Document Type
Article
Publication Date
12-1-2010
Abstract
This study seeks to better understand board effectiveness by opening the "black box" associated with board dynamics and behaviors. Drawing on the process oriented perspective of board level strategic decision making from Forbes and Milliken (1999) as well as the group engagement model by Tyler and Blader (2000; 2003), we analyzed surveys from 151 board directors representing 119 U. S. publicly traded companies. Our findings show that the creation of a climate of respect within the boardroom, as well as board member and top management team (TMT) collaboration are positively related to "effort norms" and "cognitive conflict" processes. TMT and board member collaboration was also positively related to use of expertise. In turn, there was also evidence that effort norms and cognitive conflict have a positive effect on board task performance. As predicted, CEO/Board power did not have any impact on the boards' task performance. With support for how the boardroom climate conditions the strategic decision-making processes within the boardroom, future research and governance practices should look beyond a pure agency model to entertain more behavioral approaches for determining board level accountability.
Keywords
agency theory, decision making, corporate boards, procedural justice, respect, structural modeling
Rights
© The Author(s). Kelvin Smith Library provides access for non-commercial, personal, or research use only. All other use, including but not limited to commercial or scholarly reproductions, redistribution, publication or transmission, whether by electronic means or otherwise, without prior written permission is strictly prohibited.
Department/Center
Design & Innovation
Recommended Citation
Bailey, Bernard C., "Boardroom Climate: Understanding How It Impacts Board Level Strategic Decision Making" (2010). Student Scholarship. 102.
https://commons.case.edu/studentworks/102
