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 language | English |
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Pages (from-to) | 415-430 |
Number of pages | 16 |
Journal | Journal of Business Research |
Volume | 118 |
Early online date | 20 Jul 2020 |
DOIs | |
Publication status | Published - Sep 2020 |
Funder
Faculty of Business and Law, Coventry UniversityKeywords
- board of directors
- crisis
- uncertainty
- cognitive model
- cognitive schemas
- constraints
- corporate governance
ASJC Scopus subject areas
- Strategy and Management
- Business and International Management