Abstract/Summary

This study explains how board composition, board characteristics and board leadership structure impact strategic decisions in the board of the Kuwait Petroleum Company. Corporate governance is conceptualized here as conflict between two principals, the Kuwait Parliament and the Executive. This conflict is posited to have shifted into the board, becoming a conflict among board members, due to their loyalty to either principal. Viewed from an agency perspective, this conflict causes conflict of interests and information asymmetry, which affect strategic decisions. Using a qualitative research design, 30 in-depth interviews were conducted with existing and former board members of the KPC. These semi-structured interviews yielded the respondent board members’ perceptions of the impact of issues of governance, and their proposed alignment solutions. The findings explain how tenure/experience, altruism/patriotism, board independence, recruitment, turnover and political influence effected strategic decisions in the KPC. Findings also suggest how role duality, cultural influence, incentive schemes and monitoring/voting impact the strategic decisions of the KPC. In addition, the proposals for alignment of interests made by respondents, have implications, which are the basis of recommendations made for policy in the KPC. Study limitations are possibility of biased responses, and imperfect recall, by respondents; as well as the generalizability of findings. Suggested future research include conducting longitudinal research for more in-depth data comparisons to other regional contexts and investigating the impact of women in boards. This research contributes to the literature of boards as a mechanism of corporate governance, and to the literature on NOC governance. It also extends multiple agency theory, by conceptualizing board members as agents of two external political interests. Chapter 1 introduces the thesis, 2 reviews the literature, and 3 presents the research design. Chapter 4 presents the findings, while 5 discusses this with theory. Chapter 6 concludes with limitations and suggests future research.