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Interview: Dennis Veltrop, researcher of behavioural governance

Conducting research at the interface of governance and behaviour; this is what drives Dennis Veltrop. He specializes in the combination of social psychological research and economic issues. How does diversity affect the way an organization performs? How do people at the top of an organization treat each other? Who has the most influence? Which factors determine the effectiveness of a supervisory board? What is the effect of an external regulator, such as De Nederlandsche Bank?

Veltrop is an Assistant Professor in the department of Accounting. As a PhD student, he was one of the driving forces behind BoardResearch, an online self-evaluation tool for testing the performance of supervisory boards. He spends one day a week working as a researcher for De Nederlandsche Bank (DNB). ‘My research at DNB focuses on finding the best possible way to organize regulation at financial institutions. What is it that makes external regulators effective when monitoring banks, insurance companies and pension funds? It's a subject we know very little about.’

Dennis Veltrop
Dennis Veltrop

Adhesions between supervision and management

‘Our previous research into adhesions between external regulators and the financial sector they are expected to monitor is a good example. You often see a kind of revolving door effect: people whose job it was to regulate move into the financial sector and conversely, people working in the sector move into supervisory roles. The main question, of course, is how objective can you be if you've worked in the financial sector yourself for ten years? Is it really possible simply to swap hats and become a critical regulator? This is basically a behavioural problem. Surely someone who once worked in, and identified with, a sector will be less able to adopt a critical view of that sector when trying to regulate it? Things that perhaps need looking into may not stand out for someone who has subconsciously internalized them. We all witnessed the importance of critical, objective regulation during the financial crisis.’


As part of his PhD research, Veltrop helped to develop the online tool BoardResearch, which uses peer reviews to give managers and supervisory directors insight into the way the top of their organization is performing. ‘A company that uses BoardResearch manages its own self-evaluation session. The entire Supervisory Board or Board of Management is expected to complete a questionnaire. All the input generates an automatic analysis that enables supervisory directors and managers to compare their performance with that of similar organizations. It’s a bit like a car dashboard. Our report has speedometers that calculate a percentile score between 0 and 100 for numerous aspects of the performance of a Supervisory Board or Board of Management. It works extremely well, giving supervisory directors and managers immediate insight into their own performance.’

Cross-disciplinary cooperation within the Board Effectiveness signature area has resulted in new perspectives and better research, claims Veltrop. ‘BoardResearch was initially designed to see how managers and supervisory directors worked. Together with Jakob de Haan and Floor Rink, we have now managed to include external regulators, adding to the value of the process. The signature area gives us new ideas. For example, we recently compiled a new questionnaire for BoardResearch, which is an improvement on the previous version. The questions are more sharply worded, the research is more focused. We are already reaping the benefits of our new structural collaboration. Inspired by Janka Stoker and Harry Garretsen, we are now trying to work with profiles of supervisory directors and managers, profiles that give a much broader impression of managers and supervisory directors.’

Towards better regulation

The valuable insight generated by BoardResearch data can be further developed in the future, says Veltrop. ‘A great option is to combine the data from the questionnaires with observation data from board meetings. That's what we're about to do in Australia. We film and observe board meetings, so that we can evaluate the behaviour of the managers or supervisory directors. Who interrupts who? What is the chair doing? For example, the way the chair first reacts to a question has a huge influence on the way a discussion develops. Previous observation studies from Australia have shown that his/her role is incredibly important. We managed to replicate this conclusion using data from BoardResearch. The participatory leadership of the chair, i.e. the way he/she asks other board members for their opinions, is crucial. We also measured the psychological security aspect. You see that the style of the chair affects the psychological security of the supervisory directors, and therefore their inclination to speak critically. People feel less inhibited if they know that they won't be judged or punished for saying something wrong. This ultimately results in better regulation.’

Valuable cross-pollination

The conclusions generated by research like this have strong methodical foundations. Veltrop: ‘In an ideal situation, we have three sources: the peer reviews in which managers or supervisory directors evaluate each other, an analysis of the leadership style of the chair, and the perceived psychological security felt by all board members. When combined, they create a clear, objective picture. We can then safely state: the results are not coincidental, you can be confident that they reflect the real situation. This is the way we would eventually like to work in the Netherlands. It would be a fantastic product to offer to Supervisory Boards as it meets the needs of the Boards and provides us with unique data. This ambition demonstrates the power of the Board Effectiveness signature area, as my colleague Floor Rink already has ample experience with observation data. I would call this valuable cross-pollination.’

More information

See also this overview of Veltrop's ongoing projects and his profile page.

Last modified:26 March 2020 2.48 p.m.