SUPERVISORY BOARDS AND THEIR ROLE IN THE ENVIRONMENTAL
TRANSITION IN PUBLIC ORGANIZATIONS IN THE NORTH OF THE
NETHERLANDS.
Harma de Boer
S3134733
MSc Business Administration - Management Accounting and Control
15-01-2021
Master Thesis
Super Visor Thesis: prof. dr. D.A. de Waard
Co-assessor: dr. A. Bellisario
Faculty of Economics and Business
University of Groningen
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ABSTRACT
This study examines the role of the supervisory board in the environmental transition in the public sector. Previous research mainly focused on the effect of female representation on the supervisory board of voluntary disclosure on climate change information, the impact of women leaders on corporate environmental strategies on organizations, and how the relationship between and among firm’s owners, managers, and supervisory boards influence environmental performance. However, no research has been found about the role of the supervisory board to cope with the environmental transition. Therefore, this paper aims to answer the research question “What is the role of the supervisory board in the environmental transition phase within public organizations in the north of the Netherlands?”. To answer this research question, semi-structured interviews with statements are held. Respondents answered a 5-point Likert scale, with the opportunity to add comments. In total 31 respondents within the public sector participated in this research. The results of the Likert scale statements are analyzed by using SPSS, where independent variables were tested on the dependent statements. The results of this research show that supervisory boards barely monitor and advise the management board concerning the environmental transition. In general, supervisory board members are intrinsically motivated to live sustainably and they do think it is important to put environmental issues on the agenda. However, this does not necessarily result in advising and monitoring the management board. Therefore, it can be concluded that even though supervisory board members find the environmental transition important, explicit actions on monitoring and advising this transition barely occur. An implication of this study could be that respondents are asked to respond from the truth, but it cannot be checked whether a truthful or a desired answer has been given. Furthermore, the scope of this research, public organizations in the North of the Netherlands, is quite specific and small, which led to 31 respondents. Future research could provide additional insights when including private companies or including all public organizations within the Netherlands.
Keywords
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Table of Content
ABSTRACT ... 2 Keywords ... 2 1. INTRODUCTION ... 5 1.1. Introduction ... 51.2. Problem Definition and Research Question... 6
1.3. Outline of the Study ... 8
2. CONTEXT ... 9
2.1. Sustainable Development Goals ... 9
2.1.1. SDG 6: Clean Water and Sanitation ... 9
2.1.2. SDG 12: Responsible Consumption and Production ... 9
2.1.3. SDG 13: Climate Action ... 10
2.1.4. SDG 14: Life below Water ... 10
2.1.5. SDG 15: Life on Land ... 10
2.2. Transition... 11
2.2.1. Transition: Demographic Change... 11
2.2.2. Transition: Shocks ... 11
2.3. Corporate Governance Code ... 11
3. LITERATURE REVIEW ... 13
3.1. Sustainability Oriented Innovation Framework ... 13
3.2. Agency Theory ... 14
3.3. Resource Dependency Theory ... 15
3.4. Stakeholder Theory ... 16 3.5. Employer Role ... 17 3.6. Summary ... 18 4. METHODOLOGY ... 19 4.1. Data Collection ... 19 4.2. Data Analyzing ... 20 4.3. Variables ... 21 4.3.1. Dependent Variable ... 21 4.3.2. Independent Variables... 22 5. RESULTS ... 23 5.1. General Approach ... 23 5.2. Statements ... 24
5.2.1. Organizational Optimization Measurements ... 24
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5.2.3. Environmental Issues on the Agenda... 27
5.2.4. Monitoring the Environmental Impact ... 27
5.2.5. Advising Environmental Transition ... 29
5.2.6. Intrinsic Motivation and Stimulating the Organization. ... 29
5.2.7. Additional Knowledge and Expertise Attraction in Employer Role ... 31
5.3. General Perspective... 31
6. CONCLUSION AND DISCUSSION ... 34
6.1. Conclusion ... 34
6.2. Limitations ... 35
6.3. Recommendations ... 36
7. REFERENCES ... 38
8. APPENDIX ... 44
8.1. Appendix 1: Interview Protocol ... 44
8.2. Appendix 2: Respondents Table ... 52
8.3. Appendix 3: Correlation Test, Cronbach’s Alpha, Independent Variables Test ... 53
8.3.1. Appendix 3.1: Organizational Optimization Measurements ... 53
8.3.2. Appendix 3.2: Overarching Collaborations ... 55
8.3.3. Appendix 3.3: Environmental Issues on the Agenda ... 57
8.3.4. Appendix 3.4: Monitoring the Environmental Impact ... 58
8.3.5. Appendix 3.5: Advising Environmental Transition ... 59
8.3.6. Appendix 3.6: Intrinsic Motivation and Stimulating the Organization ... 60
8.3.7. Appendix 3.7: Additional Knowledge and Expertise Attraction in Employer Role ... 62
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1. INTRODUCTION
1.1. Introduction
The public sector is facing transition. This ranges from demographic change, shocks, environmental change, and technology changes to growing citizen expectations and more media pressures (Bason, 2018). Furthermore, transition is captured in the Sustainable Development Goals (SDGs), which were adopted by all United Nations Members. The SDGs implemented statements to end poverty, protect the planet, and ensure that all people enjoy peace and prosperity by 2030 (United Nations, 2020). When organizations adopt these SDGs, it may be useful to implement the triple bottom line instead of a profit approach, which provides a framework for measuring the performance of the business and the success of the organization by using an economic, social, and environmental approach (Goel, 2010). The triple bottom line can be used to measure and report the fulfillment of obligations to communities, employees, customers, and suppliers (Norman and MacDonald, 2003). This paper will focus on the environmental principles of the triple bottom line within the transition.
Besides the triple bottom line, the United Nations presents The Ten Principles of the Global Compact, which provides companies a principles-based approach to doing business (United Nations Global Compact, n.d.). These principles are divided into the areas of human rights, labor, environment, and anti-corruption. The environmental principles are “business should support a precautionary approach to environmental challenges”; “undertake initiatives to promote greater environmental responsibility”; and “encourage the development and diffusion of environmentally friendly technologies” (United Nations Global Compact, n.d.). The SDGs which are influenced by these environmental principles are clean water and sanitation, responsible consumption and production, climate action, life below water, and life on land.
To cope with the environmental transition within the Netherlands, the government has implemented measurements in line with the SDGs. For example, the Dutch government decided that carbon dioxide emissions must be reduced by 49% in 2030 compared to 1990, where a reduction of 95% should be accomplished in 2050 (Government of the Netherlands, n.d.). This measurement can be related to the SDG concerning climate action as well as affordable and clean energy. To achieve this, the Dutch government has enabled a National Climate Agreement where several sectors are mentioned to take action to achieve the climate goals, including the sectors electricity, industry, construction, traffic and transport, and agriculture and land use.
6 (Kamp, 2014). However, for consistency reasons, those sectors will be mentioned as the public sector. These public organizations have a significant environmental impact as well. Regarding carbon dioxide emissions, the healthcare sector is responsible for 7% of the total CO2 emissions, which mainly consist of energy usage, travel movements, and medicines (Sevil, 2020). Furthermore, within the sector of education, the rate of making buildings more sustainable is extremely low, as it is hard to stimulate education to become more sustainable (Julen, 2019). To increase sustainability within public organizations, these organizations should also adopt more transparency, long-term orientation, simplicity, and a holistic approach (Bason, 2018). Furthermore, environmental sustainability can also be achieved by following the Global Compact principles, including environmental-friendly technologies, which can help sustain the public sector on not only environmental but also economic and social aspects.
To cope with this environmental transition within the north of the Netherlands, a supervisory board can play an important role to motivate and coordinate businesses in these decisions. Within the Netherlands, a two-tier board structure is most common (Monitoring Commissie Corporate Governance Code, 2016). The two-tier model encompasses the management board and the supervisory board, both with separate mandates (Aluchna, 2013). Aluchna (2013) also states that both boards consist of high-profile directors who are elected to work together to sustain the long-term value of the company. Within this two-tier board structure, the management board is responsible for the daily operations. The supervisory board serves two important functions for organizations, which are monitoring management on behalf of the stakeholders and the provision of resources (Hillman and Dalziel, 2003). A third function of the supervisory board is the election of new board members as the supervisory board is the employer of the management board. When examining these functions in the theoretical framework, monitoring management can be examined via the agency theory, where the resource dependency theory contends that the provision of resources is a function of board capital (Hillman and Dalziel, 2003).
1.2. Problem Definition and Research Question
7 supervisory boards within the transition. For example, whether it is more oriented towards monitoring or the provision of capital. Though, as transition becomes more urgent, supervisory boards are expected to implement a sustainable long-term strategy (Monitoring Commissie Corporate Governance Code, 2016). Furthermore, several transitions about the role of supervisory boards are taking place. This includes a switch from monitoring the management board towards monitoring the organization its governance, a switch from internal monitoring towards monitoring within the social-environmental context of the organization, and a switch from monitoring towards the past to monitoring the long-term strategy (NVTZ, 2020). Therefore, this paper aims to overcome the gap of determining the role of supervisory boards within the environmental transition, especially in the public sector in the north of the Netherlands.
Not only is the public sector a practical consideration, as there are relatively more public businesses in the north of the Netherlands, it can also provide new insights into the role of supervisors within institutions. As stated by Carver (2011), most board members in a supervisory board in public organizations enter the board with vision and value. However, rather than having impassioned discussions about the changes they can produce in their organization, board members are commonly found listening passively to staff reports or dealing with personnel procedures and the budget line for out-of-state travel (Carver, 2011). The Dutch Corporate Governance Code (CGC) provides a guideline for the supervisory board (Monitoring Commissie Corporate Governance Code, 2016). Nevertheless, not much research is done about how the supervisory board cope with transition, and whether it is more monitoring of management or the provision of resources. As stated by Hillman and Dalziel (2003), resource dependency logic suggests that a board’s provision of resources is directly related to firm performance. This study contributes to previous research as more insights will be given about the role board members play to start transition phases within public organizations. Therefore, this paper aims to answer the following research question:
“What is the role of the supervisory board in the environmental transition phase within public organizations in the north of the Netherlands?”
This research question will be answered by using sub-statements which define the several roles of the supervisory board members within the environmental transition. The following sub-statements are concluded from the theoretical framework:
1. Supervisory board members should consider organizational optimization measurements. 2. Besides the optimization measurements, the organization should also look for overarching
collaborations to increase sustainability of the organization.
8 4. The supervisory board is monitoring the environmental impact of the organizations to guarantee
the interests of nature and climate.
5. The supervisory board is advising the management board to increase attention on environmental transition to anchor sustainability.
6. A member of the supervisory board is motivated to play a significant role in the environmental transition and stimulates sustainability towards the organization.
7. New board members should contribute additional knowledge and expertise.
1.3. Outline of the Study
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2. CONTEXT
2.1. Sustainable Development Goals
When analyzing the role of the supervisory board in the environmental transition phase, several SDGs are appropriate to take into consideration. The following section discusses the SDGs concerning clean water and sanitation, responsible consumption and production, climate action, life below water, and life on land. In general, public organizations do not often mention SDGs in their annual reports. The core business of public organizations is having a social impact, therefore they might not feel responsible to adapt SDGs in their reports (PWC, 2019). However, as PWC (2019) states, it might be useful to trace the SDGs to create awareness of underlying goals, operate with these goals, and align with new partners.
Within the European Union, the Netherlands scores relatively low on climate and energy reductions compared to the other nations in the European Union, as it is still using many fossil fuels and it is facing high greenhouse gases (CBS, 2016). Furthermore, concerning nature, water requires attention to comply with the SDGs. Lastly, the Netherlands is producing waste with an average recycling number, without a sustainable food production, which affects the SDG responsible consumption and production (CBS, 2016). Therefore, all corporations, public and private, should focus more on the environmental aspects of SDGs, to be able to fulfill these goals by 2030.
2.1.1. SDG 6: Clean Water and Sanitation
In the Netherlands, only one in three targets have been achieved regarding clean water and sanitation (CBS, 2020). One of the main targets of SDG 6 is ensuring access to safe and affordable drinking water for all in 2030. Besides drinking water, sanitation is also a clear target of SDG 6, including the target to achieve access to adequate and equitable sanitation and hygiene for all and end open defecation by 2030. Besides the clean drinking water and sanitation, this SDG also focuses on improving water quality by reducing pollution, eliminating dumping, and minimizing the release of hazardous chemicals and materials by 2030, increase efficient water-use usage across all sectors, and ensure sustainable withdrawal and supply of freshwater to address water scarcity by 2030. Furthermore, this SDG focuses on implementing integrated water resources management by 2030 and protect and restore water-related ecosystems by 2020. Lastly, on an international level, this SDG focuses on expanding international cooperation and capacity-building support in 2030 to developing countries in water- and sanitation-related activities and programs, and to support and strengthen the participation of local communities in improving water and sanitation management (United Nations, n.d.).
2.1.2. SDG 12: Responsible Consumption and Production
10 production. Within SDG 12, which is responsible consumption and production, the main targets are; implementing the 10-year framework of programs on sustainable production and consumption, achieve the sustainable management and efficient use of natural resources by 2030, halve per capita global food waste by 2030, achieve environmentally sound management of chemicals and all wastes throughout their life cycle in 2020, reduce waste generation through prevention, reduction, recycling and reusing by 2030, encourage companies to adopt sustainable practices, promote sustainable public procurement practices, and ensure access to relevant information and awareness for sustainable development and lifestyles in harmony with nature by 2030 (United Nations, n.d.).
2.1.3. SDG 13: Climate Action
Within the Netherlands, the government has decided that carbon dioxide emissions must be reduced by 49% in 2030 compared to 1990, where a reduction of 95% should be accomplished in 2050 (Government of the Netherlands, n.d.). This is in line with SDG 13, which is climate action (United Nations, 2020). The main purpose of SDG 13 is limiting global warming by 1.5 degrees Celsius. It focuses on adaptive capacity and integrating climate change measures into national policies, strategies, and planning. Besides governmental practices, education, awareness-raising, and human and institutional capacity on climate change should be improved (United Nations, n.d.). Therefore, as stated in the National Climate Agreement (Ministerie van Economische Zaken en Klimaat, Ministerie van Binnenlandse Zaken, Ministerie van Landbouw, Natuur en voedselkwaliteit, & Ministerie van Infrastructuur en Waterstaat, 2019), “Both citizens and businesses will face a series of decisions that affect how we live, our mobility, our food and diet, what products we buy and how we earn a living”.
2.1.4. SDG 14: Life below Water
The main goal of SDG 14 is to conserve and sustainably use the oceans, sea, and marine resources for sustainable development (United Nations, n.d.). Concerning the public sector in the Netherlands, the following targets are applicable: prevent and significantly reduce all marine pollution by 2025 which is particularly from land-based activities, including marine debris and nutrient pollution, minimize and address the impacts of ocean acidification, and increase scientific knowledge to improve ocean health (United Nations, n.d.).
2.1.5. SDG 15: Life on Land
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2.2. Transition
Currently, the public sector must cope with several transitions besides the SDGs. According to Bason (2018), major forces that shape the need for public sector innovation are productivity, growing citizens’ expectations, globalization, more compressing media, increase in technology innovations, demographic change, unforeseen shocks, climate change, sustainability, and global goals. These major forces also apply to the public organizations in the North of the Netherlands. As this paper is focusing on the environmental aspect of the transition, it will mainly focus on climate change, sustainability, and global goals as well as unforeseen shocks and partial productivity. Climate change, sustainability, and global goals have been discussed with the SDGs.
2.2.1. Transition: Demographic Change
Even though public organizations should thus also focus on the environmental goals, corporations and supervisory boards may have the incentive to concentrate on more coercing transitions such as demographic change. The demographic transition pressures public organizations, as there will be significant costs of serving a larger share of senior citizens in healthcare as well as the housing sector (Bason, 2018). Bason (2018) also states that it causes stress in the labor market, as baby boomers will retire, leading to diminishing talent and labor shortages in public sectors. Therefore, the focus of the daily board and the supervisory board might be focused on other significant forces in the public sector instead of optimizing an environmental focus as well. However, according to the Monitoring Commissie Corporate Governance Code (2016), supervisory boards should consider all stakeholders, internal as well as external, which therefore includes the environmental transition as well.
2.2.2. Transition: Shocks
Unforeseen shocks might also pressure the public sector. A good example is the current COVID-19 crisis, as this worldwide pandemic forced public organizations to respond quickly and effectively on changes in management and organization. Public organizations had to adequately react to these transformations. For example, new education forms had to be accomplished, and the health sector had to intensify enormously to overcome shortages in hospital beds and employees. For members of a supervisory board, it is important to act as a sounding board to discuss crisis response measures and support the CEO, as well as looking to the long-term challenges (Sutherland, 2020). During this crisis, supervisory boards may find it even harder to bring transition to the table, as crisis control might be the core business for daily management.
2.3. Corporate Governance Code
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3. LITERATURE REVIEW
This literature review provides several theories to explain the role of supervisory boards within public organizations. The sustainability-oriented innovation (SOI) framework, agency theory, and stakeholder theory will be assessed to determine the expectations of the role of supervisory boards within transition. Besides these theories, the CGC will be used to determine these expectations.
3.1. Sustainability Oriented Innovation Framework
Business organizations have a social responsibility to help address issues of public concern that relate to sustainability, as they have the resources to provide innovation (Scherer and Palazzo, 2007). When sustainability issues must be addressed, the SOI framework can be a useful tool to assess whether innovation can be considered as operational optimization, operational transformation, or systemic building (Network for Business Sustainability, 2012). To build the SOI framework, three dimensions to pursue sustainability have been revealed. First, a shift from a technical-focused, product-oriented view of innovation towards a focus of people-centered innovation (Adams, Jeanrenaud, and Bessant, 2016). The second trend focuses on the shift from a stand-alone orientation to an integrated environmental strategy implemented in the whole company. Lastly, a shift from an insular to a systemic oriented dimension is required to reach the last stage of the SOI framework, where the organization reflects itself concerning a wider society (Adams et al., 2016).
14 Furthermore, Voegtlin and Scherer (2017) stated that sustainable development consisted of three dimensions, which are ‘responsibility to avoid harm, responsibility to do good, and governance responsibility’, where the third dimension has been considered as not very well understood so far. This sustainable development model seems consistent with the SOI framework, where the third stage has been underdeveloped so far in both stages. Operational optimization focuses on the reduction of harm, where the organizational transformation phase searched for new market opportunities to create shared value, which includes the responsibility to do good. PWC (2020) stated that the management of institutions is mainly focused on financials, where implementing sustainability in the CGC enhances supervisory boards to fulfill the needs of continuity. A shift is necessary from controlling the daily management on financials towards controlling the firm on all aspects of the triple bottom line, which are people, planet, and prosperity. The supervisory board can play a significant role in governance responsibility, as it has a monitoring role as well as a role of providing capital towards the organization (Monitoring Commissie Corporate Governance Code, 2016). When the supervisory board wants to make a significant impact on environmental transition, their role in governance responsibility should be sufficient either.
As the CGC (Monitoring Commissie Corporate Governance Code, 2016) states that supervisory boards should aim for sustainable long-term strategies, it can be expected that supervisory boards are actively bringing environmental issues to the agenda of the board and are actively monitoring and advising the daily board on these issues. Furthermore, when implementing the SDGs, awareness about climate, pollution, waste, and water management can be introduced to increase sustainability within the public sector. When introducing the SOI framework, environmental sustainability should not only focus on operational optimization but also focus on more extended collaborations within and outside the organization.
3.2. Agency Theory
15 former management board members in supervisory boards decreases Corporate Social Responsibility reporting in Germany. Regarding the agency theory, it would suggest that this decrease was supported. However, a positive correlation has been found, which will not be supported by the agency theory. Therefore, it could be aligned with the long-term thinking that is expected from supervisory boards. To monitor properly, asymmetric information should be diminished, as complete transparency is required. To reach complete transparency, the CGC (Monitoring Commissie Corporate Governance Code, 2016) provides guidelines for effective collaboration and control, where it requires transparency between the management board, supervisory board, and the stakeholders as well. This code is mainly focused on long-term collaboration with stakeholders, where stakeholders’ interests should be considered, as it is a prerequisite to collaborate (Monitoring Commissie Corporate Governance Code, 2016). Furthermore, the Monitoring Commissie Corporate Governance Code (2016) states that supervisory boards should discuss strategies of long-term growth creation. The CGC has a major focus on the monitoring role instead of advising. Therefore, it can be expected that monitoring the management board will be the main task of the supervisory board. Besides that, it can also be expected that the supervisory board monitors the management board by taking into account all external stakeholders to sustain long-term growth. When implementing the agency theory from an environmental perspective, it can be expected that the supervisory board is monitoring the environmental impact of the organization and that the interests of nature and climate are considered when monitoring the organization.
3.3. Resource Dependency Theory
16 Regarding environmental transition, the resource dependence theory includes recognizing external factors on organizational behavior, to which supervisory boards can contribute to their role as a provider of capital. The role of the supervisory board within public organizations is complex, as there are more complex relationships between those with primary accountability responsibility compared to the private sector (Madhani, 2014). The board members have opportunities to add important discussions to the agenda and may advise management boards about the environmental transition. Therefore, it can be expected that supervisory boards are actively participating to put urgent environmental matters on the agenda of board meetings. Furthermore, it can be suggested that a supervisory board is stimulating the management board to behave towards an environmental transition within the organization and anchor sustainability. Supervisory boards may also use their own expertise and connections to increase environmental development.
3.4. Stakeholder Theory
A third theory that may provide significant contributions towards the role of two-tier boards in public organizations is the stakeholder theory. Within the stakeholder theory, it is assumed that a corporation has relationships with many constituent groups that are affected and will affect company decisions (Freeman, 1984). This theory is concerned with the nature of these relationships in terms of processes and outcomes for the firm and stakeholders (Jones and Wicks, 1999). The stakeholder theory can be distinguished in three different approaches, which are instrumental, normative, and descriptive (De Colle, 2005).
17 achieving such relationships. When following the instrumental approach, it can be expected that organizations are looking for collaborations in their field to improve the quality of the organization, which may improve the performance goals of the organization. Furthermore, from an environmental perspective, sustainability improvements can be reached through collaboration as well.
Third, the normative approach looks at stakeholders as an end, where individuals have legitimate rights towards the firm (De Colle, 2005). Furthermore, normative stakeholder theory suggests that the interests of all stakeholders have intrinsic value, where there is no dominant interest (Clarkson, 1995). The theory focuses on managerial decision making to create wealth for stakeholders (Donaldson and Preston, 1995). Therefore, it can be expected that supervisory boards include all stakeholders when advising and monitoring the management board. Including all stakeholders to fulfill a societal purpose may be achieved by implementing the SDGs, as the triple bottom line will be covered within these SDGs, without having a dominant interest between people, planet, and prosperity.
As environmental sustainability gains more awareness, external parties such as suppliers and NGOs should be considered when discussing the purpose of a public company. To sustain environmental changes, supervisory boards should obtain a shift from a short-term to a long-term focus (Koehn, 2013). Therefore, they might play a leading role in guaranteeing governance responsibility, as it is paramount to achieve innovation on a large scale and have a positive impact on sustainable development (Voegtlin and Scherer, 2017). However, when assessing stakeholder theory, environmental transitions within the public sector might not be pressured most by external stakeholders. Concerning healthcare, organizations must adapt to current demographic changes, such as a shrinking workforce and increasing healthcare expenditures (Gandjour, Greb, Bomsdorf, and Lauterbach, 2005). Within this healthcare example, a priority of the stakeholders and supervisory board members might be the demographic transition instead of the environmental transition. Furthermore, the motivation of the supervisory board might also affect the interests and achievements on societal issues. Previous German research showed that highly motivated non-executive directors are better at monitoring the CEO while engaging more actively in monitoring and advising (Walther, Möltner, and Morner, 2017), which could ultimately lead to higher performances in the environmental transition. Therefore, the motivation of the board members can ultimately play a significant role in the transition.
3.5. Employer Role
18 the supervisory board. The supervisory board is responsible for making a profile that should fit a potential board member. Furthermore, the supervisory board should implement a formal and transparent procedure when selecting new board members (Monitoring Commissie Corporate Governance Code, 2016). According to ‘t Veld, Van Twist, and Luursema (2002), a supervisory board member should be able to ask hard questions and should be brave enough to make hard decisions when the management board is not functioning properly. Besides that, ‘t Veld et al. (2002) also state that the ability to have an overview of the organization is important to function within the management board. Therefore, it can be suggested that board members should have a long-term vision for the organization and society. Furthermore, it can be expected that new board members should contribute with additional knowledge and expertise.
3.6. Summary
In the role of the supervisory boards, several theories may help to explain the role of the board in environmental transition. As there are many pressures within the public sector, there is no holistic perspective towards the role of a supervisory board member. Composition and intrinsic behavior might play crucial roles in the role of a supervisory member within the environmental transition. However, the agency theory, resource dependency theory, and the stakeholder theory might give several perspectives on how supervisory board members might portray themselves towards environmental transition. Therefore, the expectations of all theories can be summarized in the following statements:
1. Supervisory board members should consider organizational optimization measurements (SOI framework).
2. Besides the optimization measurements, the organization should also look for overarching collaborations to increase sustainability of the organization (SOI framework, stakeholder theory).
3. Environmental issues should be put on the agenda of meetings by supervisory board members (SOI framework, resource dependency theory).
4. The supervisory board is monitoring the environmental impact of the organizations to guarantee the interests of nature and climate (agency theory).
5. The supervisory board is advising the management board to increase attention on environmental transition to anchor sustainability (resource dependency theory).
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4. METHODOLOGY
The role of the supervisory board in public organizations in the environmental transition has so far been studied to a limited amount. The main aim of previous research had a relational approach by focusing on the effect of female representation on environmental information disclosure or environmental strategies (Ben-Amar et al., 2015, Glass et al., 2015, Walls et al., 2012). Besides that, previous research mainly focused on listed companies. This research is exploring the role of supervisory board members within the environmental transition in public organizations. These public organizations are active in the sectors healthcare, education, culture, and housing. Therefore, the board members of these organizations serve a societal function, where a profit approach might not be the main target. The role of these supervisory board members can be described as ‘how’ they contribute towards transition. Therefore, an explorative quantitative study is suitable to explain the possible role between supervisory boards and environmental transition.
4.1. Data Collection
To gather data, semi-structured interviews were held with members of the supervisory board of public organizations in the north of the Netherlands. The north of the Netherlands includes Friesland, Groningen, Drenthe, and Overijssel. The interviews were structured via statements, where a Likert scale was used with availability to add comments. The interview protocol can be found in Appendix 1. As all supervisory board members were native Dutch speakers, it has been decided to perform the interview in Dutch, so that the respondents were able to express themselves in their native language. Appendix 2 provides an overview of the 31 respondents, which is anonymous, including the sector and interview length.
20 In the end, 31 interviews were held while following a script to overcome interview bias. Two students held 11 interviews, the third one interviewed 9 people. As can be seen from table 1, healthcare and education both had 14 respondents, housing obtained 3 respondents, where no supervisory board members were found in the cultural sector. The average length of the interview was around 43 minutes. After interviewing the respondents, a transcript was made from the interviews. After transcribing, the interviews have been deleted, as was guaranteed in the consent form.
Sector Number of interviews
Healthcare 14
Education 14
Housing 3
Culture 0
Table 1: Sector of the supervisory board member
Semi-structured interviews are an appropriate method, as it not solely gathers data, but also investigates the “why” of relationships (Eisenhardt, 1998). Another possibility would be a questionnaire; however, this would be less specified and focuses less on the “why” of the relationship, therefore interviews are most appropriate to collect data. Interviews obtain a high respondent rate, where many insights can be provided on how board members see their role in the environmental transition. To determine differences in role interpretation between supervisory boards, not only role-specific questions will be asked, but also questions about the board composition and demographics, as well as sector-specific questions.
4.2. Data Analyzing
Data has been collected via a 5-point Likert scale with the opportunity to add comments. The 5-point Likert scale range from 1, which was completely disagree, to 5, which was completely agree. Respectively, possible answers are 1 completely disagree, 2 disagree, 3 neutral, 4 agree, and 5 completely agree. Besides this Likert Scale, there was an opportunity to add comments. The obtained data will be analyzed using SPSS. SPSS is a statistical software to gather, analyze, and modify data. After analyzing the statements via SPSS, all quotes were collected from the interviews to substantiate the statements and to provide new insights with the provided data.
21 supervisory board members monitored and advised the management board concerning ecological impact, becoming more sustainable, reducing the carbon dioxide footprint, and reducing waste and water usage. Therefore, these questions cover the SOI framework as well as the SDGs, which results in high face validity. When interviewing the respondents, some respondents stated that it could be likely that respondents would overrate themselves as they could be answering from the willingness to monitor and advise, instead of giving true answers about the reality. Therefore, the interviewers explicitly asked about the current situation of the supervisory board instead of their desired situation to increase face validity. Furthermore, two test interviews were held to improve statements.
Second, internal validity tests whether the theoretical frame is adequate and whether the setup of the study is credible (Roemeling, 2019). To improve internal validity, the requirement to participate was being a supervisory board member in the public sector. An invitation has been sent to all supervisory board members who are connected to the overarching platform Governance Noord, where these members could sign up to participate. Thus, the selection was random. Furthermore, dividing the participants occurred randomly as well, based on the number of participants of each respondent. Furthermore, internal validity has been improved by following a strict script to overcome response bias between the respondents and to increase validity. External validity examines whether the proposed relationships hold in other settings. To improve external validity, an introduction email has been sent to all respondents, which provides information about the SDGs to introduce the interview. Therefore, respondents would have equal background information to answer the questions properly.
Third, construct validity refers to the quality of the measuring instrument (Roemeling, 2019). Van der Bij (n.d.) states that construct validity can be measured by checking whether all questions that belong to one construct highly correlate with one and only one factor, which is the construct or the variable. This will be tested for each prediction, where valid and reliable statements will be merged. Webb, Shavelson, and Haertel (2006) stated that reliability studies have been done to estimate the consistency across repeated observations. Webb et al. (2006) also state that the Cronbach’s alpha might be the most widely used reliability coefficient, as it provides an estimate of reliability based on the covariation among items internal to the test. Van der Bij (n.d.) states that the Cronbach alpha should be bigger than 0.70 to be considered reliable.
4.3. Variables
4.3.1. Dependent Variable
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4.3.2. Independent Variables
The independent variables which have been used to determine possible influences on the statements are age, size, tenure, education, sector, whether the respondent has attended a Governance Noord meeting, and whether there are more women in the supervisory board. Table 2 provides the descriptive statistics of the independent variables. First, the median of whether there are more women on the supervisory board or not is 1, which means that most supervisory boards have more men. Second, the median of attending Governance Noord is 0, which means that most of the respondents have recently attended a Governance Noord meeting. Third, the average age is 55,81 years old. Fourth, the average size of the supervisory board is 5.52 persons. Fifth, the tenure of a supervisory board member is on average 4.5 years. Sixth, education has been separated into 4 groups, where 1 was MBO, 2 HBO, 3 was a university degree, and 4 PhD. Lastly, the sector has been divided into four groups as well, where 1 stands for healthcare, 2 for education, 3 for housing, and 4 for the cultural sector. As can be seen from table 1, there was no respondent in the cultural sector, where healthcare and age both received 14 respondents, and housing received 3 respondents.
Topic Valid Responses Mean Median Standard Deviation
More women in the board 31 0.61 1.00 0.50
Attended Governance Noord 31 0.45 0.00 0.51
Age 31 55.81 56.00 8.00
Size 31 5.52 5.00 1.03
Tenure 31 4.52 5.00 2.87
Education 31 3.13 3.00 0.50
Sector 31 1.65 2.00 0.66
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5. RESULTS
The section will present the environmental results of the interviews. Two other papers will focus on the transition of the people and the prosperity aspects. The results are based on 31 respondents who volunteered to participate. These respondents have different backgrounds and are active in several public organizations, mainly within the healthcare and education sector. The results have been examined by analyzing the SDGs concerning the environment, as well as via the statements resulted from the theoretical framework.
5.1. General Approach
The general approach of analyzing the interviews is as follows. First, the Likert scale will be analyzed. This has been done by finding the descriptive statistics for each statement including the number of valid responses, the mean, median, and the standard deviation. Not applicable answers have been removed from the dataset, as there is no relevance of analyzing for the applicability of the statement. The descriptive statistics give insight into the overall opinion of the valid respondents. Afterward, the statements made in the theoretical framework will be analyzed. First, Pearson’s correlation will be used to determine whether the statements correlate or not. If these statements correlate, it will be tested with Cronbach’s Alpha to ensure that statements can be merged, where the alpha should be higher than 0.7 (Leliveld, 2016). If the alpha is higher, statements can be merged by taking the average of the statement for each respondent, to maintain the 5-point Likert-scale interpretation. These merged statements can be analyzed.
24 many fruitful and meaningful findings. Therefore, individual statements will be treated as interval data as well.
5.2. Statements
5.2.1. Organizational Optimization Measurements
Following the SOI framework, it can be expected that supervisory boards monitor the organizational optimization measurements. Optimization measurements are used to reduce the total amount of waste and to reduce the CO2 footprint of the company. Concerning these measurements, statements 42, 43, 44, 46, and 47 are applicable (Appendix 1). Statement 42 and 43 concern the CO2 footprint of the organization and its third parties. Statement 44 provides information about monitoring the organization when investing in renewable energy. Statement 46 and 47 provide information about monitoring the reduction of waste- and water management. Table 3 provides the descriptive statistics of these statements. These descriptive statistics also include the combined statement, which is explained in the following paragraph.
Statement Topic Valid Responses Mean Median Standard Deviation
42 CO2 footprint organization 30 2.70 3.00 1.06
43 CO2 footprint 3rd parties 29 1.97 2.00 0.82
44 Renewable energies 28 2.93 3.00 1.12
46 Waste reduction 30 2.43 2.00 1.19
47 Water management 28 2.32 2.00 1.09
Emission Reduction 28 2.54 2.33 0.87
Table 3: Descriptive Statistics Organizational Optimization Measurements
As can be seen from the descriptive statistics in table 3, the mean of all statements is below 3, which means that on average supervisory board members disagree with monitoring organizational optimization measurements regarding environmental optimization. Organizations might act to improve environmental optimization, however, there is no active monitoring to anchor environmental optimization issues. When analyzing these statements, this statement will be divided into renewable energy and CO2 reduction, and waste- and water management, which comply with SDGs 6, 12, and 13. Appendix 3.1 provides the Pearson correlation test and the Cronbach’s Alpha test for each statement. As can be seen from appendix 3.1, statement 42, 43, and 44 have a significant correlation and a Cronbach’s Alpha which exceed 0.7. Therefore, these statements can be merged into a new variable called ‘Emission Reduction’, by taking the average of the three statements for each respondent. The descriptive statistics can be found in table 3. It shows that emission reduction has an average score of 2.54, where it can be concluded that the supervisory board members do not or barely monitor emission reductions.
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5.2.2. Overarching Collaborations
According to the SOI framework and the stakeholder theory, organizations should look for overarching collaborations to increase the sustainability of the organization. Relevant statements from the questionnaire are statements 56, 57, and 58. First, statement 56 concerns collaboration to ensure quality improvement. Second, 57 states the monitoring of the organization to improve sustainability through collaboration. Statement 58 concerns collaboration within the field. Table 4 provides the descriptive statistics of these statements. It can be seen from the descriptive statistics that collaboration to improve quality and collaboration within the field are answered positively by having an average above 4. This means that supervisory board members indeed monitor the organization on collaborations to develop themselves (58) and to improve quality (56). Collaborations to improve sustainability have an average of 3.30 with a high standard deviation, resulting from mixed answers from supervisory board members. As the median is 4, it can be said that overall, supervisory board members agree on monitoring the organizations to look for collaborations to improve sustainability.
Statement Topic regarding collaboration Valid responses Mean Median Standard Deviation
56 Quality improvement 31 4.13 4.00 0.72
57 Sustainability improvement 30 3.30 4.00 1.21
58 Collaboration within the field 31 4.45 5.00 0.62
Table 4: Descriptive Statistics overarching collaborations.
Appendix 3.2 provides the correlation and Cronbach’s alpha between these statements. Even though a significant correlation can be found between statement 56 and 58, the Cronbach’s alpha does not exceed 0.7, so statements cannot be merged. Therefore, all dependent statements have been analyzed by the independent variables individually, which has also been provided in appendix 3.2. No significant results have been found for statement 56 and 57, leading to no significant influences of the independent variables on the dependent statements. Concerning statement 58, the size provided significant results. However, the R-squared concerning the size is 0.141, meaning that the size is solely explaining 14.1% of the variance. Within cross-sectional data, observing and collecting data at one point in time, 0.1 to 0.4 are very common (Hill, Griffiths, and Lim, 2012). Therefore, it can be stated that the increase in the size of a supervisory board has a negative influence on the collaboration of the organization within the field (Appendix 3.2).
27 16 (appendix 4, statement 57) stated ‘no, not explicitly. That is not in the purchasing criteria. I do not know whether that is on the list, if it is on the list, I also do not know which priority it has’. Together with the descriptive statistics, it can be concluded that collaboration to improve quality and within the field is indeed monitored by the supervisory board, but this is barely extended towards sustainability collaboration, as respondent 16, 19, 21, and 23 (appendix 4, statement 57) stated that there is no attention on sustainability in collaboration. Therefore, the stakeholder theory holds considering collaborations to improve the quality of the organization, which improves the societal purpose in the organization, as can be seen in the statement of respondent 15 (appendix 4, statement 58). However, considering the environmental aspect of the triple bottom line, respondents are more neutral, where it is not explicitly mentioned, which could suggest a minority interest in the environmental aspect within the stakeholder theory.
5.2.3. Environmental Issues on the Agenda
When implementing the SOI framework and the resource dependency theory, it can be expected that supervisory board members bring sustainability issues towards the agenda. Statement 48 (Appendix 1) stated the following ‘as a supervisory board member, it is my responsibility to put sustainability issues on the agenda during board meetings’. Table 5 provides the descriptive statistics of this statement. Following the descriptive statistics, it can be stated that the average as well as the mean rank towards agree (4). Therefore, board members indeed put sustainability issues on the agenda. When testing the statement for the independent variables (Appendix 3.3), no significant results have been found. Therefore, it cannot be stated that the independent values have an influence on putting sustainability on the agenda. Respondent 23 (appendix 4, statement 48) stated ‘Agreed, I do it too limited, but I really agree with it’. Some supervisory board members mention it during the meeting as an integral part (R20, R30, appendix 4, statement 48). Therefore, supervisory board members indeed find it important to bring sustainability issues towards the agenda, but it can be increased according to respondents 16 and 23 (appendix 4, statement 48).
Statement Topic Valid responses Mean Median Standard Deviation
48 Sustainability on agenda 30 3,87 4.00 0.86
Table 5: Descriptive Statistics Environmental issues on the agenda
5.2.4. Monitoring the Environmental Impact
28 The correlation matrix and the Cronbach’s alpha can be found in Appendix 3.4. It displays that many statements correlate and a Cronbach’s alpha of 0.866 has been found, thus all statements can be merged into one independent variable ‘Monitor Environment’. This variable has a mean of 2.61, which would be between disagree and neutral towards monitoring the environmental transition.
Statement Topic Valid responses Mean Median Standard Deviation
39 Monitor ecological impact 31 2.58 2.00 1.15
40 Monitor impact nature 29 2.72 2.00 1.25
41 Environmental actions monitoring
30 3.33 4.00 1.12
42 CO2 footprint organization 30 2.70 3.00 1.06
43 CO2 footprint 3rd parties 29 1.97 2.00 0.82
44 Renewable energies 28 2.93 3.00 1.12 46 Waste reduction 30 2.43 2.00 1.19 47 Water management 28 2.32 2.00 1.09 50 Employee attention environment 30 2.50 3.00 1.11
51 Client attention environment 28 2.39 2.00 1.10
Monitor Environment 26 2.61 2.45 0.74
Table 6: Descriptive Statistics monitoring environmental transition.
Appendix 3.4 also provides the linear, ANOVA, and independent t-tests on the dependent variable Monitor Environment. As can be seen from table 6, the sector provided significant results, therefore a post hoc analysis has been performed to discover the significance. The Tukey post hoc displayed a significant relationship between sector 1, which is healthcare, and sector 3, housing. However, as the housing sector only had 2 valid respondents, no conclusion can be made as the N is too small. Therefore, no significant influence of the independent variables has been found on the variable Monitoring Environment.
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5.2.5. Advising Environmental Transition
Besides the monitoring role of the supervisory board, the supervisory board also has an advising role towards the management board, which has been explained by the resource dependency theory. When analyzing whether the supervisory board members advise the board towards environmental sustainability, statements 45 and 49 are applicable, which can be seen in table 7. These statements include advising the board about sustainable subsidies as well as advising the board to anchor sustainability issues. Respondent 16 stated ‘I agree, but we do not do this’ (Appendix 4, statement 49). Furthermore, respondent 32 (appendix 4, statement 45) said ‘We do ask ‘Do you know whether there are subsidies to do this?’, but it does not go further. We do not advise but ask. But our knowledge is not adequate either’. Therefore, together with the descriptive statistics, it can be said that supervisory boards do not advise but do think it is important to advise about sustainability.
Statement Topic Valid
responses
Mean Median Standard Deviation 45 Advising subsidies 30 2.63 2.00 1.19 49 Advising to anchor sustainability 30 2.97 3.00 1.10 Advising Environment 30 2.80 2.50 1.06
Table 7: Descriptive Statistics advising environmental transition.
The descriptive statistics show that supervisory board members do not actively advise the management board about subsidies and are neutral about advising the board to anchor sustainability issues. Appendix 3.5 provides the correlation and the Cronbach’s alpha for these statements, which are both significant. Therefore, these statements can be merged as one variable ‘Advising Environment’. When testing this dependent merged variable with the independent variables, no significant results have been found. Therefore, there is no indication that the independent variables have an influence on whether the supervisory board member advises the management board on environmental issues.
5.2.6. Intrinsic Motivation and Stimulating the Organization.
30 to live sustainably, where the respondents are neutral about advising the management board (table 7).
Correlation Statement 49
Advise to anchor sustainability Statement 38 Intrinsic motivation sustainability Pearson Correlation -0.387* Sig. (2-tailed) 0.035 N 30
*. Correlation is significant at the 0.05 level (2-tailed). Table 8: Correlation between statement 38 and 49
Furthermore, it can also be suggested that intrinsic motivated supervisory board members are also monitoring the board to stimulate the employees and clients in the organization. Table 9 provides the descriptive statistics, which shows that most board members disagree with stimulating clients and are neutral about stimulating employees. Respondent 22 (appendix 4, statement 50) stated ‘No, we do not look for stimulating employees, we do look for stimulating sustainability in general, however not specifically for employees.’ Furthermore, respondent 3 (appendix 4, statement 50) stated ‘many of these things happen implicitly, but not explicit. I am doubting; I can tell you that we are doing it, but we did not write it down. So, we have things to do’. Concerning these statements, monitoring might happen, but not explicitly.
As can be seen in appendix 3.6, the correlation between 50 and 51 is positive and significant. Furthermore, the Cronbach’s alpha is higher than 0.7 when considering statement 50 and 51. Therefore these statements can be merged into a new variable stimulating organization. When testing the dependent statement intrinsic motivation (38) for the independent variables, no significant results have been found for intrinsic motivation (appendix 3.6). Therefore, intrinsic motivation is not influenced by age, size, tenure, education, sector, whether they attended Governance Noord, or whether there are more women in the supervisory board or not. When testing the variable stimulating organization, a significant result has been found in the sector between healthcare and housing when performing a Tukey post hoc analysis (appendix 3.6), however as the sample of housing is too small (N=2), no conclusions can be made.
Statement Topic Valid responses Mean Median Standard Deviation
38 Intrinsic motivation 31 4.19 4.00 0.70
50 Stimulating employees 30 2.50 3.00 1.11
51 Stimulating clients 28 2.39 2.00 1.10
Stimulating organization 28 2.48 2.50 1.02
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5.2.7. Additional Knowledge and Expertise Attraction in Employer Role
The third task of the supervisory board is the employer role. During the interview, several characteristics have been asked about potential new (supervisory) board members. These can be found in the descriptive statistics of table 10. As can be seen from table 10, most supervisory board members indeed agree that a board member should be a transition manager and that they should have a long-term vision for the organization and society. For example, respondent 16 (appendix 4, statement 10) states that a board member should also be flexible when having a long-term vision, by taking their vision as a guideline. Furthermore, the respondents also agreed on adding new expertise and having a different opinion from the current supervisory board. For example, respondent 13 (appendix 4, statement 12) agrees, by stating that they want diversity in their supervisory board to increase discussions.
Statement Topic Valid responses Mean Median Standard Deviation
9 Transition manager 31 4.10 4.00 0.60
10
Long-term vision on
organization and society 31 4.58 5.00 0.50
11
New expertise and knowledge
supervisory board 31 4.65 5.00 0.66
12
Different opinion from current
supervisory board 31 3.55 4.00 1.12
Table 10: Descriptive Statistics employer role characteristics
The correlation matrix and the Cronbach’s alpha did not provide any significant results (Appendix 3.7). Therefore, these dependent statements had to be analyzed separately for the independent variables. Statements 9, 11, and 12 provided no significant results, which indicates that there is no influence of the independent variables on the statements. However, the independent variable age was significant when testing statement 10. The coefficient table in appendix 3.7 states the significance and the unstandardized coefficient, which provides a negative relationship between age and statement 10. By interpreting this result, it shows that when respondents get older, they tend to respond lower on having a clear long-term vision of the organization and the society. However, as can be seen from the standard deviation, the spread is minimal, as the standard deviation is -0.029, which results in small but significant differences when respondents get older. Furthermore, the r-squared shows that 22% of the variance of statement 10 can be explained by age, which is a low-effect size.
5.3. General Perspective
32 members. Most of these supervisory board members would increase their advising role instead of monitoring the board. The employer role takes 17-18 % of the time into account, which is desired. An example has been given by respondent 10 (Appendix 4); ‘Monitoring will be around 70% and advising 20%. The rest will be the employer role. It is desired to have a better distribution of tasks that is equally divided, which it also deserves. The pith of the matter is mostly monitoring, which could be due to good governance, which is wanting to have as much information as possible to judge good governance. However, I think you may also advise the management board. Furthermore, the employer role is also an important part. Not just towards the board members, but also the organization’.
Topic Valid responses Mean Real Mean Desired Standard Deviation Real Standard Deviation Desired Monitoring role 31 46.29% 39.37% 16.73% 14.22% Advising role 31 34.84% 43.57% 16.51% 15.40% Employer role 31 18.87% 17.03% 15.15% 7.57%
Table 11: Descriptive statistics role supervisory board.
Furthermore, questions have been asked about the real-time spend on the different aspects and the desired time spend on these aspects in 3 to 5 years. These aspects are social, environmental, and economic. As can be seen from the descriptive statistics in table 12, most time is spent on the economic aspects of the organization. Furthermore, a large part, namely 35.59%, is spent on the social aspects of the organization. Only 9.91% of the time of the supervisory board is spent on the environmental aspects of the firm. Respondent 19 (Appendix 4) stated the following: ‘I think it is hard. They are all important. From the sociological point of view, we have kid centers which are in the middle of the society, where children and parents come from all layers of society. Simultaneously, you also have the economic side of the story, which also includes societal aspects. For example, having enough certified employees will be tight in the following years. Furthermore, demographic decline is an issue, which will affect the way we organized things. And things as collaborations with competitors, these things will stay on the agenda. It might be true that a fight should be picked to get more attention to the ecological part. At this moment it is not 1/3, 1/3, 1/3, far from that. The first two themes are regularly coming back, the third one sometimes. It would be around 5% right now, where 15% would be a gain already. Our focus is on the development of children, which also holds for our policies. This holds for the management board as well as the supervisory board’.
33 Topic Valid responses Mean Real Mean Desired Standard Deviation Real Standard Deviation Desired Social aspect 31 35.59% 37.23% 11.78% 10.80% Environmental aspect 31 9.91% 24.57% 8.11% 9.31% Economic aspect 31 55.14% 37.55% 12.03% 11.97%
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6. CONCLUSION AND DISCUSSION
6.1. Conclusion
This paper aims to answer the research question “What is the role of the supervisory board in the environmental transition phase within public organizations in the north of the Netherlands?”. To answer the research question, 7 expectations have been made which are linked to the SOI framework, stakeholder theory, agency theory, resource dependency theory, and the employer role. The role of the supervisory board can be divided into the monitoring role, advising role, and being the employer of the organization. Furthermore, the social, economic, and environmental aspects have been linked towards the SDGs to analyze transition. To gather data, semi-structured interviews have been held where statements could be answered with the Likert scale, leaving an option to comment. To validate the data, respondents have been asked from the overarching platform Governance Noord together with connections of Prof. Dr. de Waard, to obtain a various number of respondents from all sectors. Furthermore, a script has been written so that no bias could occur between various interviews. When considering the employer role of the supervisory board, supervisory board members agree that board members should be a transition manager and have a long-term vision for the organization and society. Furthermore, new supervisory board members should contribute with new expertise and knowledge and should have a different opinion from the current supervisory board. This concludes that supervisory board members indeed seek to differentiate the board by searching for other opinions and new expertise, which may lead to additional discussions within the supervisory board.
35 Concerning the SOI framework, environmental measurements within the organization are barely monitored, as the merged emission reduction variable provides a mean of 2.54, resulting in most supervisory board members to disagree. It might be that the management board incorporates operational optimization within their policies, but this is not monitored by the supervisory board. However, supervisory board members do monitor collaborations to improve quality and sustainability. This concludes that even though supervisory board members do not monitor the organizational optimization phase, they do monitor the systems building of organizations to improve quality and sustainability by collaboration. Therefore, it might be that the organization is taking actions to improve sustainability, but solely the collaborations are monitored by the supervisory board, which mainly focuses on the improvement of quality for the organization.
Currently, a supervisory board member only spends 9.91% of the time on the environmental aspects, as most time will be covered by the economic aspects. However, within 3-5 years, this is desired to change, where it is desired to spend more time on the environmental aspects of the organization instead of economic aspects. Furthermore, supervisory boards are in general indeed intrinsic motivated to live sustainably. However, this currently does not increase the advice to anchor sustainability issues in the policy of the organization, as a significant negative correlation has been found. Also, sustainability stimulation within the organization has barely been monitored by the supervisory boards. Therefore, even though supervisory board members are motivated to live sustainably and are willing to increase their time spent on environmental transition, it does currently not reflect their behavior, as they barely advise and monitor the organization on the environmental transition.
Therefore, it can be stated that supervisory boards in public organizations are barely contributing towards the environmental transition, even though they find it their task to put sustainability on the agenda of meetings with the management board. The majority of the supervisory board members find it increasingly important for the near future to incorporate the environmental aspects within their roles as supervisory board members. However, even though supervisory board members find the environmental transition important, explicit actions on monitoring and advising barely occur.
6.2. Limitations
36 the north of the Netherlands, therefore results might be differentiated when applying this interview within the whole country because of regional differences. Furthermore, results might also be skewed by considering the public sector only, as private companies might be more aware of their environmental reputation, where public goods and services are focused on their societal value. Besides these regional and sector limitations, the response rate might also be a factor that may cause differentiated results. Supervisory board members have mostly been gathered via an overarching platform, which does not include all organizations in the north of the Netherlands. Furthermore, 31 respondents are minimal to perform a quantitative study, which has been performed by analyzing a Likert scale. However, the target population is very specific, which increases the difficulty to obtain higher number of respondents.
Furthermore, a limitation of this study may be that respondents are asked to respond from the truth, but it cannot be checked whether a truthful or a desired answer has been given. Therefore, results could be skewed more positively, as respondents solely answer from their perspective. Lastly, individual statements should officially be treated as ordinal data, however in consistency with Norman (2010) and Knapp (1990) it has been determined to treat these statements as interval data either. However, this might skew the significance tests.
6.3. Recommendations
Previous research mainly focused on relationships between board compositions and performance within listed companies. However, little research has been done about the role of the supervisory board within transition, which was the main aim of this research. This explorative research exposes that supervisory board members of the public sector are barely monitoring and advising the management board towards the environmental transition, however most supervisory board members do think this will be increasingly important towards the near future.
Future research could further elaborate on the role of the supervisory board towards environmental transition within the housing sector. The housing sector did not have a significant number of respondents in this paper. However, this sector might cope with additional environmental regulations, which forces supervisory boards to monitor and advise the management board explicitly to make houses more sustainable or to improve building houses in a sustainable way for example.
