boarddiscussion Directors must refer to their organizationsrsquo mission regularly (notjust in a crisis) and use it to test managementrsquos ability to become and remainfocused Having the mission as part of every ordfboard packageordm would certainlyassist in this regard So would memorizing it in certain circumstancesDirectors also need to be assured that the mission is being achieved and thatthere is accountability for its implementation This in turn suggests that theremust be some sort of mechanism in place to measure the organizationrsquosprogress against the mission When actions such as these are taken directorswill help keep their organizationsrsquo mission alive not just for themselves but forthe rest of the gang as well (Please note though that additional comments onenhancing board awareness are being reserved for the following two sections)

Boardsrsquo involvement in the creation of their organizationrsquos missionThis paper began with the question of whether or not boards should beinvolved in the development of their organizationrsquos mission Unlike theprevious discussion on board awareness the regndings of Figure 3 show thatinvolvement by the board of directors in their organizationrsquos mission creationprocess is generally not a well accepted activity and generated the highestpercentage of responses in the category for ordfnot at allordm Whereas 80 percent ofthe respondents perceived their senior managements to be highly involved indeveloping their organizationsrsquo mission only 47 percent believed this to be thecase for the board Moreover informal conversations with established andsenior directors have suggested that board tradition typically dictates that therole of the board vis-aAacute -vis mission is for ordfmanagement to propose and for theboard to disposeordm The current regndings however would challenge thisviewpoint

Recall that the discussion in the previous section established the pivotal rolethat board awareness of the mission plays in terms of enhancing organizationalcommitment to the mission The results from path analysis in Figure 6however have demonstrated the critical importance of the boardrsquos involvement

Implications forcorporate

governance

375

in developing the mission if full board awareness of the mission is to beachieved Indeed of all the antecedent measures in the study it was boardinvolvement which obtained the strongest beta (b) score and was the No 1driver of board awareness Moreover the regndings of path analysis show thatwhile managementrsquos continuing awareness of the mission is also an importantconsideration in terms of securing organizational commitment to it thatawareness is produced almost equivalently from both their own plusmn and theboardrsquos plusmn involvement in mission development In other words it takes boththe boardrsquos and senior managementrsquos involvement to generate plusmn within theexecutive ranks plusmn the necessary and continuing knowledge and understanding(ie awareness) required to affect membersrsquo commitment to the missionInterestingly while management involvement by itself was also found to havea direct inmacruence on organizational commitment to the mission boardinvolvement did not Instead the boardrsquos impact on organizational commitmentto the mission is ordffeltordm through their ongoing awareness of it

Now this is a provocative notion since in the eyes of many individualsmanagement typically represents and provides to a greater extent than theboard the pragmatic ongoing and de facto strategic leadership of theorganization Yet the results from the current study would argue that directorsrsquoinvolvement in a missionrsquos development is a constructive activity on the part ofthe board and an important contributor to organizational success Shouldboards be involved in creating their organizationrsquos mission The answer wouldappear to be a deregnitive ordfyesordm

Directors must now see their role in terms of getting involved in thedevelopment of their organizationrsquos mission in order to raise awareness of it forthemselves and for management and raising awareness of the mission forthemselves in order to create and inmacruence higher levels of commitment to itthroughout the organization Consequently the regndings should be seen ashelping to put to rest the current debate concerning the nature and degree ofboard involvement in mission development Boards must get involved and it iswrong for them not to do so The research regndings thus represent for the regrsttime a true ordfbest practiceordm in corporate governance research The currentcorporate governance literature needs to be revised to take these results intoaccount

Mission communication and awarenessWhen the various techniques to communicate the mission were analyzed anumber of interesting observation were made To begin with when the relativeranking of the various communication methods (as shown in Figure 4) wasreviewed it appeared that there was no one technique which appeared to be theoverwhelming favourite The annual report appeared to be the most popular plusmnand perhaps the most obvious plusmn place for ensuring the widest possibledissemination of the mission among the various stakeholder populations After

JIC43

376

all anyone with a serious interest or ordfstakeordm in the organization would be sureto see the mission in this document The employee manual and posters werealso seen as logical choices for communicating the mission to employee groupsHowever no one technique achieved a usage rating greater than 67 percent andmost communication methods could be said to be used only to a moderateextent (mean score range 256-294) plusmn with the exception of advertisementswhich was clearly and indisputably the least favourite technique (mean score184)

It therefore came as somewhat of a surprise that when the communicationconstruct was created only three communication methods were found to bereliable and valid (ie company information kits company newsletters andother internal documents (such as company strategic and operating plansbudgets MBO and bonus criteria) Yet when these results were furtherdissected and contemplated they appeared to make considerable sense Foreffective communication to take place a ordfmessageordm must be sent receivedunderstood and remembered (Bart 2002) Accordingly while annual reportsmay be the most frequently used document for communicating anorganizationrsquos mission they are not the most effective This is because theyare often not read not widely read or not completely read As a result themission message while ordfsentordm is not necessarily received understood orremembered Similarly employee manuals may plusmn and probably should plusmncontain explicit reference to their organizationrsquos mission However how manytimes has anyone as employees ever referred to the mission by quoting it fromthe company manual Probably few if any at all

In contrast the communication techniques which appear to have a lastingand profound impact in terms of taking a mission message beyond its ordfsentpointordm are those which are designed to

create special attention (ie an information kit which is dedicated toexplaining the mission and can be used as a reference guide)

create ongoing attention and deal with short attention spans (egcompany newsletters) and

focus resource allocations (eg strategic and operational plans)

Thus when these documents are used most people pay attention Furthermorepath analysis conregrmed that both the board and management seem to belistening Indeed for the board the communication construct was the secondmost powerful inmacruencer in terms of its positive impact on board awareness ofthe mission Only board involvement with the mission was more importantHowever in terms of managementrsquos awareness results revealed that it was thecommunication construct which had the most profound impact plusmn almostdouble that of any other variables

These regndings are signiregcant They show that in terms of creatingcontinuing awareness on the part of boards with respect to their organizationsrsquo

Implications forcorporate

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377

missions it is necessary to regrst and foremost engage them actively andconstructively in its development Involvement begets awareness To keepthem continually aware various selected communication techniques then needto be deployed But those techniques will be impotent in terms of their effect ifthe board has not regrst made the commitment of time and energy to thedevelopment of the organizationrsquos mission There is no ordfViagraordm cure when thishas not taken place So boards need to understand how the timing andsequence of their awareness are created and sustained Hopefully this researchhelps to establish the proper path to be followed

The observations with respect to management awareness of the mission arealso intriguing As with the case of the board there is no question thatmanagement involvement in developing the mission produces a certain level ofongoing awareness Similarly one would expect that when the board is alsoinvolved it acts as a strong signal to management that the mission is moreimportant than might otherwise be found in organizations where the boardignores it When combined managementrsquos involvement and awareness have atremendous effect on the commitment that organizational members have withrespect to their mission But to sustain managementrsquos interest in the missionand keep their interest in the mission robust the regndings show that it is thecommunication construct plusmn with its three critical communication techniques plusmnwhich has the greatest impact Boards and their managements would do well toensure that these techniques are being regularly deployed if they are seriouslyinterested in making sure that senior executives do not lose sight of the missionor lose enthusiasm for it Relentless repetition of the mission message isprobably still the only way to ensure that the message is remembered plusmn the lastbut essential component of the rules for effective communication (Bart 2002)

ConclusionsIf there is one regnal thought it is this boards need to be more involved indeveloping plusmn and be continuously aware of plusmn their organizationrsquos mission Boardinvolvement matters So too does their awareness For too long there has been alack of clear guidance with respect to the boardrsquos role in mission The extantliterature is contradictory and confusing These results therefore represent asigniregcant and profound milestone for the literature on corporate governanceThe results herein demonstrate and prove ordfbest practiceordm while challengingmany of the assumptions underlying current board practices in this provocativearea Accordingly it is recommended that board involvement with a missionrsquosdevelopment plusmn and continuous awareness of it plusmn need to be both recognizedformally in an organizationrsquos governance structure (eg board charters) andproposed as an amendment to most governance codes currently in force It is alsorecommended that given this new responsibility for mission developmentdirectors need to be sufregciently trained in strategy development so that they canwith management develop a shared view on what the future of the organization

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should be and why it exists However to do so effectively both boards andmanagement need to develop a common language and strategic analysisframework Recent developments at the newly formed Directors College (a jointventure of the DeGroote Business School at McMaster University and theConference Board of Canada (see wwwthedirectorscollegecom)) should helpboards and their managements considerably in this regard

References

Arnold HJ and Feldman DC (1981) ordfSocial desirability response bias in self-report choicesituationsordm Academy of Management Journal Vol 24 pp 377-85

Baetz MC and Bart CK (1996) ordfDeveloping mission statements which workordm Long RangePlanning Vol 29 No 4 pp 524-31

Barclay DW Higgins C and Thompson R (1995) ordfThe partial least squares (PLS) approach tocausal modeling personal computer adaptation and use as illustrationordm TechnologyStudies Vol 2 No 2 pp 285-309

Bart CK (1997a) ordfSex lies and mission statementsordm Business Horizons November-Decemberpp 9-18

Bart CK (1997b) ordfIndustrial regrms and the power of missionordm Industrial MarketingManagement Vol 26 pp 371-83

Bart CK (1997c) ordfMission possibleordm CA Magazine September pp 33-4

Bart CK (1998a) ordfA comparison of mission statements and their rationales in innovative andnon-innovative regrmsordm International Journal of Technology Management Vol 16 No 1-3pp 64-77

Bart CK (1998b) ordfMission mattersordm CA Magazine March pp 31-41

Bart CK (1999a) ordfMaking mission statements countordm CA Magazine March pp 37-47

Bart CK (1999b) ordfAccepting the missionordm CA Magazine August pp 33-4

Bart CK (2000) ordfLasting inspirationordm CA Magazine May pp 49-50

Bart CK (2001a) ordfMeasuring the mission effect in human intellectual capitalordm Journal ofIntellectual Capital Research Vol 2 No 3 pp 320-30

Bart CK (2001b) ordfWhorsquos running the storeordm CA Magazine August pp 22-7

Bart CK (2002) A Tale of Two Employees Corporate Missions Inc Press Hamilton

Bart CK (2003a) ordfInnovation mission statements and learningordm International Journal ofInnovation and Learning forthcoming

Bart CK (2003b) ordfGood governance and intellectual capitalordm paper presented at the 24thMcMaster World Congress on the Management of Intellectual Capital and ElectronicCommerce Hamilton

Bart CK and Baetz MJ (1998) ordfThe relationship between mission statements and regrmperformance an exploratory studyordm Journal of Management Studies Vol 36 No 6pp 823-53

Bart CK and Tabone JC (1999) ordfMission statement content and hospital performance in theCanadian not-for-proregt health-care sectorordm Health Care Management Review Vol 24 No 3pp 18-29

Bart CK Bontis N and Taggar S (2001) ordfA model of mission statements and regrmperformanceordm Management Decision Vol 39 No 1 pp 19-35

Implications forcorporate

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379

organizational commitment is a critical antecedent to intellectual capitaldevelopment and performance outcomes Furthermore Bontis (1998) andBontis et al (2002) have shown in intellectual capital studies that perceivedmeasures of performance can be a reasonable substitute for objective measuresof performance (Dess and Robinson 1984) and have a signiregcant correlationwith objective measures of regnancial performance (Lyles and Salk 1997Venkatraman and Ramnujam 1987) Accordingly the interpretation of theresults from this study is that respondents were on average ordfmoderatelysatisregedordm with membersrsquo commitment to the mission statement (mean = 594)regnancial performance (mean = 586) and organizational innovativeness(mean = 587)

It is also important to note that a control variable was used to limitunnecessary variability of the endogenous constructs For this study eachorganization was asked to provide the year in which the organization regrstdeveloped a recorded mission statement That year was converted to the age(ie age = 2002 2 year) of the mission statement process since inception Theaverage year of inception of the mission process for the regrms in this study was1989 (or 13 years) This was required so that variability in performance couldnot be attributable solely to mission experience

Partial least squares modelHulland (1999) has noted that the use of partial least squares (PLS) as astructural equation modeling technique has received increased interest in thestrategic management literature in areas such as intellectual capitalmanagement (Bontis 1998 2003b Bontis et al 2000 2002) and missionstatements (Bart et al 2001) According to Hulland (1999 pp 202-3) this isbecause ordfcausal models such as PLS can help strategic managementresearchers to achieve new insights As the regeld of strategic managementcontinues to mature researchers need to increasingly rise to the challengeordmPLS also allows researchers to develop a systematic and holistic view whenestablishing measures to solve research problems For large-sample modelingLISREL (Bollen 1990 Joreskog and Sorbom 1984) has several relativestrengths whereas for small-sample predictive research PLS (Fornell andBookstein 1982 Hulland 1999) is more appropriate

In general the most complex models will involve

(1) the number of indicators on the most complex formative construct or

(2) the largest number of antecedent constructs leading to an endogenousconstruct

Sample size requirements become at least ten times the number of predictorsfrom (1) or (2) whichever is greater (Barclay et al 1995) In this case there are atotal of nine formative indicators on the most complex construct which iscommunication technique (ie advertisement annual reports etc) and a total

JIC43

370

of six antecedent constructs leading to the endogenous construct Thereforethe minimum sample requirements become 9 3 10 or 90 PLS is an adequatetechnique for this study since the sample size is 339 respondents All of theitems germane to this study were therefore assigned to their respective scalesusing PLS as suggested by Barclay et al (1995) and Hulland (1999)

Reliability and validityThe survey items and constructs were subjected to various psychometricevaluations to conregrm reliability and validity A Cronbach alpharsquos (a) measurewas used to test the reliability of the communication technique construct whichcontained nine items The alpha (a) value of 0839 is above the minimumthreshold of 07 as supported by Nunnally (1978) Shimp and Sharma (1987)suggest that items have loading values greater than 07 to ensure constructvalidity This procedure is also supported by Carmines and Zeller (1979) andHulland (1999) In this case only three of the nine items had loading valuesgreater than 07 and were therefore removed prior to the subsequent modellingexercise

Interestingly the three remaining communication techniques that were bothreliable and valid were not necessarily those most often used by therespondents Company information kits (l = 0732) newsletters (l = 0732)and internal documents (l = 0702) were used only by 596 531 and 574percent of respondents Conversely the most often used communicationtechnique of annual reports was used by two-thirds (676 percent) of therespondents Yet its construct validity (l = 0598) was below the thresholddenoting a suspiciously absent nomological connection to the board andmanagement awareness of mission statements (see Figure 5)

Similarly a latent performance construct was created using two of theoutcome measures identireged earlier plusmn both of which were found to be bothvalid and reliable The regrst item was overall satisfaction with the regnancial

Figure 5Construct validity and

reliability ofcommunication

technique

Implications forcorporate

governance

371

performance of the organization (l = 0837) and the second item was howinnovative the organization was (l = 0874)

Research limitationsWith respect to the present results a number of caveats pertaining to commonmethod single-respondent and social desirability biases should beacknowledged To address the possibility of common method bias aHermanrsquos one-factor test on the questionnaire measurement items wasconducted (Konrad and Linnehan 1995 Scott and Bruce 1994) A principalcomponents factor analysis yielded four factors with eigenvalues greater than10 that accounted for 51 percent of the variance Since several factors asopposed to one single factor were identireged and since the regrst factor did notaccount for the majority of the variance (only 29 percent) a substantial amountof common method variance does not appear to be present (Podsakoff andOrgan 1986) Nevertheless the presence of common method problems cannotbe fully discarded

An important methodological imperative for this study was for eachrespondent to be highly familiar with the mission statement and its resultantorganizational effect In this respect the study was considered satisfactorysince the majority of respondents were top executives in their respectiveorganizations Given the singularity and specialized knowledge associatedwith these informants a single-informant approach was deemed best and wastherefore used We believed that less knowledgeable informants would result inless accurate data

Whereas survey data are sometimes subject to social desirability bias(Arnold and Feldman 1981 Podsakoff and Organ 1986) we do not perceivesuch bias to be a major concern for this study The topic of investigationalthough strategic was not thought to be so highly sensitive as to be likely toprevent responses that would present the respondent or organization in anunfavourable light In addition much of the information obtained was notdeemed highly conregdential However the occurrence of such bias cannot betotally ruled out

ResultsFigure 6 shows the regnal specireged PLS structural equation model Each pathand beta coefregcient displayed are both substantive and signiregcant Theexplanatory power of the model is relatively high for survey research at 334percent and denotes a strong conregdence in the explanation of performancevariance attributable to mission communication involvement awareness andcommitment (see Figure 6)

Missions communication technique and awareness (b1 and b2)The beta path (b1) coefregcient from communication technique to boardawareness is 0362 while the beta path (b2) from communication technique to

JIC43

372

management awareness is 0294 These results support the notion that theselected mission communication techniques aid in raising awareness of themission statement for both the board members and senior managementFurthermore the magnitude of this impact is relatively higher for boards Thecommunication technique construct however was not found to have any directimpact on the measure for member commitment to the mission

Involvement and awareness (b3 b4 and b5)The beta path (b3) coefregcient from board involvement to board awareness is0441 while the beta path (b4) from board involvement to managementawareness is 0128 These results support the notion that involvement with themission development process by the board is important in raising the boardrsquosawareness of the mission statement Similarly when the board is involved indeveloping their organizationrsquos mission it positively impacts managementrsquoscontinuing and current awareness of the mission plusmn though this latterrelationship is signiregcantly weaker

In contrast the beta path (b5) coefregcient from management involvement tomanagement awareness was found to be just 0158 while the beta path frommanagement involvement to board awareness was neither substantive norsigniregcant Therefore while managementrsquos involvement in the missiondevelopment process appears to encourage their continuing awareness of themission it does not appear to have any effect on the boardrsquos current awareness

Figure 6PLS structural

equation model

Implications forcorporate

governance

373

Antecedents to commitment (b6 b7 and b8)The beta path (b6) coefregcient from management involvement in missiondevelopment to membersrsquo commitment to the mission was established to be0139 while a beta path from either board involvement to commitment ormanagement involvement to board awareness did not exist What this suggestsis that while the commitment of an organizationrsquos members to the missionstatement can be directly supported by the managementrsquos involvement in themission development process the boardrsquos involvement acts as an antecedent tocommitment only indirectly and only through the process of raising its ownawareness (b3 and b4) Following that there are substantive and signiregcantpaths from both board awareness (b7 = 0150) and management awareness(b8 = 0173) to membersrsquo commitment to the mission

Commitment to performance (b9)The beta path (b9) coefregcient from individualsrsquo commitment to the missionstatement and performance was 0583 This is not at all surprising since itreplicates the regndings of a previous study by Bart et al (2001) But the regndingscontinue to underscore the tremendous impact and important role that membercommitment to the mission continues to have and to play respectively in termsof enhancing an organizationrsquos performance

DiscussionThere are a number of important and signiregcant regndings which havematerialized from the current study

Boardsrsquo awareness of their organizationrsquos missionThe regndings from Figure 3 suggest that directors and their boards appear to berelatively aware of their organizationrsquos mission plusmn though it was somewhatlower than managementrsquos Only a small percentage of respondents indicatedthat their board was ordfsomewhat awareordm of the mission and very few stated thatthere was no awareness at all Nevertheless for the most part there were still alarge number of directors who were not highly or fully aware of theirorganizationrsquos mission Therefore the question remains should they be In thisregard path analysis results are unequivocal Continuing board awareness ofthe mission plusmn whereby directors ordfknow understand and remember themissionordm plusmn is an important and signiregcant contributor to having individualsthroughout the organization commit to it The more aware the boards are oftheir organizationrsquos mission the greater their organizational membersrsquocommitment to it will be Moreover directorsrsquo awareness of the mission isequivalent in impact (with respect to membersrsquo commitment) in terms of bothmanagementrsquos awareness of the mission and managementrsquos involvement withthe missionrsquos development Consequently boards cannot afford to becomplacent when it comes to their organizationsrsquo mission and theircontinuing and current awareness of it

JIC43

374

This is a thought-provoking observation It suggests that the days of boardsbeing entertained every now and then with PowerPoint presentations of thecompany mission while the lobster sandwiches are passed around are overBoards must accept that the mission statement is a valuable and important toolin helping to set the strategic direction and positioning of the organization Itshould be the corner-stone of every organizationrsquos strategic plan Given thisimportance it cannot be given short shrift once it has been developed andintroduced to the organization Because every mission also needs thecontinuing commitment and support of all the organizational members if it is tobe ultimately achieved directors have an ongoing responsibility to keepthemselves aware of it as well

One obvious way in which they can help do this is to make sure that themission statement is a part of each board meeting and a part of every boarddiscussion Directors must refer to their organizationsrsquo mission regularly (notjust in a crisis) and use it to test managementrsquos ability to become and remainfocused Having the mission as part of every ordfboard packageordm would certainlyassist in this regard So would memorizing it in certain circumstancesDirectors also need to be assured that the mission is being achieved and thatthere is accountability for its implementation This in turn suggests that theremust be some sort of mechanism in place to measure the organizationrsquosprogress against the mission When actions such as these are taken directorswill help keep their organizationsrsquo mission alive not just for themselves but forthe rest of the gang as well (Please note though that additional comments onenhancing board awareness are being reserved for the following two sections)

Boardsrsquo involvement in the creation of their organizationrsquos missionThis paper began with the question of whether or not boards should beinvolved in the development of their organizationrsquos mission Unlike theprevious discussion on board awareness the regndings of Figure 3 show thatinvolvement by the board of directors in their organizationrsquos mission creationprocess is generally not a well accepted activity and generated the highestpercentage of responses in the category for ordfnot at allordm Whereas 80 percent ofthe respondents perceived their senior managements to be highly involved indeveloping their organizationsrsquo mission only 47 percent believed this to be thecase for the board Moreover informal conversations with established andsenior directors have suggested that board tradition typically dictates that therole of the board vis-aAacute -vis mission is for ordfmanagement to propose and for theboard to disposeordm The current regndings however would challenge thisviewpoint

Recall that the discussion in the previous section established the pivotal rolethat board awareness of the mission plays in terms of enhancing organizationalcommitment to the mission The results from path analysis in Figure 6however have demonstrated the critical importance of the boardrsquos involvement

Implications forcorporate

governance

375

in developing the mission if full board awareness of the mission is to beachieved Indeed of all the antecedent measures in the study it was boardinvolvement which obtained the strongest beta (b) score and was the No 1driver of board awareness Moreover the regndings of path analysis show thatwhile managementrsquos continuing awareness of the mission is also an importantconsideration in terms of securing organizational commitment to it thatawareness is produced almost equivalently from both their own plusmn and theboardrsquos plusmn involvement in mission development In other words it takes boththe boardrsquos and senior managementrsquos involvement to generate plusmn within theexecutive ranks plusmn the necessary and continuing knowledge and understanding(ie awareness) required to affect membersrsquo commitment to the missionInterestingly while management involvement by itself was also found to havea direct inmacruence on organizational commitment to the mission boardinvolvement did not Instead the boardrsquos impact on organizational commitmentto the mission is ordffeltordm through their ongoing awareness of it

Now this is a provocative notion since in the eyes of many individualsmanagement typically represents and provides to a greater extent than theboard the pragmatic ongoing and de facto strategic leadership of theorganization Yet the results from the current study would argue that directorsrsquoinvolvement in a missionrsquos development is a constructive activity on the part ofthe board and an important contributor to organizational success Shouldboards be involved in creating their organizationrsquos mission The answer wouldappear to be a deregnitive ordfyesordm

Directors must now see their role in terms of getting involved in thedevelopment of their organizationrsquos mission in order to raise awareness of it forthemselves and for management and raising awareness of the mission forthemselves in order to create and inmacruence higher levels of commitment to itthroughout the organization Consequently the regndings should be seen ashelping to put to rest the current debate concerning the nature and degree ofboard involvement in mission development Boards must get involved and it iswrong for them not to do so The research regndings thus represent for the regrsttime a true ordfbest practiceordm in corporate governance research The currentcorporate governance literature needs to be revised to take these results intoaccount

Mission communication and awarenessWhen the various techniques to communicate the mission were analyzed anumber of interesting observation were made To begin with when the relativeranking of the various communication methods (as shown in Figure 4) wasreviewed it appeared that there was no one technique which appeared to be theoverwhelming favourite The annual report appeared to be the most popular plusmnand perhaps the most obvious plusmn place for ensuring the widest possibledissemination of the mission among the various stakeholder populations After

JIC43

376

all anyone with a serious interest or ordfstakeordm in the organization would be sureto see the mission in this document The employee manual and posters werealso seen as logical choices for communicating the mission to employee groupsHowever no one technique achieved a usage rating greater than 67 percent andmost communication methods could be said to be used only to a moderateextent (mean score range 256-294) plusmn with the exception of advertisementswhich was clearly and indisputably the least favourite technique (mean score184)

It therefore came as somewhat of a surprise that when the communicationconstruct was created only three communication methods were found to bereliable and valid (ie company information kits company newsletters andother internal documents (such as company strategic and operating plansbudgets MBO and bonus criteria) Yet when these results were furtherdissected and contemplated they appeared to make considerable sense Foreffective communication to take place a ordfmessageordm must be sent receivedunderstood and remembered (Bart 2002) Accordingly while annual reportsmay be the most frequently used document for communicating anorganizationrsquos mission they are not the most effective This is because theyare often not read not widely read or not completely read As a result themission message while ordfsentordm is not necessarily received understood orremembered Similarly employee manuals may plusmn and probably should plusmncontain explicit reference to their organizationrsquos mission However how manytimes has anyone as employees ever referred to the mission by quoting it fromthe company manual Probably few if any at all

In contrast the communication techniques which appear to have a lastingand profound impact in terms of taking a mission message beyond its ordfsentpointordm are those which are designed to

create special attention (ie an information kit which is dedicated toexplaining the mission and can be used as a reference guide)

create ongoing attention and deal with short attention spans (egcompany newsletters) and

focus resource allocations (eg strategic and operational plans)

Thus when these documents are used most people pay attention Furthermorepath analysis conregrmed that both the board and management seem to belistening Indeed for the board the communication construct was the secondmost powerful inmacruencer in terms of its positive impact on board awareness ofthe mission Only board involvement with the mission was more importantHowever in terms of managementrsquos awareness results revealed that it was thecommunication construct which had the most profound impact plusmn almostdouble that of any other variables

These regndings are signiregcant They show that in terms of creatingcontinuing awareness on the part of boards with respect to their organizationsrsquo

Implications forcorporate

governance

377

missions it is necessary to regrst and foremost engage them actively andconstructively in its development Involvement begets awareness To keepthem continually aware various selected communication techniques then needto be deployed But those techniques will be impotent in terms of their effect ifthe board has not regrst made the commitment of time and energy to thedevelopment of the organizationrsquos mission There is no ordfViagraordm cure when thishas not taken place So boards need to understand how the timing andsequence of their awareness are created and sustained Hopefully this researchhelps to establish the proper path to be followed

The observations with respect to management awareness of the mission arealso intriguing As with the case of the board there is no question thatmanagement involvement in developing the mission produces a certain level ofongoing awareness Similarly one would expect that when the board is alsoinvolved it acts as a strong signal to management that the mission is moreimportant than might otherwise be found in organizations where the boardignores it When combined managementrsquos involvement and awareness have atremendous effect on the commitment that organizational members have withrespect to their mission But to sustain managementrsquos interest in the missionand keep their interest in the mission robust the regndings show that it is thecommunication construct plusmn with its three critical communication techniques plusmnwhich has the greatest impact Boards and their managements would do well toensure that these techniques are being regularly deployed if they are seriouslyinterested in making sure that senior executives do not lose sight of the missionor lose enthusiasm for it Relentless repetition of the mission message isprobably still the only way to ensure that the message is remembered plusmn the lastbut essential component of the rules for effective communication (Bart 2002)

ConclusionsIf there is one regnal thought it is this boards need to be more involved indeveloping plusmn and be continuously aware of plusmn their organizationrsquos mission Boardinvolvement matters So too does their awareness For too long there has been alack of clear guidance with respect to the boardrsquos role in mission The extantliterature is contradictory and confusing These results therefore represent asigniregcant and profound milestone for the literature on corporate governanceThe results herein demonstrate and prove ordfbest practiceordm while challengingmany of the assumptions underlying current board practices in this provocativearea Accordingly it is recommended that board involvement with a missionrsquosdevelopment plusmn and continuous awareness of it plusmn need to be both recognizedformally in an organizationrsquos governance structure (eg board charters) andproposed as an amendment to most governance codes currently in force It is alsorecommended that given this new responsibility for mission developmentdirectors need to be sufregciently trained in strategy development so that they canwith management develop a shared view on what the future of the organization

JIC43

378

should be and why it exists However to do so effectively both boards andmanagement need to develop a common language and strategic analysisframework Recent developments at the newly formed Directors College (a jointventure of the DeGroote Business School at McMaster University and theConference Board of Canada (see wwwthedirectorscollegecom)) should helpboards and their managements considerably in this regard

References

Arnold HJ and Feldman DC (1981) ordfSocial desirability response bias in self-report choicesituationsordm Academy of Management Journal Vol 24 pp 377-85

Baetz MC and Bart CK (1996) ordfDeveloping mission statements which workordm Long RangePlanning Vol 29 No 4 pp 524-31

Barclay DW Higgins C and Thompson R (1995) ordfThe partial least squares (PLS) approach tocausal modeling personal computer adaptation and use as illustrationordm TechnologyStudies Vol 2 No 2 pp 285-309

Bart CK (1997a) ordfSex lies and mission statementsordm Business Horizons November-Decemberpp 9-18

Bart CK (1997b) ordfIndustrial regrms and the power of missionordm Industrial MarketingManagement Vol 26 pp 371-83

Bart CK (1997c) ordfMission possibleordm CA Magazine September pp 33-4

Bart CK (1998a) ordfA comparison of mission statements and their rationales in innovative andnon-innovative regrmsordm International Journal of Technology Management Vol 16 No 1-3pp 64-77

Bart CK (1998b) ordfMission mattersordm CA Magazine March pp 31-41

Bart CK (1999a) ordfMaking mission statements countordm CA Magazine March pp 37-47

Bart CK (1999b) ordfAccepting the missionordm CA Magazine August pp 33-4

Bart CK (2000) ordfLasting inspirationordm CA Magazine May pp 49-50

Bart CK (2001a) ordfMeasuring the mission effect in human intellectual capitalordm Journal ofIntellectual Capital Research Vol 2 No 3 pp 320-30

Bart CK (2001b) ordfWhorsquos running the storeordm CA Magazine August pp 22-7

Bart CK (2002) A Tale of Two Employees Corporate Missions Inc Press Hamilton

Bart CK (2003a) ordfInnovation mission statements and learningordm International Journal ofInnovation and Learning forthcoming

Bart CK (2003b) ordfGood governance and intellectual capitalordm paper presented at the 24thMcMaster World Congress on the Management of Intellectual Capital and ElectronicCommerce Hamilton

Bart CK and Baetz MJ (1998) ordfThe relationship between mission statements and regrmperformance an exploratory studyordm Journal of Management Studies Vol 36 No 6pp 823-53

Bart CK and Tabone JC (1999) ordfMission statement content and hospital performance in theCanadian not-for-proregt health-care sectorordm Health Care Management Review Vol 24 No 3pp 18-29

Bart CK Bontis N and Taggar S (2001) ordfA model of mission statements and regrmperformanceordm Management Decision Vol 39 No 1 pp 19-35

Implications forcorporate

governance

379

of six antecedent constructs leading to the endogenous construct Thereforethe minimum sample requirements become 9 3 10 or 90 PLS is an adequatetechnique for this study since the sample size is 339 respondents All of theitems germane to this study were therefore assigned to their respective scalesusing PLS as suggested by Barclay et al (1995) and Hulland (1999)

Reliability and validityThe survey items and constructs were subjected to various psychometricevaluations to conregrm reliability and validity A Cronbach alpharsquos (a) measurewas used to test the reliability of the communication technique construct whichcontained nine items The alpha (a) value of 0839 is above the minimumthreshold of 07 as supported by Nunnally (1978) Shimp and Sharma (1987)suggest that items have loading values greater than 07 to ensure constructvalidity This procedure is also supported by Carmines and Zeller (1979) andHulland (1999) In this case only three of the nine items had loading valuesgreater than 07 and were therefore removed prior to the subsequent modellingexercise

Interestingly the three remaining communication techniques that were bothreliable and valid were not necessarily those most often used by therespondents Company information kits (l = 0732) newsletters (l = 0732)and internal documents (l = 0702) were used only by 596 531 and 574percent of respondents Conversely the most often used communicationtechnique of annual reports was used by two-thirds (676 percent) of therespondents Yet its construct validity (l = 0598) was below the thresholddenoting a suspiciously absent nomological connection to the board andmanagement awareness of mission statements (see Figure 5)

Similarly a latent performance construct was created using two of theoutcome measures identireged earlier plusmn both of which were found to be bothvalid and reliable The regrst item was overall satisfaction with the regnancial

Figure 5Construct validity and

reliability ofcommunication

technique

Implications forcorporate

governance

371

performance of the organization (l = 0837) and the second item was howinnovative the organization was (l = 0874)

Research limitationsWith respect to the present results a number of caveats pertaining to commonmethod single-respondent and social desirability biases should beacknowledged To address the possibility of common method bias aHermanrsquos one-factor test on the questionnaire measurement items wasconducted (Konrad and Linnehan 1995 Scott and Bruce 1994) A principalcomponents factor analysis yielded four factors with eigenvalues greater than10 that accounted for 51 percent of the variance Since several factors asopposed to one single factor were identireged and since the regrst factor did notaccount for the majority of the variance (only 29 percent) a substantial amountof common method variance does not appear to be present (Podsakoff andOrgan 1986) Nevertheless the presence of common method problems cannotbe fully discarded

An important methodological imperative for this study was for eachrespondent to be highly familiar with the mission statement and its resultantorganizational effect In this respect the study was considered satisfactorysince the majority of respondents were top executives in their respectiveorganizations Given the singularity and specialized knowledge associatedwith these informants a single-informant approach was deemed best and wastherefore used We believed that less knowledgeable informants would result inless accurate data

Whereas survey data are sometimes subject to social desirability bias(Arnold and Feldman 1981 Podsakoff and Organ 1986) we do not perceivesuch bias to be a major concern for this study The topic of investigationalthough strategic was not thought to be so highly sensitive as to be likely toprevent responses that would present the respondent or organization in anunfavourable light In addition much of the information obtained was notdeemed highly conregdential However the occurrence of such bias cannot betotally ruled out

ResultsFigure 6 shows the regnal specireged PLS structural equation model Each pathand beta coefregcient displayed are both substantive and signiregcant Theexplanatory power of the model is relatively high for survey research at 334percent and denotes a strong conregdence in the explanation of performancevariance attributable to mission communication involvement awareness andcommitment (see Figure 6)

Missions communication technique and awareness (b1 and b2)The beta path (b1) coefregcient from communication technique to boardawareness is 0362 while the beta path (b2) from communication technique to

JIC43

372

management awareness is 0294 These results support the notion that theselected mission communication techniques aid in raising awareness of themission statement for both the board members and senior managementFurthermore the magnitude of this impact is relatively higher for boards Thecommunication technique construct however was not found to have any directimpact on the measure for member commitment to the mission

Involvement and awareness (b3 b4 and b5)The beta path (b3) coefregcient from board involvement to board awareness is0441 while the beta path (b4) from board involvement to managementawareness is 0128 These results support the notion that involvement with themission development process by the board is important in raising the boardrsquosawareness of the mission statement Similarly when the board is involved indeveloping their organizationrsquos mission it positively impacts managementrsquoscontinuing and current awareness of the mission plusmn though this latterrelationship is signiregcantly weaker

In contrast the beta path (b5) coefregcient from management involvement tomanagement awareness was found to be just 0158 while the beta path frommanagement involvement to board awareness was neither substantive norsigniregcant Therefore while managementrsquos involvement in the missiondevelopment process appears to encourage their continuing awareness of themission it does not appear to have any effect on the boardrsquos current awareness

Figure 6PLS structural

equation model

Implications forcorporate

governance

373

Antecedents to commitment (b6 b7 and b8)The beta path (b6) coefregcient from management involvement in missiondevelopment to membersrsquo commitment to the mission was established to be0139 while a beta path from either board involvement to commitment ormanagement involvement to board awareness did not exist What this suggestsis that while the commitment of an organizationrsquos members to the missionstatement can be directly supported by the managementrsquos involvement in themission development process the boardrsquos involvement acts as an antecedent tocommitment only indirectly and only through the process of raising its ownawareness (b3 and b4) Following that there are substantive and signiregcantpaths from both board awareness (b7 = 0150) and management awareness(b8 = 0173) to membersrsquo commitment to the mission

Commitment to performance (b9)The beta path (b9) coefregcient from individualsrsquo commitment to the missionstatement and performance was 0583 This is not at all surprising since itreplicates the regndings of a previous study by Bart et al (2001) But the regndingscontinue to underscore the tremendous impact and important role that membercommitment to the mission continues to have and to play respectively in termsof enhancing an organizationrsquos performance

DiscussionThere are a number of important and signiregcant regndings which havematerialized from the current study

Boardsrsquo awareness of their organizationrsquos missionThe regndings from Figure 3 suggest that directors and their boards appear to berelatively aware of their organizationrsquos mission plusmn though it was somewhatlower than managementrsquos Only a small percentage of respondents indicatedthat their board was ordfsomewhat awareordm of the mission and very few stated thatthere was no awareness at all Nevertheless for the most part there were still alarge number of directors who were not highly or fully aware of theirorganizationrsquos mission Therefore the question remains should they be In thisregard path analysis results are unequivocal Continuing board awareness ofthe mission plusmn whereby directors ordfknow understand and remember themissionordm plusmn is an important and signiregcant contributor to having individualsthroughout the organization commit to it The more aware the boards are oftheir organizationrsquos mission the greater their organizational membersrsquocommitment to it will be Moreover directorsrsquo awareness of the mission isequivalent in impact (with respect to membersrsquo commitment) in terms of bothmanagementrsquos awareness of the mission and managementrsquos involvement withthe missionrsquos development Consequently boards cannot afford to becomplacent when it comes to their organizationsrsquo mission and theircontinuing and current awareness of it

JIC43

374

This is a thought-provoking observation It suggests that the days of boardsbeing entertained every now and then with PowerPoint presentations of thecompany mission while the lobster sandwiches are passed around are overBoards must accept that the mission statement is a valuable and important toolin helping to set the strategic direction and positioning of the organization Itshould be the corner-stone of every organizationrsquos strategic plan Given thisimportance it cannot be given short shrift once it has been developed andintroduced to the organization Because every mission also needs thecontinuing commitment and support of all the organizational members if it is tobe ultimately achieved directors have an ongoing responsibility to keepthemselves aware of it as well

One obvious way in which they can help do this is to make sure that themission statement is a part of each board meeting and a part of every boarddiscussion Directors must refer to their organizationsrsquo mission regularly (notjust in a crisis) and use it to test managementrsquos ability to become and remainfocused Having the mission as part of every ordfboard packageordm would certainlyassist in this regard So would memorizing it in certain circumstancesDirectors also need to be assured that the mission is being achieved and thatthere is accountability for its implementation This in turn suggests that theremust be some sort of mechanism in place to measure the organizationrsquosprogress against the mission When actions such as these are taken directorswill help keep their organizationsrsquo mission alive not just for themselves but forthe rest of the gang as well (Please note though that additional comments onenhancing board awareness are being reserved for the following two sections)

Boardsrsquo involvement in the creation of their organizationrsquos missionThis paper began with the question of whether or not boards should beinvolved in the development of their organizationrsquos mission Unlike theprevious discussion on board awareness the regndings of Figure 3 show thatinvolvement by the board of directors in their organizationrsquos mission creationprocess is generally not a well accepted activity and generated the highestpercentage of responses in the category for ordfnot at allordm Whereas 80 percent ofthe respondents perceived their senior managements to be highly involved indeveloping their organizationsrsquo mission only 47 percent believed this to be thecase for the board Moreover informal conversations with established andsenior directors have suggested that board tradition typically dictates that therole of the board vis-aAacute -vis mission is for ordfmanagement to propose and for theboard to disposeordm The current regndings however would challenge thisviewpoint

Recall that the discussion in the previous section established the pivotal rolethat board awareness of the mission plays in terms of enhancing organizationalcommitment to the mission The results from path analysis in Figure 6however have demonstrated the critical importance of the boardrsquos involvement

Implications forcorporate

governance

375

in developing the mission if full board awareness of the mission is to beachieved Indeed of all the antecedent measures in the study it was boardinvolvement which obtained the strongest beta (b) score and was the No 1driver of board awareness Moreover the regndings of path analysis show thatwhile managementrsquos continuing awareness of the mission is also an importantconsideration in terms of securing organizational commitment to it thatawareness is produced almost equivalently from both their own plusmn and theboardrsquos plusmn involvement in mission development In other words it takes boththe boardrsquos and senior managementrsquos involvement to generate plusmn within theexecutive ranks plusmn the necessary and continuing knowledge and understanding(ie awareness) required to affect membersrsquo commitment to the missionInterestingly while management involvement by itself was also found to havea direct inmacruence on organizational commitment to the mission boardinvolvement did not Instead the boardrsquos impact on organizational commitmentto the mission is ordffeltordm through their ongoing awareness of it

Now this is a provocative notion since in the eyes of many individualsmanagement typically represents and provides to a greater extent than theboard the pragmatic ongoing and de facto strategic leadership of theorganization Yet the results from the current study would argue that directorsrsquoinvolvement in a missionrsquos development is a constructive activity on the part ofthe board and an important contributor to organizational success Shouldboards be involved in creating their organizationrsquos mission The answer wouldappear to be a deregnitive ordfyesordm

Directors must now see their role in terms of getting involved in thedevelopment of their organizationrsquos mission in order to raise awareness of it forthemselves and for management and raising awareness of the mission forthemselves in order to create and inmacruence higher levels of commitment to itthroughout the organization Consequently the regndings should be seen ashelping to put to rest the current debate concerning the nature and degree ofboard involvement in mission development Boards must get involved and it iswrong for them not to do so The research regndings thus represent for the regrsttime a true ordfbest practiceordm in corporate governance research The currentcorporate governance literature needs to be revised to take these results intoaccount

Mission communication and awarenessWhen the various techniques to communicate the mission were analyzed anumber of interesting observation were made To begin with when the relativeranking of the various communication methods (as shown in Figure 4) wasreviewed it appeared that there was no one technique which appeared to be theoverwhelming favourite The annual report appeared to be the most popular plusmnand perhaps the most obvious plusmn place for ensuring the widest possibledissemination of the mission among the various stakeholder populations After

JIC43

376

all anyone with a serious interest or ordfstakeordm in the organization would be sureto see the mission in this document The employee manual and posters werealso seen as logical choices for communicating the mission to employee groupsHowever no one technique achieved a usage rating greater than 67 percent andmost communication methods could be said to be used only to a moderateextent (mean score range 256-294) plusmn with the exception of advertisementswhich was clearly and indisputably the least favourite technique (mean score184)

It therefore came as somewhat of a surprise that when the communicationconstruct was created only three communication methods were found to bereliable and valid (ie company information kits company newsletters andother internal documents (such as company strategic and operating plansbudgets MBO and bonus criteria) Yet when these results were furtherdissected and contemplated they appeared to make considerable sense Foreffective communication to take place a ordfmessageordm must be sent receivedunderstood and remembered (Bart 2002) Accordingly while annual reportsmay be the most frequently used document for communicating anorganizationrsquos mission they are not the most effective This is because theyare often not read not widely read or not completely read As a result themission message while ordfsentordm is not necessarily received understood orremembered Similarly employee manuals may plusmn and probably should plusmncontain explicit reference to their organizationrsquos mission However how manytimes has anyone as employees ever referred to the mission by quoting it fromthe company manual Probably few if any at all

In contrast the communication techniques which appear to have a lastingand profound impact in terms of taking a mission message beyond its ordfsentpointordm are those which are designed to

create special attention (ie an information kit which is dedicated toexplaining the mission and can be used as a reference guide)

create ongoing attention and deal with short attention spans (egcompany newsletters) and

focus resource allocations (eg strategic and operational plans)

Thus when these documents are used most people pay attention Furthermorepath analysis conregrmed that both the board and management seem to belistening Indeed for the board the communication construct was the secondmost powerful inmacruencer in terms of its positive impact on board awareness ofthe mission Only board involvement with the mission was more importantHowever in terms of managementrsquos awareness results revealed that it was thecommunication construct which had the most profound impact plusmn almostdouble that of any other variables

These regndings are signiregcant They show that in terms of creatingcontinuing awareness on the part of boards with respect to their organizationsrsquo

Implications forcorporate

governance

377

missions it is necessary to regrst and foremost engage them actively andconstructively in its development Involvement begets awareness To keepthem continually aware various selected communication techniques then needto be deployed But those techniques will be impotent in terms of their effect ifthe board has not regrst made the commitment of time and energy to thedevelopment of the organizationrsquos mission There is no ordfViagraordm cure when thishas not taken place So boards need to understand how the timing andsequence of their awareness are created and sustained Hopefully this researchhelps to establish the proper path to be followed

The observations with respect to management awareness of the mission arealso intriguing As with the case of the board there is no question thatmanagement involvement in developing the mission produces a certain level ofongoing awareness Similarly one would expect that when the board is alsoinvolved it acts as a strong signal to management that the mission is moreimportant than might otherwise be found in organizations where the boardignores it When combined managementrsquos involvement and awareness have atremendous effect on the commitment that organizational members have withrespect to their mission But to sustain managementrsquos interest in the missionand keep their interest in the mission robust the regndings show that it is thecommunication construct plusmn with its three critical communication techniques plusmnwhich has the greatest impact Boards and their managements would do well toensure that these techniques are being regularly deployed if they are seriouslyinterested in making sure that senior executives do not lose sight of the missionor lose enthusiasm for it Relentless repetition of the mission message isprobably still the only way to ensure that the message is remembered plusmn the lastbut essential component of the rules for effective communication (Bart 2002)

ConclusionsIf there is one regnal thought it is this boards need to be more involved indeveloping plusmn and be continuously aware of plusmn their organizationrsquos mission Boardinvolvement matters So too does their awareness For too long there has been alack of clear guidance with respect to the boardrsquos role in mission The extantliterature is contradictory and confusing These results therefore represent asigniregcant and profound milestone for the literature on corporate governanceThe results herein demonstrate and prove ordfbest practiceordm while challengingmany of the assumptions underlying current board practices in this provocativearea Accordingly it is recommended that board involvement with a missionrsquosdevelopment plusmn and continuous awareness of it plusmn need to be both recognizedformally in an organizationrsquos governance structure (eg board charters) andproposed as an amendment to most governance codes currently in force It is alsorecommended that given this new responsibility for mission developmentdirectors need to be sufregciently trained in strategy development so that they canwith management develop a shared view on what the future of the organization

JIC43

378

should be and why it exists However to do so effectively both boards andmanagement need to develop a common language and strategic analysisframework Recent developments at the newly formed Directors College (a jointventure of the DeGroote Business School at McMaster University and theConference Board of Canada (see wwwthedirectorscollegecom)) should helpboards and their managements considerably in this regard

References

Arnold HJ and Feldman DC (1981) ordfSocial desirability response bias in self-report choicesituationsordm Academy of Management Journal Vol 24 pp 377-85

Baetz MC and Bart CK (1996) ordfDeveloping mission statements which workordm Long RangePlanning Vol 29 No 4 pp 524-31

Barclay DW Higgins C and Thompson R (1995) ordfThe partial least squares (PLS) approach tocausal modeling personal computer adaptation and use as illustrationordm TechnologyStudies Vol 2 No 2 pp 285-309

Bart CK (1997a) ordfSex lies and mission statementsordm Business Horizons November-Decemberpp 9-18

Bart CK (1997b) ordfIndustrial regrms and the power of missionordm Industrial MarketingManagement Vol 26 pp 371-83

Bart CK (1997c) ordfMission possibleordm CA Magazine September pp 33-4

Bart CK (1998a) ordfA comparison of mission statements and their rationales in innovative andnon-innovative regrmsordm International Journal of Technology Management Vol 16 No 1-3pp 64-77

Bart CK (1998b) ordfMission mattersordm CA Magazine March pp 31-41

Bart CK (1999a) ordfMaking mission statements countordm CA Magazine March pp 37-47

Bart CK (1999b) ordfAccepting the missionordm CA Magazine August pp 33-4

Bart CK (2000) ordfLasting inspirationordm CA Magazine May pp 49-50

Bart CK (2001a) ordfMeasuring the mission effect in human intellectual capitalordm Journal ofIntellectual Capital Research Vol 2 No 3 pp 320-30

Bart CK (2001b) ordfWhorsquos running the storeordm CA Magazine August pp 22-7

Bart CK (2002) A Tale of Two Employees Corporate Missions Inc Press Hamilton

Bart CK (2003a) ordfInnovation mission statements and learningordm International Journal ofInnovation and Learning forthcoming

Bart CK (2003b) ordfGood governance and intellectual capitalordm paper presented at the 24thMcMaster World Congress on the Management of Intellectual Capital and ElectronicCommerce Hamilton

Bart CK and Baetz MJ (1998) ordfThe relationship between mission statements and regrmperformance an exploratory studyordm Journal of Management Studies Vol 36 No 6pp 823-53

Bart CK and Tabone JC (1999) ordfMission statement content and hospital performance in theCanadian not-for-proregt health-care sectorordm Health Care Management Review Vol 24 No 3pp 18-29

Bart CK Bontis N and Taggar S (2001) ordfA model of mission statements and regrmperformanceordm Management Decision Vol 39 No 1 pp 19-35

Implications forcorporate

governance

379

performance of the organization (l = 0837) and the second item was howinnovative the organization was (l = 0874)

Research limitationsWith respect to the present results a number of caveats pertaining to commonmethod single-respondent and social desirability biases should beacknowledged To address the possibility of common method bias aHermanrsquos one-factor test on the questionnaire measurement items wasconducted (Konrad and Linnehan 1995 Scott and Bruce 1994) A principalcomponents factor analysis yielded four factors with eigenvalues greater than10 that accounted for 51 percent of the variance Since several factors asopposed to one single factor were identireged and since the regrst factor did notaccount for the majority of the variance (only 29 percent) a substantial amountof common method variance does not appear to be present (Podsakoff andOrgan 1986) Nevertheless the presence of common method problems cannotbe fully discarded

An important methodological imperative for this study was for eachrespondent to be highly familiar with the mission statement and its resultantorganizational effect In this respect the study was considered satisfactorysince the majority of respondents were top executives in their respectiveorganizations Given the singularity and specialized knowledge associatedwith these informants a single-informant approach was deemed best and wastherefore used We believed that less knowledgeable informants would result inless accurate data

Whereas survey data are sometimes subject to social desirability bias(Arnold and Feldman 1981 Podsakoff and Organ 1986) we do not perceivesuch bias to be a major concern for this study The topic of investigationalthough strategic was not thought to be so highly sensitive as to be likely toprevent responses that would present the respondent or organization in anunfavourable light In addition much of the information obtained was notdeemed highly conregdential However the occurrence of such bias cannot betotally ruled out

ResultsFigure 6 shows the regnal specireged PLS structural equation model Each pathand beta coefregcient displayed are both substantive and signiregcant Theexplanatory power of the model is relatively high for survey research at 334percent and denotes a strong conregdence in the explanation of performancevariance attributable to mission communication involvement awareness andcommitment (see Figure 6)

Missions communication technique and awareness (b1 and b2)The beta path (b1) coefregcient from communication technique to boardawareness is 0362 while the beta path (b2) from communication technique to

JIC43

372

management awareness is 0294 These results support the notion that theselected mission communication techniques aid in raising awareness of themission statement for both the board members and senior managementFurthermore the magnitude of this impact is relatively higher for boards Thecommunication technique construct however was not found to have any directimpact on the measure for member commitment to the mission

Involvement and awareness (b3 b4 and b5)The beta path (b3) coefregcient from board involvement to board awareness is0441 while the beta path (b4) from board involvement to managementawareness is 0128 These results support the notion that involvement with themission development process by the board is important in raising the boardrsquosawareness of the mission statement Similarly when the board is involved indeveloping their organizationrsquos mission it positively impacts managementrsquoscontinuing and current awareness of the mission plusmn though this latterrelationship is signiregcantly weaker

In contrast the beta path (b5) coefregcient from management involvement tomanagement awareness was found to be just 0158 while the beta path frommanagement involvement to board awareness was neither substantive norsigniregcant Therefore while managementrsquos involvement in the missiondevelopment process appears to encourage their continuing awareness of themission it does not appear to have any effect on the boardrsquos current awareness

Figure 6PLS structural

equation model

Implications forcorporate

governance

373

Antecedents to commitment (b6 b7 and b8)The beta path (b6) coefregcient from management involvement in missiondevelopment to membersrsquo commitment to the mission was established to be0139 while a beta path from either board involvement to commitment ormanagement involvement to board awareness did not exist What this suggestsis that while the commitment of an organizationrsquos members to the missionstatement can be directly supported by the managementrsquos involvement in themission development process the boardrsquos involvement acts as an antecedent tocommitment only indirectly and only through the process of raising its ownawareness (b3 and b4) Following that there are substantive and signiregcantpaths from both board awareness (b7 = 0150) and management awareness(b8 = 0173) to membersrsquo commitment to the mission

Commitment to performance (b9)The beta path (b9) coefregcient from individualsrsquo commitment to the missionstatement and performance was 0583 This is not at all surprising since itreplicates the regndings of a previous study by Bart et al (2001) But the regndingscontinue to underscore the tremendous impact and important role that membercommitment to the mission continues to have and to play respectively in termsof enhancing an organizationrsquos performance

DiscussionThere are a number of important and signiregcant regndings which havematerialized from the current study

Boardsrsquo awareness of their organizationrsquos missionThe regndings from Figure 3 suggest that directors and their boards appear to berelatively aware of their organizationrsquos mission plusmn though it was somewhatlower than managementrsquos Only a small percentage of respondents indicatedthat their board was ordfsomewhat awareordm of the mission and very few stated thatthere was no awareness at all Nevertheless for the most part there were still alarge number of directors who were not highly or fully aware of theirorganizationrsquos mission Therefore the question remains should they be In thisregard path analysis results are unequivocal Continuing board awareness ofthe mission plusmn whereby directors ordfknow understand and remember themissionordm plusmn is an important and signiregcant contributor to having individualsthroughout the organization commit to it The more aware the boards are oftheir organizationrsquos mission the greater their organizational membersrsquocommitment to it will be Moreover directorsrsquo awareness of the mission isequivalent in impact (with respect to membersrsquo commitment) in terms of bothmanagementrsquos awareness of the mission and managementrsquos involvement withthe missionrsquos development Consequently boards cannot afford to becomplacent when it comes to their organizationsrsquo mission and theircontinuing and current awareness of it

JIC43

374

This is a thought-provoking observation It suggests that the days of boardsbeing entertained every now and then with PowerPoint presentations of thecompany mission while the lobster sandwiches are passed around are overBoards must accept that the mission statement is a valuable and important toolin helping to set the strategic direction and positioning of the organization Itshould be the corner-stone of every organizationrsquos strategic plan Given thisimportance it cannot be given short shrift once it has been developed andintroduced to the organization Because every mission also needs thecontinuing commitment and support of all the organizational members if it is tobe ultimately achieved directors have an ongoing responsibility to keepthemselves aware of it as well

One obvious way in which they can help do this is to make sure that themission statement is a part of each board meeting and a part of every boarddiscussion Directors must refer to their organizationsrsquo mission regularly (notjust in a crisis) and use it to test managementrsquos ability to become and remainfocused Having the mission as part of every ordfboard packageordm would certainlyassist in this regard So would memorizing it in certain circumstancesDirectors also need to be assured that the mission is being achieved and thatthere is accountability for its implementation This in turn suggests that theremust be some sort of mechanism in place to measure the organizationrsquosprogress against the mission When actions such as these are taken directorswill help keep their organizationsrsquo mission alive not just for themselves but forthe rest of the gang as well (Please note though that additional comments onenhancing board awareness are being reserved for the following two sections)

Boardsrsquo involvement in the creation of their organizationrsquos missionThis paper began with the question of whether or not boards should beinvolved in the development of their organizationrsquos mission Unlike theprevious discussion on board awareness the regndings of Figure 3 show thatinvolvement by the board of directors in their organizationrsquos mission creationprocess is generally not a well accepted activity and generated the highestpercentage of responses in the category for ordfnot at allordm Whereas 80 percent ofthe respondents perceived their senior managements to be highly involved indeveloping their organizationsrsquo mission only 47 percent believed this to be thecase for the board Moreover informal conversations with established andsenior directors have suggested that board tradition typically dictates that therole of the board vis-aAacute -vis mission is for ordfmanagement to propose and for theboard to disposeordm The current regndings however would challenge thisviewpoint

Recall that the discussion in the previous section established the pivotal rolethat board awareness of the mission plays in terms of enhancing organizationalcommitment to the mission The results from path analysis in Figure 6however have demonstrated the critical importance of the boardrsquos involvement

Implications forcorporate

governance

375

in developing the mission if full board awareness of the mission is to beachieved Indeed of all the antecedent measures in the study it was boardinvolvement which obtained the strongest beta (b) score and was the No 1driver of board awareness Moreover the regndings of path analysis show thatwhile managementrsquos continuing awareness of the mission is also an importantconsideration in terms of securing organizational commitment to it thatawareness is produced almost equivalently from both their own plusmn and theboardrsquos plusmn involvement in mission development In other words it takes boththe boardrsquos and senior managementrsquos involvement to generate plusmn within theexecutive ranks plusmn the necessary and continuing knowledge and understanding(ie awareness) required to affect membersrsquo commitment to the missionInterestingly while management involvement by itself was also found to havea direct inmacruence on organizational commitment to the mission boardinvolvement did not Instead the boardrsquos impact on organizational commitmentto the mission is ordffeltordm through their ongoing awareness of it

Now this is a provocative notion since in the eyes of many individualsmanagement typically represents and provides to a greater extent than theboard the pragmatic ongoing and de facto strategic leadership of theorganization Yet the results from the current study would argue that directorsrsquoinvolvement in a missionrsquos development is a constructive activity on the part ofthe board and an important contributor to organizational success Shouldboards be involved in creating their organizationrsquos mission The answer wouldappear to be a deregnitive ordfyesordm

Directors must now see their role in terms of getting involved in thedevelopment of their organizationrsquos mission in order to raise awareness of it forthemselves and for management and raising awareness of the mission forthemselves in order to create and inmacruence higher levels of commitment to itthroughout the organization Consequently the regndings should be seen ashelping to put to rest the current debate concerning the nature and degree ofboard involvement in mission development Boards must get involved and it iswrong for them not to do so The research regndings thus represent for the regrsttime a true ordfbest practiceordm in corporate governance research The currentcorporate governance literature needs to be revised to take these results intoaccount

Mission communication and awarenessWhen the various techniques to communicate the mission were analyzed anumber of interesting observation were made To begin with when the relativeranking of the various communication methods (as shown in Figure 4) wasreviewed it appeared that there was no one technique which appeared to be theoverwhelming favourite The annual report appeared to be the most popular plusmnand perhaps the most obvious plusmn place for ensuring the widest possibledissemination of the mission among the various stakeholder populations After

JIC43

376

all anyone with a serious interest or ordfstakeordm in the organization would be sureto see the mission in this document The employee manual and posters werealso seen as logical choices for communicating the mission to employee groupsHowever no one technique achieved a usage rating greater than 67 percent andmost communication methods could be said to be used only to a moderateextent (mean score range 256-294) plusmn with the exception of advertisementswhich was clearly and indisputably the least favourite technique (mean score184)

It therefore came as somewhat of a surprise that when the communicationconstruct was created only three communication methods were found to bereliable and valid (ie company information kits company newsletters andother internal documents (such as company strategic and operating plansbudgets MBO and bonus criteria) Yet when these results were furtherdissected and contemplated they appeared to make considerable sense Foreffective communication to take place a ordfmessageordm must be sent receivedunderstood and remembered (Bart 2002) Accordingly while annual reportsmay be the most frequently used document for communicating anorganizationrsquos mission they are not the most effective This is because theyare often not read not widely read or not completely read As a result themission message while ordfsentordm is not necessarily received understood orremembered Similarly employee manuals may plusmn and probably should plusmncontain explicit reference to their organizationrsquos mission However how manytimes has anyone as employees ever referred to the mission by quoting it fromthe company manual Probably few if any at all

In contrast the communication techniques which appear to have a lastingand profound impact in terms of taking a mission message beyond its ordfsentpointordm are those which are designed to

create special attention (ie an information kit which is dedicated toexplaining the mission and can be used as a reference guide)

create ongoing attention and deal with short attention spans (egcompany newsletters) and

focus resource allocations (eg strategic and operational plans)

Thus when these documents are used most people pay attention Furthermorepath analysis conregrmed that both the board and management seem to belistening Indeed for the board the communication construct was the secondmost powerful inmacruencer in terms of its positive impact on board awareness ofthe mission Only board involvement with the mission was more importantHowever in terms of managementrsquos awareness results revealed that it was thecommunication construct which had the most profound impact plusmn almostdouble that of any other variables

These regndings are signiregcant They show that in terms of creatingcontinuing awareness on the part of boards with respect to their organizationsrsquo

Implications forcorporate

governance

377

missions it is necessary to regrst and foremost engage them actively andconstructively in its development Involvement begets awareness To keepthem continually aware various selected communication techniques then needto be deployed But those techniques will be impotent in terms of their effect ifthe board has not regrst made the commitment of time and energy to thedevelopment of the organizationrsquos mission There is no ordfViagraordm cure when thishas not taken place So boards need to understand how the timing andsequence of their awareness are created and sustained Hopefully this researchhelps to establish the proper path to be followed

The observations with respect to management awareness of the mission arealso intriguing As with the case of the board there is no question thatmanagement involvement in developing the mission produces a certain level ofongoing awareness Similarly one would expect that when the board is alsoinvolved it acts as a strong signal to management that the mission is moreimportant than might otherwise be found in organizations where the boardignores it When combined managementrsquos involvement and awareness have atremendous effect on the commitment that organizational members have withrespect to their mission But to sustain managementrsquos interest in the missionand keep their interest in the mission robust the regndings show that it is thecommunication construct plusmn with its three critical communication techniques plusmnwhich has the greatest impact Boards and their managements would do well toensure that these techniques are being regularly deployed if they are seriouslyinterested in making sure that senior executives do not lose sight of the missionor lose enthusiasm for it Relentless repetition of the mission message isprobably still the only way to ensure that the message is remembered plusmn the lastbut essential component of the rules for effective communication (Bart 2002)

ConclusionsIf there is one regnal thought it is this boards need to be more involved indeveloping plusmn and be continuously aware of plusmn their organizationrsquos mission Boardinvolvement matters So too does their awareness For too long there has been alack of clear guidance with respect to the boardrsquos role in mission The extantliterature is contradictory and confusing These results therefore represent asigniregcant and profound milestone for the literature on corporate governanceThe results herein demonstrate and prove ordfbest practiceordm while challengingmany of the assumptions underlying current board practices in this provocativearea Accordingly it is recommended that board involvement with a missionrsquosdevelopment plusmn and continuous awareness of it plusmn need to be both recognizedformally in an organizationrsquos governance structure (eg board charters) andproposed as an amendment to most governance codes currently in force It is alsorecommended that given this new responsibility for mission developmentdirectors need to be sufregciently trained in strategy development so that they canwith management develop a shared view on what the future of the organization

JIC43

378

should be and why it exists However to do so effectively both boards andmanagement need to develop a common language and strategic analysisframework Recent developments at the newly formed Directors College (a jointventure of the DeGroote Business School at McMaster University and theConference Board of Canada (see wwwthedirectorscollegecom)) should helpboards and their managements considerably in this regard

References

Arnold HJ and Feldman DC (1981) ordfSocial desirability response bias in self-report choicesituationsordm Academy of Management Journal Vol 24 pp 377-85

Baetz MC and Bart CK (1996) ordfDeveloping mission statements which workordm Long RangePlanning Vol 29 No 4 pp 524-31

Barclay DW Higgins C and Thompson R (1995) ordfThe partial least squares (PLS) approach tocausal modeling personal computer adaptation and use as illustrationordm TechnologyStudies Vol 2 No 2 pp 285-309

Bart CK (1997a) ordfSex lies and mission statementsordm Business Horizons November-Decemberpp 9-18

Bart CK (1997b) ordfIndustrial regrms and the power of missionordm Industrial MarketingManagement Vol 26 pp 371-83

Bart CK (1997c) ordfMission possibleordm CA Magazine September pp 33-4

Bart CK (1998a) ordfA comparison of mission statements and their rationales in innovative andnon-innovative regrmsordm International Journal of Technology Management Vol 16 No 1-3pp 64-77

Bart CK (1998b) ordfMission mattersordm CA Magazine March pp 31-41

Bart CK (1999a) ordfMaking mission statements countordm CA Magazine March pp 37-47

Bart CK (1999b) ordfAccepting the missionordm CA Magazine August pp 33-4

Bart CK (2000) ordfLasting inspirationordm CA Magazine May pp 49-50

Bart CK (2001a) ordfMeasuring the mission effect in human intellectual capitalordm Journal ofIntellectual Capital Research Vol 2 No 3 pp 320-30

Bart CK (2001b) ordfWhorsquos running the storeordm CA Magazine August pp 22-7

Bart CK (2002) A Tale of Two Employees Corporate Missions Inc Press Hamilton

Bart CK (2003a) ordfInnovation mission statements and learningordm International Journal ofInnovation and Learning forthcoming

Bart CK (2003b) ordfGood governance and intellectual capitalordm paper presented at the 24thMcMaster World Congress on the Management of Intellectual Capital and ElectronicCommerce Hamilton

Bart CK and Baetz MJ (1998) ordfThe relationship between mission statements and regrmperformance an exploratory studyordm Journal of Management Studies Vol 36 No 6pp 823-53

Bart CK and Tabone JC (1999) ordfMission statement content and hospital performance in theCanadian not-for-proregt health-care sectorordm Health Care Management Review Vol 24 No 3pp 18-29

Bart CK Bontis N and Taggar S (2001) ordfA model of mission statements and regrmperformanceordm Management Decision Vol 39 No 1 pp 19-35

Implications forcorporate

governance

379

management awareness is 0294 These results support the notion that theselected mission communication techniques aid in raising awareness of themission statement for both the board members and senior managementFurthermore the magnitude of this impact is relatively higher for boards Thecommunication technique construct however was not found to have any directimpact on the measure for member commitment to the mission

Involvement and awareness (b3 b4 and b5)The beta path (b3) coefregcient from board involvement to board awareness is0441 while the beta path (b4) from board involvement to managementawareness is 0128 These results support the notion that involvement with themission development process by the board is important in raising the boardrsquosawareness of the mission statement Similarly when the board is involved indeveloping their organizationrsquos mission it positively impacts managementrsquoscontinuing and current awareness of the mission plusmn though this latterrelationship is signiregcantly weaker

In contrast the beta path (b5) coefregcient from management involvement tomanagement awareness was found to be just 0158 while the beta path frommanagement involvement to board awareness was neither substantive norsigniregcant Therefore while managementrsquos involvement in the missiondevelopment process appears to encourage their continuing awareness of themission it does not appear to have any effect on the boardrsquos current awareness

Figure 6PLS structural

equation model

Implications forcorporate

governance

373

Antecedents to commitment (b6 b7 and b8)The beta path (b6) coefregcient from management involvement in missiondevelopment to membersrsquo commitment to the mission was established to be0139 while a beta path from either board involvement to commitment ormanagement involvement to board awareness did not exist What this suggestsis that while the commitment of an organizationrsquos members to the missionstatement can be directly supported by the managementrsquos involvement in themission development process the boardrsquos involvement acts as an antecedent tocommitment only indirectly and only through the process of raising its ownawareness (b3 and b4) Following that there are substantive and signiregcantpaths from both board awareness (b7 = 0150) and management awareness(b8 = 0173) to membersrsquo commitment to the mission

Commitment to performance (b9)The beta path (b9) coefregcient from individualsrsquo commitment to the missionstatement and performance was 0583 This is not at all surprising since itreplicates the regndings of a previous study by Bart et al (2001) But the regndingscontinue to underscore the tremendous impact and important role that membercommitment to the mission continues to have and to play respectively in termsof enhancing an organizationrsquos performance

DiscussionThere are a number of important and signiregcant regndings which havematerialized from the current study

Boardsrsquo awareness of their organizationrsquos missionThe regndings from Figure 3 suggest that directors and their boards appear to berelatively aware of their organizationrsquos mission plusmn though it was somewhatlower than managementrsquos Only a small percentage of respondents indicatedthat their board was ordfsomewhat awareordm of the mission and very few stated thatthere was no awareness at all Nevertheless for the most part there were still alarge number of directors who were not highly or fully aware of theirorganizationrsquos mission Therefore the question remains should they be In thisregard path analysis results are unequivocal Continuing board awareness ofthe mission plusmn whereby directors ordfknow understand and remember themissionordm plusmn is an important and signiregcant contributor to having individualsthroughout the organization commit to it The more aware the boards are oftheir organizationrsquos mission the greater their organizational membersrsquocommitment to it will be Moreover directorsrsquo awareness of the mission isequivalent in impact (with respect to membersrsquo commitment) in terms of bothmanagementrsquos awareness of the mission and managementrsquos involvement withthe missionrsquos development Consequently boards cannot afford to becomplacent when it comes to their organizationsrsquo mission and theircontinuing and current awareness of it

JIC43

374

This is a thought-provoking observation It suggests that the days of boardsbeing entertained every now and then with PowerPoint presentations of thecompany mission while the lobster sandwiches are passed around are overBoards must accept that the mission statement is a valuable and important toolin helping to set the strategic direction and positioning of the organization Itshould be the corner-stone of every organizationrsquos strategic plan Given thisimportance it cannot be given short shrift once it has been developed andintroduced to the organization Because every mission also needs thecontinuing commitment and support of all the organizational members if it is tobe ultimately achieved directors have an ongoing responsibility to keepthemselves aware of it as well

One obvious way in which they can help do this is to make sure that themission statement is a part of each board meeting and a part of every boarddiscussion Directors must refer to their organizationsrsquo mission regularly (notjust in a crisis) and use it to test managementrsquos ability to become and remainfocused Having the mission as part of every ordfboard packageordm would certainlyassist in this regard So would memorizing it in certain circumstancesDirectors also need to be assured that the mission is being achieved and thatthere is accountability for its implementation This in turn suggests that theremust be some sort of mechanism in place to measure the organizationrsquosprogress against the mission When actions such as these are taken directorswill help keep their organizationsrsquo mission alive not just for themselves but forthe rest of the gang as well (Please note though that additional comments onenhancing board awareness are being reserved for the following two sections)

Boardsrsquo involvement in the creation of their organizationrsquos missionThis paper began with the question of whether or not boards should beinvolved in the development of their organizationrsquos mission Unlike theprevious discussion on board awareness the regndings of Figure 3 show thatinvolvement by the board of directors in their organizationrsquos mission creationprocess is generally not a well accepted activity and generated the highestpercentage of responses in the category for ordfnot at allordm Whereas 80 percent ofthe respondents perceived their senior managements to be highly involved indeveloping their organizationsrsquo mission only 47 percent believed this to be thecase for the board Moreover informal conversations with established andsenior directors have suggested that board tradition typically dictates that therole of the board vis-aAacute -vis mission is for ordfmanagement to propose and for theboard to disposeordm The current regndings however would challenge thisviewpoint

Recall that the discussion in the previous section established the pivotal rolethat board awareness of the mission plays in terms of enhancing organizationalcommitment to the mission The results from path analysis in Figure 6however have demonstrated the critical importance of the boardrsquos involvement

Implications forcorporate

governance

375

in developing the mission if full board awareness of the mission is to beachieved Indeed of all the antecedent measures in the study it was boardinvolvement which obtained the strongest beta (b) score and was the No 1driver of board awareness Moreover the regndings of path analysis show thatwhile managementrsquos continuing awareness of the mission is also an importantconsideration in terms of securing organizational commitment to it thatawareness is produced almost equivalently from both their own plusmn and theboardrsquos plusmn involvement in mission development In other words it takes boththe boardrsquos and senior managementrsquos involvement to generate plusmn within theexecutive ranks plusmn the necessary and continuing knowledge and understanding(ie awareness) required to affect membersrsquo commitment to the missionInterestingly while management involvement by itself was also found to havea direct inmacruence on organizational commitment to the mission boardinvolvement did not Instead the boardrsquos impact on organizational commitmentto the mission is ordffeltordm through their ongoing awareness of it

Now this is a provocative notion since in the eyes of many individualsmanagement typically represents and provides to a greater extent than theboard the pragmatic ongoing and de facto strategic leadership of theorganization Yet the results from the current study would argue that directorsrsquoinvolvement in a missionrsquos development is a constructive activity on the part ofthe board and an important contributor to organizational success Shouldboards be involved in creating their organizationrsquos mission The answer wouldappear to be a deregnitive ordfyesordm

Directors must now see their role in terms of getting involved in thedevelopment of their organizationrsquos mission in order to raise awareness of it forthemselves and for management and raising awareness of the mission forthemselves in order to create and inmacruence higher levels of commitment to itthroughout the organization Consequently the regndings should be seen ashelping to put to rest the current debate concerning the nature and degree ofboard involvement in mission development Boards must get involved and it iswrong for them not to do so The research regndings thus represent for the regrsttime a true ordfbest practiceordm in corporate governance research The currentcorporate governance literature needs to be revised to take these results intoaccount

Mission communication and awarenessWhen the various techniques to communicate the mission were analyzed anumber of interesting observation were made To begin with when the relativeranking of the various communication methods (as shown in Figure 4) wasreviewed it appeared that there was no one technique which appeared to be theoverwhelming favourite The annual report appeared to be the most popular plusmnand perhaps the most obvious plusmn place for ensuring the widest possibledissemination of the mission among the various stakeholder populations After

JIC43

376

all anyone with a serious interest or ordfstakeordm in the organization would be sureto see the mission in this document The employee manual and posters werealso seen as logical choices for communicating the mission to employee groupsHowever no one technique achieved a usage rating greater than 67 percent andmost communication methods could be said to be used only to a moderateextent (mean score range 256-294) plusmn with the exception of advertisementswhich was clearly and indisputably the least favourite technique (mean score184)

It therefore came as somewhat of a surprise that when the communicationconstruct was created only three communication methods were found to bereliable and valid (ie company information kits company newsletters andother internal documents (such as company strategic and operating plansbudgets MBO and bonus criteria) Yet when these results were furtherdissected and contemplated they appeared to make considerable sense Foreffective communication to take place a ordfmessageordm must be sent receivedunderstood and remembered (Bart 2002) Accordingly while annual reportsmay be the most frequently used document for communicating anorganizationrsquos mission they are not the most effective This is because theyare often not read not widely read or not completely read As a result themission message while ordfsentordm is not necessarily received understood orremembered Similarly employee manuals may plusmn and probably should plusmncontain explicit reference to their organizationrsquos mission However how manytimes has anyone as employees ever referred to the mission by quoting it fromthe company manual Probably few if any at all

In contrast the communication techniques which appear to have a lastingand profound impact in terms of taking a mission message beyond its ordfsentpointordm are those which are designed to

create special attention (ie an information kit which is dedicated toexplaining the mission and can be used as a reference guide)

create ongoing attention and deal with short attention spans (egcompany newsletters) and

focus resource allocations (eg strategic and operational plans)

Thus when these documents are used most people pay attention Furthermorepath analysis conregrmed that both the board and management seem to belistening Indeed for the board the communication construct was the secondmost powerful inmacruencer in terms of its positive impact on board awareness ofthe mission Only board involvement with the mission was more importantHowever in terms of managementrsquos awareness results revealed that it was thecommunication construct which had the most profound impact plusmn almostdouble that of any other variables

These regndings are signiregcant They show that in terms of creatingcontinuing awareness on the part of boards with respect to their organizationsrsquo

Implications forcorporate

governance

377

missions it is necessary to regrst and foremost engage them actively andconstructively in its development Involvement begets awareness To keepthem continually aware various selected communication techniques then needto be deployed But those techniques will be impotent in terms of their effect ifthe board has not regrst made the commitment of time and energy to thedevelopment of the organizationrsquos mission There is no ordfViagraordm cure when thishas not taken place So boards need to understand how the timing andsequence of their awareness are created and sustained Hopefully this researchhelps to establish the proper path to be followed

The observations with respect to management awareness of the mission arealso intriguing As with the case of the board there is no question thatmanagement involvement in developing the mission produces a certain level ofongoing awareness Similarly one would expect that when the board is alsoinvolved it acts as a strong signal to management that the mission is moreimportant than might otherwise be found in organizations where the boardignores it When combined managementrsquos involvement and awareness have atremendous effect on the commitment that organizational members have withrespect to their mission But to sustain managementrsquos interest in the missionand keep their interest in the mission robust the regndings show that it is thecommunication construct plusmn with its three critical communication techniques plusmnwhich has the greatest impact Boards and their managements would do well toensure that these techniques are being regularly deployed if they are seriouslyinterested in making sure that senior executives do not lose sight of the missionor lose enthusiasm for it Relentless repetition of the mission message isprobably still the only way to ensure that the message is remembered plusmn the lastbut essential component of the rules for effective communication (Bart 2002)

ConclusionsIf there is one regnal thought it is this boards need to be more involved indeveloping plusmn and be continuously aware of plusmn their organizationrsquos mission Boardinvolvement matters So too does their awareness For too long there has been alack of clear guidance with respect to the boardrsquos role in mission The extantliterature is contradictory and confusing These results therefore represent asigniregcant and profound milestone for the literature on corporate governanceThe results herein demonstrate and prove ordfbest practiceordm while challengingmany of the assumptions underlying current board practices in this provocativearea Accordingly it is recommended that board involvement with a missionrsquosdevelopment plusmn and continuous awareness of it plusmn need to be both recognizedformally in an organizationrsquos governance structure (eg board charters) andproposed as an amendment to most governance codes currently in force It is alsorecommended that given this new responsibility for mission developmentdirectors need to be sufregciently trained in strategy development so that they canwith management develop a shared view on what the future of the organization

JIC43

378

should be and why it exists However to do so effectively both boards andmanagement need to develop a common language and strategic analysisframework Recent developments at the newly formed Directors College (a jointventure of the DeGroote Business School at McMaster University and theConference Board of Canada (see wwwthedirectorscollegecom)) should helpboards and their managements considerably in this regard

References

Arnold HJ and Feldman DC (1981) ordfSocial desirability response bias in self-report choicesituationsordm Academy of Management Journal Vol 24 pp 377-85

Baetz MC and Bart CK (1996) ordfDeveloping mission statements which workordm Long RangePlanning Vol 29 No 4 pp 524-31

Barclay DW Higgins C and Thompson R (1995) ordfThe partial least squares (PLS) approach tocausal modeling personal computer adaptation and use as illustrationordm TechnologyStudies Vol 2 No 2 pp 285-309

Bart CK (1997a) ordfSex lies and mission statementsordm Business Horizons November-Decemberpp 9-18

Bart CK (1997b) ordfIndustrial regrms and the power of missionordm Industrial MarketingManagement Vol 26 pp 371-83

Bart CK (1997c) ordfMission possibleordm CA Magazine September pp 33-4

Bart CK (1998a) ordfA comparison of mission statements and their rationales in innovative andnon-innovative regrmsordm International Journal of Technology Management Vol 16 No 1-3pp 64-77

Bart CK (1998b) ordfMission mattersordm CA Magazine March pp 31-41

Bart CK (1999a) ordfMaking mission statements countordm CA Magazine March pp 37-47

Bart CK (1999b) ordfAccepting the missionordm CA Magazine August pp 33-4

Bart CK (2000) ordfLasting inspirationordm CA Magazine May pp 49-50

Bart CK (2001a) ordfMeasuring the mission effect in human intellectual capitalordm Journal ofIntellectual Capital Research Vol 2 No 3 pp 320-30

Bart CK (2001b) ordfWhorsquos running the storeordm CA Magazine August pp 22-7

Bart CK (2002) A Tale of Two Employees Corporate Missions Inc Press Hamilton

Bart CK (2003a) ordfInnovation mission statements and learningordm International Journal ofInnovation and Learning forthcoming

Bart CK (2003b) ordfGood governance and intellectual capitalordm paper presented at the 24thMcMaster World Congress on the Management of Intellectual Capital and ElectronicCommerce Hamilton

Bart CK and Baetz MJ (1998) ordfThe relationship between mission statements and regrmperformance an exploratory studyordm Journal of Management Studies Vol 36 No 6pp 823-53

Bart CK and Tabone JC (1999) ordfMission statement content and hospital performance in theCanadian not-for-proregt health-care sectorordm Health Care Management Review Vol 24 No 3pp 18-29

Bart CK Bontis N and Taggar S (2001) ordfA model of mission statements and regrmperformanceordm Management Decision Vol 39 No 1 pp 19-35

Implications forcorporate

governance

379

Antecedents to commitment (b6 b7 and b8)The beta path (b6) coefregcient from management involvement in missiondevelopment to membersrsquo commitment to the mission was established to be0139 while a beta path from either board involvement to commitment ormanagement involvement to board awareness did not exist What this suggestsis that while the commitment of an organizationrsquos members to the missionstatement can be directly supported by the managementrsquos involvement in themission development process the boardrsquos involvement acts as an antecedent tocommitment only indirectly and only through the process of raising its ownawareness (b3 and b4) Following that there are substantive and signiregcantpaths from both board awareness (b7 = 0150) and management awareness(b8 = 0173) to membersrsquo commitment to the mission

Commitment to performance (b9)The beta path (b9) coefregcient from individualsrsquo commitment to the missionstatement and performance was 0583 This is not at all surprising since itreplicates the regndings of a previous study by Bart et al (2001) But the regndingscontinue to underscore the tremendous impact and important role that membercommitment to the mission continues to have and to play respectively in termsof enhancing an organizationrsquos performance

DiscussionThere are a number of important and signiregcant regndings which havematerialized from the current study

Boardsrsquo awareness of their organizationrsquos missionThe regndings from Figure 3 suggest that directors and their boards appear to berelatively aware of their organizationrsquos mission plusmn though it was somewhatlower than managementrsquos Only a small percentage of respondents indicatedthat their board was ordfsomewhat awareordm of the mission and very few stated thatthere was no awareness at all Nevertheless for the most part there were still alarge number of directors who were not highly or fully aware of theirorganizationrsquos mission Therefore the question remains should they be In thisregard path analysis results are unequivocal Continuing board awareness ofthe mission plusmn whereby directors ordfknow understand and remember themissionordm plusmn is an important and signiregcant contributor to having individualsthroughout the organization commit to it The more aware the boards are oftheir organizationrsquos mission the greater their organizational membersrsquocommitment to it will be Moreover directorsrsquo awareness of the mission isequivalent in impact (with respect to membersrsquo commitment) in terms of bothmanagementrsquos awareness of the mission and managementrsquos involvement withthe missionrsquos development Consequently boards cannot afford to becomplacent when it comes to their organizationsrsquo mission and theircontinuing and current awareness of it

JIC43

374

This is a thought-provoking observation It suggests that the days of boardsbeing entertained every now and then with PowerPoint presentations of thecompany mission while the lobster sandwiches are passed around are overBoards must accept that the mission statement is a valuable and important toolin helping to set the strategic direction and positioning of the organization Itshould be the corner-stone of every organizationrsquos strategic plan Given thisimportance it cannot be given short shrift once it has been developed andintroduced to the organization Because every mission also needs thecontinuing commitment and support of all the organizational members if it is tobe ultimately achieved directors have an ongoing responsibility to keepthemselves aware of it as well

One obvious way in which they can help do this is to make sure that themission statement is a part of each board meeting and a part of every boarddiscussion Directors must refer to their organizationsrsquo mission regularly (notjust in a crisis) and use it to test managementrsquos ability to become and remainfocused Having the mission as part of every ordfboard packageordm would certainlyassist in this regard So would memorizing it in certain circumstancesDirectors also need to be assured that the mission is being achieved and thatthere is accountability for its implementation This in turn suggests that theremust be some sort of mechanism in place to measure the organizationrsquosprogress against the mission When actions such as these are taken directorswill help keep their organizationsrsquo mission alive not just for themselves but forthe rest of the gang as well (Please note though that additional comments onenhancing board awareness are being reserved for the following two sections)

Boardsrsquo involvement in the creation of their organizationrsquos missionThis paper began with the question of whether or not boards should beinvolved in the development of their organizationrsquos mission Unlike theprevious discussion on board awareness the regndings of Figure 3 show thatinvolvement by the board of directors in their organizationrsquos mission creationprocess is generally not a well accepted activity and generated the highestpercentage of responses in the category for ordfnot at allordm Whereas 80 percent ofthe respondents perceived their senior managements to be highly involved indeveloping their organizationsrsquo mission only 47 percent believed this to be thecase for the board Moreover informal conversations with established andsenior directors have suggested that board tradition typically dictates that therole of the board vis-aAacute -vis mission is for ordfmanagement to propose and for theboard to disposeordm The current regndings however would challenge thisviewpoint

Recall that the discussion in the previous section established the pivotal rolethat board awareness of the mission plays in terms of enhancing organizationalcommitment to the mission The results from path analysis in Figure 6however have demonstrated the critical importance of the boardrsquos involvement

Implications forcorporate

governance

375

in developing the mission if full board awareness of the mission is to beachieved Indeed of all the antecedent measures in the study it was boardinvolvement which obtained the strongest beta (b) score and was the No 1driver of board awareness Moreover the regndings of path analysis show thatwhile managementrsquos continuing awareness of the mission is also an importantconsideration in terms of securing organizational commitment to it thatawareness is produced almost equivalently from both their own plusmn and theboardrsquos plusmn involvement in mission development In other words it takes boththe boardrsquos and senior managementrsquos involvement to generate plusmn within theexecutive ranks plusmn the necessary and continuing knowledge and understanding(ie awareness) required to affect membersrsquo commitment to the missionInterestingly while management involvement by itself was also found to havea direct inmacruence on organizational commitment to the mission boardinvolvement did not Instead the boardrsquos impact on organizational commitmentto the mission is ordffeltordm through their ongoing awareness of it

Now this is a provocative notion since in the eyes of many individualsmanagement typically represents and provides to a greater extent than theboard the pragmatic ongoing and de facto strategic leadership of theorganization Yet the results from the current study would argue that directorsrsquoinvolvement in a missionrsquos development is a constructive activity on the part ofthe board and an important contributor to organizational success Shouldboards be involved in creating their organizationrsquos mission The answer wouldappear to be a deregnitive ordfyesordm

Directors must now see their role in terms of getting involved in thedevelopment of their organizationrsquos mission in order to raise awareness of it forthemselves and for management and raising awareness of the mission forthemselves in order to create and inmacruence higher levels of commitment to itthroughout the organization Consequently the regndings should be seen ashelping to put to rest the current debate concerning the nature and degree ofboard involvement in mission development Boards must get involved and it iswrong for them not to do so The research regndings thus represent for the regrsttime a true ordfbest practiceordm in corporate governance research The currentcorporate governance literature needs to be revised to take these results intoaccount

Mission communication and awarenessWhen the various techniques to communicate the mission were analyzed anumber of interesting observation were made To begin with when the relativeranking of the various communication methods (as shown in Figure 4) wasreviewed it appeared that there was no one technique which appeared to be theoverwhelming favourite The annual report appeared to be the most popular plusmnand perhaps the most obvious plusmn place for ensuring the widest possibledissemination of the mission among the various stakeholder populations After

JIC43

376

all anyone with a serious interest or ordfstakeordm in the organization would be sureto see the mission in this document The employee manual and posters werealso seen as logical choices for communicating the mission to employee groupsHowever no one technique achieved a usage rating greater than 67 percent andmost communication methods could be said to be used only to a moderateextent (mean score range 256-294) plusmn with the exception of advertisementswhich was clearly and indisputably the least favourite technique (mean score184)

It therefore came as somewhat of a surprise that when the communicationconstruct was created only three communication methods were found to bereliable and valid (ie company information kits company newsletters andother internal documents (such as company strategic and operating plansbudgets MBO and bonus criteria) Yet when these results were furtherdissected and contemplated they appeared to make considerable sense Foreffective communication to take place a ordfmessageordm must be sent receivedunderstood and remembered (Bart 2002) Accordingly while annual reportsmay be the most frequently used document for communicating anorganizationrsquos mission they are not the most effective This is because theyare often not read not widely read or not completely read As a result themission message while ordfsentordm is not necessarily received understood orremembered Similarly employee manuals may plusmn and probably should plusmncontain explicit reference to their organizationrsquos mission However how manytimes has anyone as employees ever referred to the mission by quoting it fromthe company manual Probably few if any at all

In contrast the communication techniques which appear to have a lastingand profound impact in terms of taking a mission message beyond its ordfsentpointordm are those which are designed to

create special attention (ie an information kit which is dedicated toexplaining the mission and can be used as a reference guide)

create ongoing attention and deal with short attention spans (egcompany newsletters) and

focus resource allocations (eg strategic and operational plans)

Thus when these documents are used most people pay attention Furthermorepath analysis conregrmed that both the board and management seem to belistening Indeed for the board the communication construct was the secondmost powerful inmacruencer in terms of its positive impact on board awareness ofthe mission Only board involvement with the mission was more importantHowever in terms of managementrsquos awareness results revealed that it was thecommunication construct which had the most profound impact plusmn almostdouble that of any other variables

These regndings are signiregcant They show that in terms of creatingcontinuing awareness on the part of boards with respect to their organizationsrsquo

Implications forcorporate

governance

377

missions it is necessary to regrst and foremost engage them actively andconstructively in its development Involvement begets awareness To keepthem continually aware various selected communication techniques then needto be deployed But those techniques will be impotent in terms of their effect ifthe board has not regrst made the commitment of time and energy to thedevelopment of the organizationrsquos mission There is no ordfViagraordm cure when thishas not taken place So boards need to understand how the timing andsequence of their awareness are created and sustained Hopefully this researchhelps to establish the proper path to be followed

The observations with respect to management awareness of the mission arealso intriguing As with the case of the board there is no question thatmanagement involvement in developing the mission produces a certain level ofongoing awareness Similarly one would expect that when the board is alsoinvolved it acts as a strong signal to management that the mission is moreimportant than might otherwise be found in organizations where the boardignores it When combined managementrsquos involvement and awareness have atremendous effect on the commitment that organizational members have withrespect to their mission But to sustain managementrsquos interest in the missionand keep their interest in the mission robust the regndings show that it is thecommunication construct plusmn with its three critical communication techniques plusmnwhich has the greatest impact Boards and their managements would do well toensure that these techniques are being regularly deployed if they are seriouslyinterested in making sure that senior executives do not lose sight of the missionor lose enthusiasm for it Relentless repetition of the mission message isprobably still the only way to ensure that the message is remembered plusmn the lastbut essential component of the rules for effective communication (Bart 2002)

ConclusionsIf there is one regnal thought it is this boards need to be more involved indeveloping plusmn and be continuously aware of plusmn their organizationrsquos mission Boardinvolvement matters So too does their awareness For too long there has been alack of clear guidance with respect to the boardrsquos role in mission The extantliterature is contradictory and confusing These results therefore represent asigniregcant and profound milestone for the literature on corporate governanceThe results herein demonstrate and prove ordfbest practiceordm while challengingmany of the assumptions underlying current board practices in this provocativearea Accordingly it is recommended that board involvement with a missionrsquosdevelopment plusmn and continuous awareness of it plusmn need to be both recognizedformally in an organizationrsquos governance structure (eg board charters) andproposed as an amendment to most governance codes currently in force It is alsorecommended that given this new responsibility for mission developmentdirectors need to be sufregciently trained in strategy development so that they canwith management develop a shared view on what the future of the organization

JIC43

378

should be and why it exists However to do so effectively both boards andmanagement need to develop a common language and strategic analysisframework Recent developments at the newly formed Directors College (a jointventure of the DeGroote Business School at McMaster University and theConference Board of Canada (see wwwthedirectorscollegecom)) should helpboards and their managements considerably in this regard

References

Arnold HJ and Feldman DC (1981) ordfSocial desirability response bias in self-report choicesituationsordm Academy of Management Journal Vol 24 pp 377-85

Baetz MC and Bart CK (1996) ordfDeveloping mission statements which workordm Long RangePlanning Vol 29 No 4 pp 524-31

Barclay DW Higgins C and Thompson R (1995) ordfThe partial least squares (PLS) approach tocausal modeling personal computer adaptation and use as illustrationordm TechnologyStudies Vol 2 No 2 pp 285-309

Bart CK (1997a) ordfSex lies and mission statementsordm Business Horizons November-Decemberpp 9-18

Bart CK (1997b) ordfIndustrial regrms and the power of missionordm Industrial MarketingManagement Vol 26 pp 371-83

Bart CK (1997c) ordfMission possibleordm CA Magazine September pp 33-4

Bart CK (1998a) ordfA comparison of mission statements and their rationales in innovative andnon-innovative regrmsordm International Journal of Technology Management Vol 16 No 1-3pp 64-77

Bart CK (1998b) ordfMission mattersordm CA Magazine March pp 31-41

Bart CK (1999a) ordfMaking mission statements countordm CA Magazine March pp 37-47

Bart CK (1999b) ordfAccepting the missionordm CA Magazine August pp 33-4

Bart CK (2000) ordfLasting inspirationordm CA Magazine May pp 49-50

Bart CK (2001a) ordfMeasuring the mission effect in human intellectual capitalordm Journal ofIntellectual Capital Research Vol 2 No 3 pp 320-30

Bart CK (2001b) ordfWhorsquos running the storeordm CA Magazine August pp 22-7

Bart CK (2002) A Tale of Two Employees Corporate Missions Inc Press Hamilton

Bart CK (2003a) ordfInnovation mission statements and learningordm International Journal ofInnovation and Learning forthcoming

Bart CK (2003b) ordfGood governance and intellectual capitalordm paper presented at the 24thMcMaster World Congress on the Management of Intellectual Capital and ElectronicCommerce Hamilton

Bart CK and Baetz MJ (1998) ordfThe relationship between mission statements and regrmperformance an exploratory studyordm Journal of Management Studies Vol 36 No 6pp 823-53

Bart CK and Tabone JC (1999) ordfMission statement content and hospital performance in theCanadian not-for-proregt health-care sectorordm Health Care Management Review Vol 24 No 3pp 18-29

Bart CK Bontis N and Taggar S (2001) ordfA model of mission statements and regrmperformanceordm Management Decision Vol 39 No 1 pp 19-35

Implications forcorporate

governance

379

This is a thought-provoking observation It suggests that the days of boardsbeing entertained every now and then with PowerPoint presentations of thecompany mission while the lobster sandwiches are passed around are overBoards must accept that the mission statement is a valuable and important toolin helping to set the strategic direction and positioning of the organization Itshould be the corner-stone of every organizationrsquos strategic plan Given thisimportance it cannot be given short shrift once it has been developed andintroduced to the organization Because every mission also needs thecontinuing commitment and support of all the organizational members if it is tobe ultimately achieved directors have an ongoing responsibility to keepthemselves aware of it as well

One obvious way in which they can help do this is to make sure that themission statement is a part of each board meeting and a part of every boarddiscussion Directors must refer to their organizationsrsquo mission regularly (notjust in a crisis) and use it to test managementrsquos ability to become and remainfocused Having the mission as part of every ordfboard packageordm would certainlyassist in this regard So would memorizing it in certain circumstancesDirectors also need to be assured that the mission is being achieved and thatthere is accountability for its implementation This in turn suggests that theremust be some sort of mechanism in place to measure the organizationrsquosprogress against the mission When actions such as these are taken directorswill help keep their organizationsrsquo mission alive not just for themselves but forthe rest of the gang as well (Please note though that additional comments onenhancing board awareness are being reserved for the following two sections)

Boardsrsquo involvement in the creation of their organizationrsquos missionThis paper began with the question of whether or not boards should beinvolved in the development of their organizationrsquos mission Unlike theprevious discussion on board awareness the regndings of Figure 3 show thatinvolvement by the board of directors in their organizationrsquos mission creationprocess is generally not a well accepted activity and generated the highestpercentage of responses in the category for ordfnot at allordm Whereas 80 percent ofthe respondents perceived their senior managements to be highly involved indeveloping their organizationsrsquo mission only 47 percent believed this to be thecase for the board Moreover informal conversations with established andsenior directors have suggested that board tradition typically dictates that therole of the board vis-aAacute -vis mission is for ordfmanagement to propose and for theboard to disposeordm The current regndings however would challenge thisviewpoint

Recall that the discussion in the previous section established the pivotal rolethat board awareness of the mission plays in terms of enhancing organizationalcommitment to the mission The results from path analysis in Figure 6however have demonstrated the critical importance of the boardrsquos involvement

Implications forcorporate

governance

375

in developing the mission if full board awareness of the mission is to beachieved Indeed of all the antecedent measures in the study it was boardinvolvement which obtained the strongest beta (b) score and was the No 1driver of board awareness Moreover the regndings of path analysis show thatwhile managementrsquos continuing awareness of the mission is also an importantconsideration in terms of securing organizational commitment to it thatawareness is produced almost equivalently from both their own plusmn and theboardrsquos plusmn involvement in mission development In other words it takes boththe boardrsquos and senior managementrsquos involvement to generate plusmn within theexecutive ranks plusmn the necessary and continuing knowledge and understanding(ie awareness) required to affect membersrsquo commitment to the missionInterestingly while management involvement by itself was also found to havea direct inmacruence on organizational commitment to the mission boardinvolvement did not Instead the boardrsquos impact on organizational commitmentto the mission is ordffeltordm through their ongoing awareness of it

Now this is a provocative notion since in the eyes of many individualsmanagement typically represents and provides to a greater extent than theboard the pragmatic ongoing and de facto strategic leadership of theorganization Yet the results from the current study would argue that directorsrsquoinvolvement in a missionrsquos development is a constructive activity on the part ofthe board and an important contributor to organizational success Shouldboards be involved in creating their organizationrsquos mission The answer wouldappear to be a deregnitive ordfyesordm

Directors must now see their role in terms of getting involved in thedevelopment of their organizationrsquos mission in order to raise awareness of it forthemselves and for management and raising awareness of the mission forthemselves in order to create and inmacruence higher levels of commitment to itthroughout the organization Consequently the regndings should be seen ashelping to put to rest the current debate concerning the nature and degree ofboard involvement in mission development Boards must get involved and it iswrong for them not to do so The research regndings thus represent for the regrsttime a true ordfbest practiceordm in corporate governance research The currentcorporate governance literature needs to be revised to take these results intoaccount

Mission communication and awarenessWhen the various techniques to communicate the mission were analyzed anumber of interesting observation were made To begin with when the relativeranking of the various communication methods (as shown in Figure 4) wasreviewed it appeared that there was no one technique which appeared to be theoverwhelming favourite The annual report appeared to be the most popular plusmnand perhaps the most obvious plusmn place for ensuring the widest possibledissemination of the mission among the various stakeholder populations After

JIC43

376

all anyone with a serious interest or ordfstakeordm in the organization would be sureto see the mission in this document The employee manual and posters werealso seen as logical choices for communicating the mission to employee groupsHowever no one technique achieved a usage rating greater than 67 percent andmost communication methods could be said to be used only to a moderateextent (mean score range 256-294) plusmn with the exception of advertisementswhich was clearly and indisputably the least favourite technique (mean score184)

It therefore came as somewhat of a surprise that when the communicationconstruct was created only three communication methods were found to bereliable and valid (ie company information kits company newsletters andother internal documents (such as company strategic and operating plansbudgets MBO and bonus criteria) Yet when these results were furtherdissected and contemplated they appeared to make considerable sense Foreffective communication to take place a ordfmessageordm must be sent receivedunderstood and remembered (Bart 2002) Accordingly while annual reportsmay be the most frequently used document for communicating anorganizationrsquos mission they are not the most effective This is because theyare often not read not widely read or not completely read As a result themission message while ordfsentordm is not necessarily received understood orremembered Similarly employee manuals may plusmn and probably should plusmncontain explicit reference to their organizationrsquos mission However how manytimes has anyone as employees ever referred to the mission by quoting it fromthe company manual Probably few if any at all

In contrast the communication techniques which appear to have a lastingand profound impact in terms of taking a mission message beyond its ordfsentpointordm are those which are designed to

create special attention (ie an information kit which is dedicated toexplaining the mission and can be used as a reference guide)

create ongoing attention and deal with short attention spans (egcompany newsletters) and

focus resource allocations (eg strategic and operational plans)

Thus when these documents are used most people pay attention Furthermorepath analysis conregrmed that both the board and management seem to belistening Indeed for the board the communication construct was the secondmost powerful inmacruencer in terms of its positive impact on board awareness ofthe mission Only board involvement with the mission was more importantHowever in terms of managementrsquos awareness results revealed that it was thecommunication construct which had the most profound impact plusmn almostdouble that of any other variables

These regndings are signiregcant They show that in terms of creatingcontinuing awareness on the part of boards with respect to their organizationsrsquo

Implications forcorporate

governance

377

missions it is necessary to regrst and foremost engage them actively andconstructively in its development Involvement begets awareness To keepthem continually aware various selected communication techniques then needto be deployed But those techniques will be impotent in terms of their effect ifthe board has not regrst made the commitment of time and energy to thedevelopment of the organizationrsquos mission There is no ordfViagraordm cure when thishas not taken place So boards need to understand how the timing andsequence of their awareness are created and sustained Hopefully this researchhelps to establish the proper path to be followed

The observations with respect to management awareness of the mission arealso intriguing As with the case of the board there is no question thatmanagement involvement in developing the mission produces a certain level ofongoing awareness Similarly one would expect that when the board is alsoinvolved it acts as a strong signal to management that the mission is moreimportant than might otherwise be found in organizations where the boardignores it When combined managementrsquos involvement and awareness have atremendous effect on the commitment that organizational members have withrespect to their mission But to sustain managementrsquos interest in the missionand keep their interest in the mission robust the regndings show that it is thecommunication construct plusmn with its three critical communication techniques plusmnwhich has the greatest impact Boards and their managements would do well toensure that these techniques are being regularly deployed if they are seriouslyinterested in making sure that senior executives do not lose sight of the missionor lose enthusiasm for it Relentless repetition of the mission message isprobably still the only way to ensure that the message is remembered plusmn the lastbut essential component of the rules for effective communication (Bart 2002)

ConclusionsIf there is one regnal thought it is this boards need to be more involved indeveloping plusmn and be continuously aware of plusmn their organizationrsquos mission Boardinvolvement matters So too does their awareness For too long there has been alack of clear guidance with respect to the boardrsquos role in mission The extantliterature is contradictory and confusing These results therefore represent asigniregcant and profound milestone for the literature on corporate governanceThe results herein demonstrate and prove ordfbest practiceordm while challengingmany of the assumptions underlying current board practices in this provocativearea Accordingly it is recommended that board involvement with a missionrsquosdevelopment plusmn and continuous awareness of it plusmn need to be both recognizedformally in an organizationrsquos governance structure (eg board charters) andproposed as an amendment to most governance codes currently in force It is alsorecommended that given this new responsibility for mission developmentdirectors need to be sufregciently trained in strategy development so that they canwith management develop a shared view on what the future of the organization

JIC43

378

should be and why it exists However to do so effectively both boards andmanagement need to develop a common language and strategic analysisframework Recent developments at the newly formed Directors College (a jointventure of the DeGroote Business School at McMaster University and theConference Board of Canada (see wwwthedirectorscollegecom)) should helpboards and their managements considerably in this regard

References

Arnold HJ and Feldman DC (1981) ordfSocial desirability response bias in self-report choicesituationsordm Academy of Management Journal Vol 24 pp 377-85

Baetz MC and Bart CK (1996) ordfDeveloping mission statements which workordm Long RangePlanning Vol 29 No 4 pp 524-31

Barclay DW Higgins C and Thompson R (1995) ordfThe partial least squares (PLS) approach tocausal modeling personal computer adaptation and use as illustrationordm TechnologyStudies Vol 2 No 2 pp 285-309

Bart CK (1997a) ordfSex lies and mission statementsordm Business Horizons November-Decemberpp 9-18

Bart CK (1997b) ordfIndustrial regrms and the power of missionordm Industrial MarketingManagement Vol 26 pp 371-83

Bart CK (1997c) ordfMission possibleordm CA Magazine September pp 33-4

Bart CK (1998a) ordfA comparison of mission statements and their rationales in innovative andnon-innovative regrmsordm International Journal of Technology Management Vol 16 No 1-3pp 64-77

Bart CK (1998b) ordfMission mattersordm CA Magazine March pp 31-41

Bart CK (1999a) ordfMaking mission statements countordm CA Magazine March pp 37-47

Bart CK (1999b) ordfAccepting the missionordm CA Magazine August pp 33-4

Bart CK (2000) ordfLasting inspirationordm CA Magazine May pp 49-50

Bart CK (2001a) ordfMeasuring the mission effect in human intellectual capitalordm Journal ofIntellectual Capital Research Vol 2 No 3 pp 320-30

Bart CK (2001b) ordfWhorsquos running the storeordm CA Magazine August pp 22-7

Bart CK (2002) A Tale of Two Employees Corporate Missions Inc Press Hamilton

Bart CK (2003a) ordfInnovation mission statements and learningordm International Journal ofInnovation and Learning forthcoming

Bart CK (2003b) ordfGood governance and intellectual capitalordm paper presented at the 24thMcMaster World Congress on the Management of Intellectual Capital and ElectronicCommerce Hamilton

Bart CK and Baetz MJ (1998) ordfThe relationship between mission statements and regrmperformance an exploratory studyordm Journal of Management Studies Vol 36 No 6pp 823-53

Bart CK and Tabone JC (1999) ordfMission statement content and hospital performance in theCanadian not-for-proregt health-care sectorordm Health Care Management Review Vol 24 No 3pp 18-29

Bart CK Bontis N and Taggar S (2001) ordfA model of mission statements and regrmperformanceordm Management Decision Vol 39 No 1 pp 19-35

Implications forcorporate

governance

379

in developing the mission if full board awareness of the mission is to beachieved Indeed of all the antecedent measures in the study it was boardinvolvement which obtained the strongest beta (b) score and was the No 1driver of board awareness Moreover the regndings of path analysis show thatwhile managementrsquos continuing awareness of the mission is also an importantconsideration in terms of securing organizational commitment to it thatawareness is produced almost equivalently from both their own plusmn and theboardrsquos plusmn involvement in mission development In other words it takes boththe boardrsquos and senior managementrsquos involvement to generate plusmn within theexecutive ranks plusmn the necessary and continuing knowledge and understanding(ie awareness) required to affect membersrsquo commitment to the missionInterestingly while management involvement by itself was also found to havea direct inmacruence on organizational commitment to the mission boardinvolvement did not Instead the boardrsquos impact on organizational commitmentto the mission is ordffeltordm through their ongoing awareness of it

Now this is a provocative notion since in the eyes of many individualsmanagement typically represents and provides to a greater extent than theboard the pragmatic ongoing and de facto strategic leadership of theorganization Yet the results from the current study would argue that directorsrsquoinvolvement in a missionrsquos development is a constructive activity on the part ofthe board and an important contributor to organizational success Shouldboards be involved in creating their organizationrsquos mission The answer wouldappear to be a deregnitive ordfyesordm

Directors must now see their role in terms of getting involved in thedevelopment of their organizationrsquos mission in order to raise awareness of it forthemselves and for management and raising awareness of the mission forthemselves in order to create and inmacruence higher levels of commitment to itthroughout the organization Consequently the regndings should be seen ashelping to put to rest the current debate concerning the nature and degree ofboard involvement in mission development Boards must get involved and it iswrong for them not to do so The research regndings thus represent for the regrsttime a true ordfbest practiceordm in corporate governance research The currentcorporate governance literature needs to be revised to take these results intoaccount

Mission communication and awarenessWhen the various techniques to communicate the mission were analyzed anumber of interesting observation were made To begin with when the relativeranking of the various communication methods (as shown in Figure 4) wasreviewed it appeared that there was no one technique which appeared to be theoverwhelming favourite The annual report appeared to be the most popular plusmnand perhaps the most obvious plusmn place for ensuring the widest possibledissemination of the mission among the various stakeholder populations After

JIC43

376

all anyone with a serious interest or ordfstakeordm in the organization would be sureto see the mission in this document The employee manual and posters werealso seen as logical choices for communicating the mission to employee groupsHowever no one technique achieved a usage rating greater than 67 percent andmost communication methods could be said to be used only to a moderateextent (mean score range 256-294) plusmn with the exception of advertisementswhich was clearly and indisputably the least favourite technique (mean score184)

It therefore came as somewhat of a surprise that when the communicationconstruct was created only three communication methods were found to bereliable and valid (ie company information kits company newsletters andother internal documents (such as company strategic and operating plansbudgets MBO and bonus criteria) Yet when these results were furtherdissected and contemplated they appeared to make considerable sense Foreffective communication to take place a ordfmessageordm must be sent receivedunderstood and remembered (Bart 2002) Accordingly while annual reportsmay be the most frequently used document for communicating anorganizationrsquos mission they are not the most effective This is because theyare often not read not widely read or not completely read As a result themission message while ordfsentordm is not necessarily received understood orremembered Similarly employee manuals may plusmn and probably should plusmncontain explicit reference to their organizationrsquos mission However how manytimes has anyone as employees ever referred to the mission by quoting it fromthe company manual Probably few if any at all

In contrast the communication techniques which appear to have a lastingand profound impact in terms of taking a mission message beyond its ordfsentpointordm are those which are designed to

create special attention (ie an information kit which is dedicated toexplaining the mission and can be used as a reference guide)

create ongoing attention and deal with short attention spans (egcompany newsletters) and

focus resource allocations (eg strategic and operational plans)

Thus when these documents are used most people pay attention Furthermorepath analysis conregrmed that both the board and management seem to belistening Indeed for the board the communication construct was the secondmost powerful inmacruencer in terms of its positive impact on board awareness ofthe mission Only board involvement with the mission was more importantHowever in terms of managementrsquos awareness results revealed that it was thecommunication construct which had the most profound impact plusmn almostdouble that of any other variables

These regndings are signiregcant They show that in terms of creatingcontinuing awareness on the part of boards with respect to their organizationsrsquo

Implications forcorporate

governance

377

missions it is necessary to regrst and foremost engage them actively andconstructively in its development Involvement begets awareness To keepthem continually aware various selected communication techniques then needto be deployed But those techniques will be impotent in terms of their effect ifthe board has not regrst made the commitment of time and energy to thedevelopment of the organizationrsquos mission There is no ordfViagraordm cure when thishas not taken place So boards need to understand how the timing andsequence of their awareness are created and sustained Hopefully this researchhelps to establish the proper path to be followed

The observations with respect to management awareness of the mission arealso intriguing As with the case of the board there is no question thatmanagement involvement in developing the mission produces a certain level ofongoing awareness Similarly one would expect that when the board is alsoinvolved it acts as a strong signal to management that the mission is moreimportant than might otherwise be found in organizations where the boardignores it When combined managementrsquos involvement and awareness have atremendous effect on the commitment that organizational members have withrespect to their mission But to sustain managementrsquos interest in the missionand keep their interest in the mission robust the regndings show that it is thecommunication construct plusmn with its three critical communication techniques plusmnwhich has the greatest impact Boards and their managements would do well toensure that these techniques are being regularly deployed if they are seriouslyinterested in making sure that senior executives do not lose sight of the missionor lose enthusiasm for it Relentless repetition of the mission message isprobably still the only way to ensure that the message is remembered plusmn the lastbut essential component of the rules for effective communication (Bart 2002)

ConclusionsIf there is one regnal thought it is this boards need to be more involved indeveloping plusmn and be continuously aware of plusmn their organizationrsquos mission Boardinvolvement matters So too does their awareness For too long there has been alack of clear guidance with respect to the boardrsquos role in mission The extantliterature is contradictory and confusing These results therefore represent asigniregcant and profound milestone for the literature on corporate governanceThe results herein demonstrate and prove ordfbest practiceordm while challengingmany of the assumptions underlying current board practices in this provocativearea Accordingly it is recommended that board involvement with a missionrsquosdevelopment plusmn and continuous awareness of it plusmn need to be both recognizedformally in an organizationrsquos governance structure (eg board charters) andproposed as an amendment to most governance codes currently in force It is alsorecommended that given this new responsibility for mission developmentdirectors need to be sufregciently trained in strategy development so that they canwith management develop a shared view on what the future of the organization

JIC43

378

should be and why it exists However to do so effectively both boards andmanagement need to develop a common language and strategic analysisframework Recent developments at the newly formed Directors College (a jointventure of the DeGroote Business School at McMaster University and theConference Board of Canada (see wwwthedirectorscollegecom)) should helpboards and their managements considerably in this regard

References

Arnold HJ and Feldman DC (1981) ordfSocial desirability response bias in self-report choicesituationsordm Academy of Management Journal Vol 24 pp 377-85

Baetz MC and Bart CK (1996) ordfDeveloping mission statements which workordm Long RangePlanning Vol 29 No 4 pp 524-31

Barclay DW Higgins C and Thompson R (1995) ordfThe partial least squares (PLS) approach tocausal modeling personal computer adaptation and use as illustrationordm TechnologyStudies Vol 2 No 2 pp 285-309

Bart CK (1997a) ordfSex lies and mission statementsordm Business Horizons November-Decemberpp 9-18

Bart CK (1997b) ordfIndustrial regrms and the power of missionordm Industrial MarketingManagement Vol 26 pp 371-83

Bart CK (1997c) ordfMission possibleordm CA Magazine September pp 33-4

Bart CK (1998a) ordfA comparison of mission statements and their rationales in innovative andnon-innovative regrmsordm International Journal of Technology Management Vol 16 No 1-3pp 64-77

Bart CK (1998b) ordfMission mattersordm CA Magazine March pp 31-41

Bart CK (1999a) ordfMaking mission statements countordm CA Magazine March pp 37-47

Bart CK (1999b) ordfAccepting the missionordm CA Magazine August pp 33-4

Bart CK (2000) ordfLasting inspirationordm CA Magazine May pp 49-50

Bart CK (2001a) ordfMeasuring the mission effect in human intellectual capitalordm Journal ofIntellectual Capital Research Vol 2 No 3 pp 320-30

Bart CK (2001b) ordfWhorsquos running the storeordm CA Magazine August pp 22-7

Bart CK (2002) A Tale of Two Employees Corporate Missions Inc Press Hamilton

Bart CK (2003a) ordfInnovation mission statements and learningordm International Journal ofInnovation and Learning forthcoming

Bart CK (2003b) ordfGood governance and intellectual capitalordm paper presented at the 24thMcMaster World Congress on the Management of Intellectual Capital and ElectronicCommerce Hamilton

Bart CK and Baetz MJ (1998) ordfThe relationship between mission statements and regrmperformance an exploratory studyordm Journal of Management Studies Vol 36 No 6pp 823-53

Bart CK and Tabone JC (1999) ordfMission statement content and hospital performance in theCanadian not-for-proregt health-care sectorordm Health Care Management Review Vol 24 No 3pp 18-29

Bart CK Bontis N and Taggar S (2001) ordfA model of mission statements and regrmperformanceordm Management Decision Vol 39 No 1 pp 19-35

Implications forcorporate

governance

379

all anyone with a serious interest or ordfstakeordm in the organization would be sureto see the mission in this document The employee manual and posters werealso seen as logical choices for communicating the mission to employee groupsHowever no one technique achieved a usage rating greater than 67 percent andmost communication methods could be said to be used only to a moderateextent (mean score range 256-294) plusmn with the exception of advertisementswhich was clearly and indisputably the least favourite technique (mean score184)

It therefore came as somewhat of a surprise that when the communicationconstruct was created only three communication methods were found to bereliable and valid (ie company information kits company newsletters andother internal documents (such as company strategic and operating plansbudgets MBO and bonus criteria) Yet when these results were furtherdissected and contemplated they appeared to make considerable sense Foreffective communication to take place a ordfmessageordm must be sent receivedunderstood and remembered (Bart 2002) Accordingly while annual reportsmay be the most frequently used document for communicating anorganizationrsquos mission they are not the most effective This is because theyare often not read not widely read or not completely read As a result themission message while ordfsentordm is not necessarily received understood orremembered Similarly employee manuals may plusmn and probably should plusmncontain explicit reference to their organizationrsquos mission However how manytimes has anyone as employees ever referred to the mission by quoting it fromthe company manual Probably few if any at all

In contrast the communication techniques which appear to have a lastingand profound impact in terms of taking a mission message beyond its ordfsentpointordm are those which are designed to

create special attention (ie an information kit which is dedicated toexplaining the mission and can be used as a reference guide)

create ongoing attention and deal with short attention spans (egcompany newsletters) and

focus resource allocations (eg strategic and operational plans)

Thus when these documents are used most people pay attention Furthermorepath analysis conregrmed that both the board and management seem to belistening Indeed for the board the communication construct was the secondmost powerful inmacruencer in terms of its positive impact on board awareness ofthe mission Only board involvement with the mission was more importantHowever in terms of managementrsquos awareness results revealed that it was thecommunication construct which had the most profound impact plusmn almostdouble that of any other variables

These regndings are signiregcant They show that in terms of creatingcontinuing awareness on the part of boards with respect to their organizationsrsquo

Implications forcorporate

governance

377

missions it is necessary to regrst and foremost engage them actively andconstructively in its development Involvement begets awareness To keepthem continually aware various selected communication techniques then needto be deployed But those techniques will be impotent in terms of their effect ifthe board has not regrst made the commitment of time and energy to thedevelopment of the organizationrsquos mission There is no ordfViagraordm cure when thishas not taken place So boards need to understand how the timing andsequence of their awareness are created and sustained Hopefully this researchhelps to establish the proper path to be followed

The observations with respect to management awareness of the mission arealso intriguing As with the case of the board there is no question thatmanagement involvement in developing the mission produces a certain level ofongoing awareness Similarly one would expect that when the board is alsoinvolved it acts as a strong signal to management that the mission is moreimportant than might otherwise be found in organizations where the boardignores it When combined managementrsquos involvement and awareness have atremendous effect on the commitment that organizational members have withrespect to their mission But to sustain managementrsquos interest in the missionand keep their interest in the mission robust the regndings show that it is thecommunication construct plusmn with its three critical communication techniques plusmnwhich has the greatest impact Boards and their managements would do well toensure that these techniques are being regularly deployed if they are seriouslyinterested in making sure that senior executives do not lose sight of the missionor lose enthusiasm for it Relentless repetition of the mission message isprobably still the only way to ensure that the message is remembered plusmn the lastbut essential component of the rules for effective communication (Bart 2002)

ConclusionsIf there is one regnal thought it is this boards need to be more involved indeveloping plusmn and be continuously aware of plusmn their organizationrsquos mission Boardinvolvement matters So too does their awareness For too long there has been alack of clear guidance with respect to the boardrsquos role in mission The extantliterature is contradictory and confusing These results therefore represent asigniregcant and profound milestone for the literature on corporate governanceThe results herein demonstrate and prove ordfbest practiceordm while challengingmany of the assumptions underlying current board practices in this provocativearea Accordingly it is recommended that board involvement with a missionrsquosdevelopment plusmn and continuous awareness of it plusmn need to be both recognizedformally in an organizationrsquos governance structure (eg board charters) andproposed as an amendment to most governance codes currently in force It is alsorecommended that given this new responsibility for mission developmentdirectors need to be sufregciently trained in strategy development so that they canwith management develop a shared view on what the future of the organization

JIC43

378

should be and why it exists However to do so effectively both boards andmanagement need to develop a common language and strategic analysisframework Recent developments at the newly formed Directors College (a jointventure of the DeGroote Business School at McMaster University and theConference Board of Canada (see wwwthedirectorscollegecom)) should helpboards and their managements considerably in this regard

References

Arnold HJ and Feldman DC (1981) ordfSocial desirability response bias in self-report choicesituationsordm Academy of Management Journal Vol 24 pp 377-85

Baetz MC and Bart CK (1996) ordfDeveloping mission statements which workordm Long RangePlanning Vol 29 No 4 pp 524-31

Barclay DW Higgins C and Thompson R (1995) ordfThe partial least squares (PLS) approach tocausal modeling personal computer adaptation and use as illustrationordm TechnologyStudies Vol 2 No 2 pp 285-309

Bart CK (1997a) ordfSex lies and mission statementsordm Business Horizons November-Decemberpp 9-18

Bart CK (1997b) ordfIndustrial regrms and the power of missionordm Industrial MarketingManagement Vol 26 pp 371-83

Bart CK (1997c) ordfMission possibleordm CA Magazine September pp 33-4

Bart CK (1998a) ordfA comparison of mission statements and their rationales in innovative andnon-innovative regrmsordm International Journal of Technology Management Vol 16 No 1-3pp 64-77

Bart CK (1998b) ordfMission mattersordm CA Magazine March pp 31-41

Bart CK (1999a) ordfMaking mission statements countordm CA Magazine March pp 37-47

Bart CK (1999b) ordfAccepting the missionordm CA Magazine August pp 33-4

Bart CK (2000) ordfLasting inspirationordm CA Magazine May pp 49-50

Bart CK (2001a) ordfMeasuring the mission effect in human intellectual capitalordm Journal ofIntellectual Capital Research Vol 2 No 3 pp 320-30

Bart CK (2001b) ordfWhorsquos running the storeordm CA Magazine August pp 22-7

Bart CK (2002) A Tale of Two Employees Corporate Missions Inc Press Hamilton

Bart CK (2003a) ordfInnovation mission statements and learningordm International Journal ofInnovation and Learning forthcoming

Bart CK (2003b) ordfGood governance and intellectual capitalordm paper presented at the 24thMcMaster World Congress on the Management of Intellectual Capital and ElectronicCommerce Hamilton

Bart CK and Baetz MJ (1998) ordfThe relationship between mission statements and regrmperformance an exploratory studyordm Journal of Management Studies Vol 36 No 6pp 823-53

Bart CK and Tabone JC (1999) ordfMission statement content and hospital performance in theCanadian not-for-proregt health-care sectorordm Health Care Management Review Vol 24 No 3pp 18-29

Bart CK Bontis N and Taggar S (2001) ordfA model of mission statements and regrmperformanceordm Management Decision Vol 39 No 1 pp 19-35

Implications forcorporate

governance

379

missions it is necessary to regrst and foremost engage them actively andconstructively in its development Involvement begets awareness To keepthem continually aware various selected communication techniques then needto be deployed But those techniques will be impotent in terms of their effect ifthe board has not regrst made the commitment of time and energy to thedevelopment of the organizationrsquos mission There is no ordfViagraordm cure when thishas not taken place So boards need to understand how the timing andsequence of their awareness are created and sustained Hopefully this researchhelps to establish the proper path to be followed

The observations with respect to management awareness of the mission arealso intriguing As with the case of the board there is no question thatmanagement involvement in developing the mission produces a certain level ofongoing awareness Similarly one would expect that when the board is alsoinvolved it acts as a strong signal to management that the mission is moreimportant than might otherwise be found in organizations where the boardignores it When combined managementrsquos involvement and awareness have atremendous effect on the commitment that organizational members have withrespect to their mission But to sustain managementrsquos interest in the missionand keep their interest in the mission robust the regndings show that it is thecommunication construct plusmn with its three critical communication techniques plusmnwhich has the greatest impact Boards and their managements would do well toensure that these techniques are being regularly deployed if they are seriouslyinterested in making sure that senior executives do not lose sight of the missionor lose enthusiasm for it Relentless repetition of the mission message isprobably still the only way to ensure that the message is remembered plusmn the lastbut essential component of the rules for effective communication (Bart 2002)

ConclusionsIf there is one regnal thought it is this boards need to be more involved indeveloping plusmn and be continuously aware of plusmn their organizationrsquos mission Boardinvolvement matters So too does their awareness For too long there has been alack of clear guidance with respect to the boardrsquos role in mission The extantliterature is contradictory and confusing These results therefore represent asigniregcant and profound milestone for the literature on corporate governanceThe results herein demonstrate and prove ordfbest practiceordm while challengingmany of the assumptions underlying current board practices in this provocativearea Accordingly it is recommended that board involvement with a missionrsquosdevelopment plusmn and continuous awareness of it plusmn need to be both recognizedformally in an organizationrsquos governance structure (eg board charters) andproposed as an amendment to most governance codes currently in force It is alsorecommended that given this new responsibility for mission developmentdirectors need to be sufregciently trained in strategy development so that they canwith management develop a shared view on what the future of the organization

JIC43

378

should be and why it exists However to do so effectively both boards andmanagement need to develop a common language and strategic analysisframework Recent developments at the newly formed Directors College (a jointventure of the DeGroote Business School at McMaster University and theConference Board of Canada (see wwwthedirectorscollegecom)) should helpboards and their managements considerably in this regard

References

Arnold HJ and Feldman DC (1981) ordfSocial desirability response bias in self-report choicesituationsordm Academy of Management Journal Vol 24 pp 377-85

Baetz MC and Bart CK (1996) ordfDeveloping mission statements which workordm Long RangePlanning Vol 29 No 4 pp 524-31

Barclay DW Higgins C and Thompson R (1995) ordfThe partial least squares (PLS) approach tocausal modeling personal computer adaptation and use as illustrationordm TechnologyStudies Vol 2 No 2 pp 285-309

Bart CK (1997a) ordfSex lies and mission statementsordm Business Horizons November-Decemberpp 9-18

Bart CK (1997b) ordfIndustrial regrms and the power of missionordm Industrial MarketingManagement Vol 26 pp 371-83

Bart CK (1997c) ordfMission possibleordm CA Magazine September pp 33-4

Bart CK (1998a) ordfA comparison of mission statements and their rationales in innovative andnon-innovative regrmsordm International Journal of Technology Management Vol 16 No 1-3pp 64-77

Bart CK (1998b) ordfMission mattersordm CA Magazine March pp 31-41

Bart CK (1999a) ordfMaking mission statements countordm CA Magazine March pp 37-47

Bart CK (1999b) ordfAccepting the missionordm CA Magazine August pp 33-4

Bart CK (2000) ordfLasting inspirationordm CA Magazine May pp 49-50

Bart CK (2001a) ordfMeasuring the mission effect in human intellectual capitalordm Journal ofIntellectual Capital Research Vol 2 No 3 pp 320-30

Bart CK (2001b) ordfWhorsquos running the storeordm CA Magazine August pp 22-7

Bart CK (2002) A Tale of Two Employees Corporate Missions Inc Press Hamilton

Bart CK (2003a) ordfInnovation mission statements and learningordm International Journal ofInnovation and Learning forthcoming

Bart CK (2003b) ordfGood governance and intellectual capitalordm paper presented at the 24thMcMaster World Congress on the Management of Intellectual Capital and ElectronicCommerce Hamilton

Bart CK and Baetz MJ (1998) ordfThe relationship between mission statements and regrmperformance an exploratory studyordm Journal of Management Studies Vol 36 No 6pp 823-53

Bart CK and Tabone JC (1999) ordfMission statement content and hospital performance in theCanadian not-for-proregt health-care sectorordm Health Care Management Review Vol 24 No 3pp 18-29

Bart CK Bontis N and Taggar S (2001) ordfA model of mission statements and regrmperformanceordm Management Decision Vol 39 No 1 pp 19-35

Implications forcorporate

governance

379

should be and why it exists However to do so effectively both boards andmanagement need to develop a common language and strategic analysisframework Recent developments at the newly formed Directors College (a jointventure of the DeGroote Business School at McMaster University and theConference Board of Canada (see wwwthedirectorscollegecom)) should helpboards and their managements considerably in this regard

References

Arnold HJ and Feldman DC (1981) ordfSocial desirability response bias in self-report choicesituationsordm Academy of Management Journal Vol 24 pp 377-85

Baetz MC and Bart CK (1996) ordfDeveloping mission statements which workordm Long RangePlanning Vol 29 No 4 pp 524-31

Barclay DW Higgins C and Thompson R (1995) ordfThe partial least squares (PLS) approach tocausal modeling personal computer adaptation and use as illustrationordm TechnologyStudies Vol 2 No 2 pp 285-309

Bart CK (1997a) ordfSex lies and mission statementsordm Business Horizons November-Decemberpp 9-18

Bart CK (1997b) ordfIndustrial regrms and the power of missionordm Industrial MarketingManagement Vol 26 pp 371-83

Bart CK (1997c) ordfMission possibleordm CA Magazine September pp 33-4

Bart CK (1998a) ordfA comparison of mission statements and their rationales in innovative andnon-innovative regrmsordm International Journal of Technology Management Vol 16 No 1-3pp 64-77

Bart CK (1998b) ordfMission mattersordm CA Magazine March pp 31-41

Bart CK (1999a) ordfMaking mission statements countordm CA Magazine March pp 37-47

Bart CK (1999b) ordfAccepting the missionordm CA Magazine August pp 33-4

Bart CK (2000) ordfLasting inspirationordm CA Magazine May pp 49-50

Bart CK (2001a) ordfMeasuring the mission effect in human intellectual capitalordm Journal ofIntellectual Capital Research Vol 2 No 3 pp 320-30

Bart CK (2001b) ordfWhorsquos running the storeordm CA Magazine August pp 22-7

Bart CK (2002) A Tale of Two Employees Corporate Missions Inc Press Hamilton

Bart CK (2003a) ordfInnovation mission statements and learningordm International Journal ofInnovation and Learning forthcoming

Bart CK (2003b) ordfGood governance and intellectual capitalordm paper presented at the 24thMcMaster World Congress on the Management of Intellectual Capital and ElectronicCommerce Hamilton

Bart CK and Baetz MJ (1998) ordfThe relationship between mission statements and regrmperformance an exploratory studyordm Journal of Management Studies Vol 36 No 6pp 823-53

Bart CK and Tabone JC (1999) ordfMission statement content and hospital performance in theCanadian not-for-proregt health-care sectorordm Health Care Management Review Vol 24 No 3pp 18-29

Bart CK Bontis N and Taggar S (2001) ordfA model of mission statements and regrmperformanceordm Management Decision Vol 39 No 1 pp 19-35

Implications forcorporate

governance

379

Bollen KA (1990) ordfOverall regt in covariance structure models two types of sample size effectsordmPsychological Bulletin Vol 107 No 2 pp 256-9

Bontis N (1996) ordfTherersquos a price on your head managing intellectual capital strategicallyordmBusiness Quarterly Summer pp 40-7

Bontis N (1998) ordfIntellectual capital an exploratory study that develops measures and modelsordmManagement Decision Vol 36 No 2 pp 63-76

Bontis N (1999) ordfManaging organizational knowledge by diagnosing intellectual capitalframing and advancing the state of the regeldordm International Journal of TechnologyManagement Vol 18 No 5-8 pp 433-62

Bontis N (2001) ordfAssessing knowledge assets a review of the models used to measureintellectual capitalordm International Journal of Management Reviews Vol 3 No 1 pp 41-60

Bontis N (2002) World Congress of Intellectual Capital Readings Butterworth-Heinemann-KMCIPress Boston MA

Bontis N (2003a) ordfIntellectual capital disclosure in Canadian corporationsordm Journal of HumanResource Costing and Accounting Vol 7 No 1-2 pp 9-20

Bontis N (2003b) ordfNational intellectual capital indexordm Journal of Intellectual Capitalforthcoming

Bontis N and Fitz-enz J (2002) ordfIntellectual capital ROI a causal map of human capitalantecedents and consequentsordm Journal of Intellectual Capital Vol 3 No 3 pp 223-47

Bontis N and Girardi J (2000) ordfTeaching knowledge management and intellectual capitallessons an empirical examination of the TANGO simulationordm International Journal ofTechnology Management Vol 20 No 5-8 pp 545-55

Bontis N and Nikitopoulos D (2001) ordfThought leadership on intellectual capitalordm Journal ofIntellectual Capital Vol 2 No 3 pp 183-91

Bontis N Chua W and Richardson S (2000) ordfIntellectual capital and the nature of business inMalaysiaordm Journal of Intellectual Capital Vol 1 No 1 pp 85-100

Bontis N Crossan M and Hulland J (2002) ordfManaging an organizational learning system byaligning stocks and macrowsordm Journal of Management Studies Vol 39 No 4 pp 437-69

Bontis N Dragonetti N Jacobsen K and Roos G (1999) ordfThe knowledge toolbox a review ofthe tools available to measure and manage intangible resourcesordm European ManagementJournal Vol 17 No 4 pp 391-402

Campbell A (1997) ordfMission statementsordm Long Range Planning Vol 30 No 6 pp 931-2

Carmines EG and Zeller RA (1979) ordfReliability and validity assessmentordm Sage UniversityPaper Series on Quantitative Applications in the Social Sciences No 07-017 Sage BeverlyHills CA

Choo CW and Bontis N (2002) The Strategic Management of Intellectual Capital andOrganizational Knowledge Oxford University Press New York NY

CICA (1995a) Guidance on Control CICA Research Series CICA Toronto pp 5-10

CICA (1995b) Governance Processes for Control CICA Research Series CICA Toronto pp 2-6

CICA (1999) Guidance for Directors plusmn Dealing with Risk in the Boardroom CICA Research SeriesCICA Toronto pp 1-3

Dess GG and Robinson RB (1984) ordfMeasuring organizational performance in the absence ofobjective measures the case of the privately-held regrm and conglomerate business unitordmStrategic Management Journal Vol 5 No 3 pp 265-73

Fornell C and Bookstein F (1982) ordfTwo structural equations models LISREL and PLS appliedto consumer exit-voice theoryordm Journal of Marketing Research Vol 19 pp 440-52

JIC43

380

Glick WG Huber GP Miller CC Doty DH and Sutcliffe KM (1990) ordfStudying changes inorganizational design and effectiveness retrospective event histories and periodicassessmentsordm Organizational Science Vol 1 pp 293-312

Hulland J (1999) ordfUse of partial least squares (PLS) in strategic management research a reviewof four recent studiesordm Strategic Management Journal Vol 20 pp 195-204

Institute of Corporate Directors of Canada (ICD) (1988) The Independent Corporate Director ICDResearch Series ICD Toronto p 6

Institute of Corporate Directors of Canada (ICD) (1992) Guidelines for Corporate Directors inCanada ICD Research Series ICD Toronto p 20

Joint Committee on Corporate Governance (2001) ordfBeyond compliance building a governancecultureordm Final Report Chartered Accountants of Canada Toronto Stock Exchange andCanadian Venture Exchange Toronto

Joreskog KG and Sorbom D (1984) LISREL VI Analysis of Linear Structural Relationships byMaximum Likelihood Instrumental Variables and Least Squares Methods ScientiregcSoftware Inc Mooresville IN

Konrad AM and Linnehan F (1995) ordfFormalized HRM structures coordinating equalemployment opportunity or concealing organizational practicesordm Academy ofManagement Journal Vol 38 pp 787-820

Lyles M and Salk J (1997) ordfKnowledge acquisition from foreign partners in international jointventures an empirical examination in the Hungarian contextordm in Beamish P and KillingP (Eds) Cooperative Strategies European Perspectives New Lexington Press SanFrancisco CA

National Association of Corporate Directors (NACD) (2001) ordfBlue Ribbon Commission on theboardrsquos role in corporate strategyordm NACD Research Series NACD Washington DC

Nunnally JC (1978) Psychometric Theory 2nd ed McGraw-Hill New York NY

OECD (1999) Principles of Corporate Governance OECD Press Paris

OrsquoRegan P OrsquoDonnel D Kennedy T Bontis N and Cleary P (2001) ordfPerceptions ofintellectual capital Irish evidenceordm Journal of Human Resource Costing and AccountingVol 6 No 2 pp 29-38

Podsakoff PM and Organ DW (1986) ordfSelf-reports in organizational research problems andprospectsordm Journal of Management Vol 12 pp 531-44

Scott SG and Bruce RA (1994) ordfDeterminants of innovative behaviour a path model ofindividual innovation in the workplaceordm Academy of Management Journal Vol 37pp 580-607

Shimp T and Sharma S (1987) ordfConsumer ethnocentrism construction and validation of theCETSCALEordm Journal of Marketing Research Vol 24 pp 280-9

Stovel M and Bontis N (2002) ordfVoluntary turnover knowledge management friend or foeordmJournal of Intellectual Capital Vol 3 No 3 pp 303-22

TSX (2002) ordfToronto stock exchange amends corporate governance guidelinesordm TSX NewsRelease April 26 Toronto

Van der Weyer M (1994) ordfMission improvable for clicheAcircd syntactically-challenged copymission statements are hard to beatordm Management Today September pp 66-8

Venkatraman N and Ramanujam V (1987) ordfPlanning system success a conceptualization andan operational modelordm Management Science Vol 33 No 6 pp 687-705

Implications forcorporate

governance

381