Klarner, P., Yoshikawa, T., & Hitt, M. A. (2018). A Capability-based View of Boards: A New Conceptual Framework for Board Governance. Academy of Management Perspectives, amp.2017.0030. https://doi.org/10.5465/amp.2017.0030
Summary
This article introduces a new way of thinking about boards of directors—not just as legal overseers or advisors to management, but as strategic actors who require specific capabilities to fulfill their evolving governance responsibilities. In today’s complex and volatile business environment, boards are expected to go beyond simply approving decisions or monitoring executives. They must help shape strategic direction, ensure agility, and guide firms through change.
Klarner et al. propose a capability-based view of boards, arguing that effective board governance depends on four critical capabilities: organizing, relationship-building, integration, and reconfiguration. These capabilities enable boards to effectively leverage directors’ individual knowledge, foster collaboration, adapt governance to new challenges, and align strategic decisions with long-term goals.
Drawing on interviews with directors from the U.S., Europe, and Asia, the authors provide rich, practical insights into how these capabilities play out in real boardrooms—and what happens when they’re missing. The paper offers a roadmap for rethinking board composition, processes, and strategy involvement, and presents actionable ideas for how boards can upgrade their governance toolkit.
Rethinking Governance: Boards as Strategic Teams
Historically, corporate boards have been conceptualized through a narrow lens—as passive monitors ensuring accountability or as advisory groups offering guidance to management. These perspectives—rooted in agency theory and resource dependence theory—primarily cast directors as overseers or sources of external legitimacy. But such roles are increasingly insufficient in today’s business environment, where firms must deal with complex, fast-moving strategic challenges.
Klarner et al. argue that boards must now be viewed as active, strategic teams, not merely as governing bodies that rubber-stamp executive decisions. This rethinking is prompted by the realities of modern business: digital disruption, regulatory volatility, ESG demands, geopolitical risk, and industry convergence all require boards to engage much more deeply in shaping corporate direction.
The authors emphasize that boards today must not only monitor but also meaningfully contribute to strategic dialogue and decision-making. This doesn’t mean stepping on management’s toes, but rather applying collective experience and judgment to assess opportunities, pressure-test plans, and help reorient the firm when needed. Boards that function well in this way become true strategic assets to their organizations.
However, to fulfill this expanded role, boards must develop specific competencies. They need to do more than assemble impressive résumés around the table—they must function as cohesive, knowledgeable, and adaptive teams. This demands not only the right people but also the right capabilities: the ability to organize themselves effectively, foster trust, integrate complex inputs, and pivot as conditions change.
This team-based view of boards brings with it a paradigm shift in governance. It requires leaders to move beyond compliance checklists and consider how their boards actually work—how members collaborate, communicate, and learn as a group. In essence, the board must evolve into a dynamic governance unit that is capable of navigating complexity and contributing to long-term corporate success.
Foundations of a Capable Board: Understanding KSAOs
To become a high-performing strategic team, a board must possess more than institutional authority—it must be built on a solid foundation of individual and collective expertise. Klarner et al. frame this foundation in terms of KSAOs: Knowledge, Skills, Abilities, and Other Attributes that enable board members to govern effectively. These aren’t just check-the-box qualifications—they are the building blocks of governance capability.
The authors distinguish between three types of KSAOs, each essential for different dimensions of board effectiveness:
a. Task-Specific KSAOs
These relate to the technical and professional expertise each director brings. For example, a board may need financial experts to assess capital structure decisions, marketing specialists to understand brand value, or technologists to evaluate digital strategies. Task-specific KSAOs ensure that boards can evaluate management’s proposals with intellectual rigor and challenge assumptions when necessary. Importantly, this type of knowledge must be relevant and up to date—what counted as digital expertise ten years ago may no longer suffice.
b. Team-Generic KSAOs
Just as in any team, interpersonal and behavioral competencies determine how well the board functions as a unit. These include communication skills, emotional intelligence, conflict resolution, adaptability, and decision-making under pressure. A board with strong team-generic KSAOs will foster respectful debate, resolve disagreements constructively, and avoid groupthink. These qualities are especially critical during strategic inflection points, where consensus may be difficult but necessary for decisive action.
c. Firm-Specific KSAOs
While external expertise is valuable, directors must also possess a deep understanding of the firm’s unique context—its strategy, culture, operations, stakeholder dynamics, and industry position. This knowledge allows directors to judge not just whether a proposal is good in theory, but whether it fits the organization’s particular reality. For instance, a global expansion plan might look attractive on paper, but only directors with firm-specific insight can evaluate whether the company’s leadership and systems are ready to execute it.
These KSAOs do not operate in isolation. Rather, their value is realized when they are combined, shared, and activated through effective board processes. This means selecting board members not only for their credentials but also for how their knowledge complements others, and how well they can contribute to collective sensemaking.
Boards that lack a balance of these three KSAO categories often find themselves underperforming—not due to a lack of intelligence or commitment, but because they are structurally or behaviorally unequipped to govern effectively. The result is a board that may look competent on paper but struggles to add strategic value in practice.
The Four Key Board Capabilities: From Individual Skills to Collective Strategic Impact
Having the right individual competencies (KSAOs) is necessary, but not sufficient. Boards must be able to activate and coordinate these capabilities at the group level. This is where Klarner et al.’s key contribution lies: they outline four dynamic capabilities that boards must cultivate to become high-performing, strategic governance bodies. These are organizing, relationship-building, integration, and reconfiguration capabilities. Each one plays a distinct but interconnected role in enabling boards to contribute meaningfully to strategic decision-making, particularly in uncertain or rapidly evolving environments.
1. Organizing Capabilities: Structuring for Strategic Focus
Organizing capabilities refer to a board’s ability to design and manage formal governance structures and internal routines in a way that facilitates effective oversight and decision-making. This includes how the board sets agendas, structures committees, distributes responsibilities, and ensures that all members are appropriately informed and prepared.
For example, high-performing boards use clear role definitions (e.g., between audit, compensation, and strategy committees) to streamline work and avoid redundancy. They establish consistent meeting rhythms, develop pre-read protocols, and use targeted briefing documents to ensure that time spent in meetings focuses on key strategic issues rather than operational minutiae.
The Netflix board, cited in the paper, is an example of effective organizing. Its directors are given curated digital information dashboards, attend top management meetings regularly, and are expected to engage in continuous learning. These routines don’t happen by accident—they are the result of intentional organizing that channels director expertise into value-added discussions.
In contrast, poorly organized boards often waste time on low-priority issues, operate with outdated committee structures, or fail to manage information flow. This creates blind spots, disengagement, or a tendency to rubber-stamp management decisions.
2. Relationship-Building Capabilities: Enabling Trust and Constructive Engagement
Boards are social systems. Relationship-building capabilities refer to a board’s ability to build interpersonal trust, psychological safety, and collaborative dynamics—not just among directors, but also between the board and senior management.
Without trust, directors are less likely to speak candidly, challenge assumptions, or raise dissenting viewpoints. With it, boards are more likely to foster open debate, explore alternative strategies, and make better collective judgments. Effective boards build these relationships through informal interactions (e.g., dinners, site visits), ongoing dialogue outside of formal meetings, and transparent communication norms.
These relational foundations also impact the board’s ability to monitor the CEO and executive team. When relationships are based on mutual respect rather than hierarchy or distance, boards are better positioned to influence, support, and when necessary, challenge management—in ways that are both firm and constructive.
Boards lacking this capability often exhibit dysfunctions like groupthink, conflict avoidance, or factionalism—behaviors that severely limit their strategic impact.
3. Integration Capabilities: Synthesizing Diverse Inputs for Coherent Strategy
Integration capabilities reflect a board’s ability to make sense of complex, fragmented, and sometimes contradictory information—and to translate this into coherent guidance. This involves drawing on the diverse KSAOs of individual members, identifying strategic interdependencies, and helping the firm align resource allocation, organizational priorities, and market positioning.
Strategic decisions rarely come pre-packaged. They require boards to evaluate risk, consider long-term trade-offs, and understand how one decision (e.g., a market exit) affects others (e.g., talent retention, regulatory relations). High-capability boards facilitate this synthesis by promoting structured discussion, scenario planning, and collaborative decision-making.
Importantly, integration capability isn’t about achieving consensus for its own sake—it’s about surfacing tensions and resolving them productively. Boards that integrate well can balance short- and long-term goals, harmonize financial and non-financial considerations, and ensure that disparate voices contribute to a stronger collective strategy.
A failure in integration can result in contradictory decisions, fragmented execution, or strategic drift. When boards operate as a set of parallel thinkers rather than an integrated team, they can’t offer effective guidance.
4. Reconfiguration Capabilities: Adapting and Leading Through Change
Finally, reconfiguration capabilities are about a board’s ability to anticipate, initiate, and support organizational change—particularly during strategic inflection points. These capabilities are crucial when firms face technological disruption, market transformation, leadership succession, or reputational crises.
Reconfiguration requires boards to move beyond monitoring the status quo and become agents of renewal. This means encouraging innovation, questioning legacy assumptions, reallocating resources, and, if necessary, reshaping the leadership team or governance itself.
Boards with strong reconfiguration capabilities understand that today’s advantage may be tomorrow’s liability. They support bold moves—like divestitures, restructurings, or strategic pivots—while also ensuring that the firm remains grounded in purpose and values. These boards maintain a forward-looking posture and help organizations build resilience in the face of uncertainty.
Boards that lack reconfiguration capabilities tend to act reactively or too late. They struggle to move past incrementalism, ignore weak signals, and may inadvertently preserve outdated strategies out of habit or comfort.
10 Practical Insights for Business Owners and Managers
- Upgrade board conversations from compliance to strategy.
Ensure the board is actively involved in shaping the firm’s long-term direction. - Evaluate not just who is on the board—but what they bring.
Map directors’ KSAOs and ensure coverage across critical strategic domains. - Formalize organizing principles.
Use structured committees, role assignments, and processes to channel expertise efficiently. - Invest in relationship-building.
Encourage retreats, informal interactions, and regular communication to build trust. - Appoint a chair who can coordinate and integrate.
The board chair should orchestrate collaboration and ensure the full board’s involvement in decision-making. - Develop firm-specific knowledge.
Encourage directors to visit operations, meet stakeholders, and learn the company from the inside. - Use external advisors strategically.
For emerging topics like AI or ESG, bring in outside experts—but ensure knowledge is absorbed, not outsourced. - Think like a team, act like a strategist.
Promote open, respectful debate and collective problem-solving. - Refresh capabilities regularly.
Conduct annual board evaluations to identify gaps and update KSAOs. - Balance short-term oversight with long-term vision.
Ensure resource decisions today align with the capabilities needed tomorrow.
Closing Thoughts
Klarner and her co-authors make a compelling case for redefining board governance through the lens of capabilities. In a world where strategy must be dynamic, innovation continuous, and disruption ever-present, boards can no longer operate as passive overseers or fragmented collections of experts.
They must function as integrated, adaptive, and strategically engaged teams, able to guide their organizations through complexity and change. Boards that build and sustain these capabilities will not only protect shareholder value—they will actively shape the company’s future success.