Crisis? What Crisis? Exploring the Cognitive Constraints on Boards of Directors in Times of Uncertainty

Alessandro Merendino, Gerrit Sarens

    Research output: Contribution to journalArticlepeer-review

    5 Citations (Scopus)
    12 Downloads (Pure)

    Abstract

    Board-level decision-makers often fail to understand that a crisis is imminent and to proactively interpret environmental stimuli through their cognitive schemas. Directors have a selective perception of the environment, resulting in a filtered and narrowed vision of a crisis; this explains why boards often lack proactivity in crisis detection and response. This study draws on qualitative data from interviews with directors, chairs and CEOs of medium-large companies that were in crisis at the time of the interview or had recently tackled a crisis. We identify three main categories of factors that can hinder directors’ cognitive schemas: individual, collective and hybrid constraints. Our research contributes to the cognitive model in a context of uncertainty, exploring the mechanisms underpinning board passivity during a crisis. This study has implications for both boards of directors, who should re-design the ways in which directors respond during crisis situations, and the policymakers who support this process.
    Original languageEnglish
    Pages (from-to)415-430
    Number of pages16
    JournalJournal of Business Research
    Volume118
    Early online date20 Jul 2020
    DOIs
    Publication statusPublished - Sep 2020

    Bibliographical note

    © 2020, Elsevier. Licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International http://creativecommons.org/licenses/by-nc-nd/4.0/

    Copyright © and Moral Rights are retained by the author(s) and/ or other copyright owners. A copy can be downloaded for personal non-commercial research or study, without prior permission or charge. This item cannot be reproduced or quoted extensively from without first obtaining permission in writing from the copyright holder(s). The content must not be changed in any way or sold commercially in any format or medium without the formal permission of the copyright holders.

    Funder

    Faculty of Business and Law, Coventry University

    Keywords

    • board of directors
    • crisis
    • uncertainty
    • cognitive model
    • cognitive schemas
    • constraints
    • corporate governance
    • Uncertainty
    • Board of directors
    • Crisis
    • Constraints
    • Cognitive model
    • Cognitive schemas

    ASJC Scopus subject areas

    • Business and International Management
    • Strategy and Management
    • Marketing

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