METAMORPHIC EFFECTS OF POWER AS REFLECTED IN ESPOUSED ORGANIZATIONAL VALUES - IMPLICATIONS FOR CORPORATE GOVERNANCE

Corporate governance concerns the monitoring and control of senior exe cutive behaviour. Implicit in these concerns is recognition that top m anagers, as organisations' major powerholders, can abuse their positio ns in the pursuit of selfish goals that disadvantage shareholders and other stakeholders. A theory that suggests that power can influence th e cognitions of powerholders is Kipnis' (1976) metamorphic theory of p ower. We study predictions derived from Kipnis' theory of power by rel ating the power of organisations' top dyads (i.e., their chief executi ve officer and chairman), which is measured through demographic charac teristics, to the values and concerns expressed in organisations' docu ments, such as annual reports and mission statements. Top dyads' power , and hence their exposure to potential metamorphic effects, is assess ed by five proxy variables such as tenure within the top job and organ isational insider versus outsider status, while values are measured by counting word frequencies in organisational documents. The sample con sists of 64 large Australian organisations that are studied over the 3 years 1986-1988. We find that top-dyad characteristics and values exp ressed in organisational documents are associated, and that the associ ations broadly conform to predictions derived from the metamorphic the ory of power. Implications for corporate governance and potential impr ovements in the study design are discussed.