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

    1 Citation (Scopus)

    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

    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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