Globally, the corporatisation of local public services has gained substantive momentum over the past decades. However, there is a research gap concerning the functioning of governance bodies, particularly boards, in municipally owned corporations. This study, analysing German municipally owned corporations, investigates the relationship between supervisory board efficacy, as attributed by chief executive officers, and perceived organisational performance. A direct relationship is not found; instead, there is evidence for a ‘catalyser’ relationship: board efficacy alleviates managerial role dilemmas, thus removing obstacles to organisational performance. The results imply that particular attention needs to be paid to the enhancement of competencies of board members and their collaboration.

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