Board Socio-Cognitive Decision-Making and Task Performance Under Heightened Expectations of Accountability

Abstract

This study examines how heightened expectations of board responsibility and accountability affect the socio-cognitive decision-making of boards and their collective task performance. Using data from the directors of 60 boards who served before and after the enactment of Sarbanes–Oxley, this study provides insight into the potential negative impact that this tightened accountability environment can have on a board’s task performance. Examining several socio-cognitive elements of board decision-making, board authority is found to have a positive main effect on board task performance, while relative CEO power and affective conflict have curvilinear relationships with board task performance. Cohesiveness also moderates the relationship between a board’s perceived uncertainty and affective conflict with board task performance. In sum, the model shows how a new era of director accountability can affect the social cognitions of board decision-making that underlie board task performance.

Keywords

boards of directors cohesiveness conflict corporate governance social cognitive theory

Recent corporate governance research suggests that over the last few decades, shareholders have increased their vigilance and power over boards by threatening proxy battles, filing shareholder proposals, and promoting corporate by-law changes (Goranova & Ryan, 2015; Ryan, Buchholtz, & Kolb, 2010). This trend began with changing regulations and, in particular, the Sarbanes–Oxley Act of 2002 (SOX), a pivotal turning point in corporate governance. The changes ushered in by SOX, and subsequent new requirements from the stock exchanges, created a completely altered set of expectations for U.S. corporate boards, including mandates for increased board independence and changes in board structure that affected board monitoring (Clark, 2005). Combining increased regulations with the public’s heightened expectations of directors’ responsibilities (Dah, Frye, & Hurst, 2014), boards and their directors find themselves needing to be more accountable to shareholders than they have ever been.

In the wake of such change, it is unclear how directors have been affected in their ability to perform key tasks and, in particular, how board members cognitively process changes in their environment that might affect their task performance. Forbes and Milliken (1999) first identified the concept of board cognition in corporate governance as they examined the ways that boards cooperate, exchange information, and evaluate alternatives. This study revisits their framework to look into the “black box” of board cognitions in decision-making (Carpenter & Westphal, 2001). Despite some existing research linking board cognitions to composition and power relationships (Park, Westphal, & Stern, 2011; Westphal, 1999; Westphal & Shani, 2016), much remains to be learned about the cognitive aspects of board decision-making (Minichilli, Zattoni, & Zona, 2009), particularly in the context of changing, and increasing demands on board members to be more vigilant. Therefore, we ask, what are the cognitive influences on board task performance in a new era of director accountability?

To address this question, we draw on social cognitive theory (Bandura, 2001) and test a theoretical model linking board cognitions to task performance (Forbes & Milliken, 1999, 2009). Social cognitive theory hinges on how individuals and groups acquire certain behavioral patterns through a blend of personal, environmental, and behavioral influences (Galperin, Bennett, & Aquino, 2011). This study extends the model of board cognition posed by Forbes and Milliken (1999) to suggest that the effectiveness of boards will depend on board members’ socio-cognitions in addressing tasks of control and service, generally referred to as board task performance, under changing environmental conditions. We identify and evaluate the socio-cognitive elements that underscore board motivation and decision-making (Bandura, 1997; Giddens, 1984). Through a socio-cognitive lens, this study examines how directors collectively react to increased pressures to be more accountable and vigilant in this new era.

Effective board behavior is contingent on productive group processes that enable the board to function as a group and manage risks together, as well as cooperate and exchange information to perform their strategic functions (Yukl, 2008). When norms change in response to environmental influences, it is often difficult for decision-making groups to adjust their perspectives (Dean & Sharfman, 1996). Our findings explain board-level cognitive losses in group decision-making that link to behaviors (Steiner, 1972). These losses, originally identified in Forbes and Milliken’s (1999) framework, occur when board members have difficulty interacting effectively, limiting their collective ability to exchange information and engage in critical discussion. In expanding and then testing their original work within a unique context, this study contributes to social cognitive theory by linking cognitions to performance. We conclude with implications for practice that are particularly timely as boards readjust their decision-making to cope with shareholder calls for more board accountability.

Theoretical Background

Social cognitive theory is a broad theory of human behavior that examines how the social environment influences the ability of a group to plan, think, gather collective power, and self-regulate (Bandura, 2001). Cognitive elements include those things that allow individuals to assign meaning to events, plan courses of action, and regulate motivation, emotion, and interpersonal behavior (Cervone, 1991). Theoretical frameworks utilizing social cognitive theory generally examine the interplay of environmental, interpersonal, and behavioral factors in a given context to understand behavioral changes. In corporate governance, researchers have used cognitive theory to understand the socio-political and socio-structural aspects of board relationships, including the rules, social practices, and sanctions that affect board roles, as well as in-group versus out-group identifications by individual board members (Carpenter & Westphal, 2001; McDonald & Westphal, 2003; Westphal & Zajac, 2013).

Forbes and Milliken’s (1999, 2009) model of U.S. board processes was one of the first theoretical frameworks to link socio-cognitive factors to board task performance. Their study focused on effort norms, conflict, and cohesiveness as the socio-cognitive elements in board decision-making, with impact on board service and control tasks. However, they also noted that decision-making groups are vulnerable to cognitive losses when their interactions change during the exchange of information and critical discussion (Milliken & Vollrath, 1991; Steiner, 1972). Launching off this insight, this study looks at board cognitions in the realm of the public’s heightened expectations of director responsibility, and the potential for cognitive losses in this particular decision-making context.

With a newer context of social movement and shareholder empowerment (Ryan et al., 2010) made more prominent in a post-SOX era, boards of directors are required to be more transparent and demonstrably independent from the management of the company. The rise in governance reforms has led to increased pressure on boards to be more vigilant (Pugliese, Minichilli, & Zattoni, 2014). These pressures come from a host of salient stakeholders that the board must address, including the media, private governance ratings agencies, large institutional shareholders, independent auditors, stock exchanges, state courts, and regulators. While increased responsibility and control should enable boards to perform more effectively, new mandates have also been seen to stymie the ability of directors to perform their job tasks and work together as a group. For example, empirical research has shown that since SOX, boards have had problems recruiting directors to take on more tasks (Linck, Netter, & Yang, 2009), in addition to focusing on monitoring at the expense of advising (Dah et al., 2014; Faleye, Hoitash, & Hoitash, 2011).

Under a social cognitive framework, such environmental changes could alter directors’ perceptions of norms (Khurana & Pick, 2005) and the way that directors interact and exchange information (Butler, 1981). This would affect the collective efficacy that is important to the group’s ability to succeed (Bandura, 2001). Should the board’s activities equate to lower board task performance,¹ it would indicate a difficulty in incorporating the additional tasks into the board’s routines, with cognitive losses resulting from group activities.

While there are many ways to classify cognitions in executive decision-making, this study includes several constructs beyond those identified in Forbes and Milliken (1999) that span the perceptions and attributions of board actions (Haleblian & Rajagopalan, 2006). First, the “perceived uncertainty” of the board in the wake of heightened expectations would reflect the board’s perceptions of the environment (Lerner & Tetlock, 1999; Miller, 1987). Perceived uncertainty is a socio-cognitive element important to organizational management and decision-making (Ellis & Shpielberg, 2003; Lind & Van den Bos, 2002). Next, board authority and CEO/board relative power are socio-structural issues that are part of board cognition (Carpenter & Westphal, 2001) and important to board effectiveness (Westphal & Graebner, 2010). In addition, two key constructs, affective and cognitive conflict, have been shown to be important to executive decision-making and group interactions in different contexts (Amason & Sapienza, 1997). Finally, board cohesiveness (Summers, Coffelt, & Horton, 1988) is central to “the affective dimension of members’ inclusion on the board” and decision-making (Forbes & Milliken, 1999, p. 493). Collectively, these constructs enhance the Forbes and Milliken (1999) model, shown in Figure 1, to reflect board cognitions that might influence task performance given the backdrop of a new governance climate.

Figure 1.

Theoretical model linking board-level reactions and cohesiveness to performance.

Hypotheses

Perceived Uncertainty

“State uncertainty” is a perceptual phenomenon known as the “descriptor state of a person who perceives himself/herself to be lacking critical information about the environment” (Milliken, 1987, p. 134). Otherwise known as perceived uncertainty, it occurs when aspects of the work environment might be changing, including changing industry norms (Miller & Shamsie, 1999), regulations (Birnbaum, 1984), newer roles (Lerner & Tetlock, 1999), or confusion about stakeholder relationships (Milliken, 1990). It is a socio-cognitive element in that it affects the decision-making abilities of managers in organizations as they cope with environmental uncertainties (Ellis & Shpielberg, 2003), and it is particularly applicable to the uncertainties that top-level executives experience in the wake of environmental change (Milliken, 1987, 1990).

In our context, the rise of shareholder empowerment actions over the past two decades (Goranova & Ryan, 2015) has created uncertainty for directors. The board of directors is the group that establishes norms of behavior at the individual company level (Aguilera & Cuervo-Cazurra, 2009). Board members must balance monitoring and incentives for good governance under agency theory (Rutherford & Buchholtz, 2007; Ward, Brown, & Rodriguez, 2009), and they must work together to provide material and symbolic guidance and to establish rules of action (Jackall, 1988). At the same time, the shareholder empowerment movement has created a new era of accountability for directors both directly through shareholder participation in corporate decision-making, and indirectly through their ability to hold directors more accountable (Goranova & Ryan, 2015). The consolidation of power into large, institutional shareholders has created the opportunity for shareholders to influence favorable legislation and regulation (Ryan et al., 2010). With a focus on improving director oversight (Leblanc & Gillies, 2010), this additional accountability comes with unique behavioral challenges for boards as they try to understand how to adjust to the increased monitoring and advising that they must do, as well as the increased extent to which they will be monitored.

The changing governance landscape has the potential to affect directors’ ability to monitor for agency costs as well as to provide advice and counsel to management under a “shifting sand environment” (Lorsch, 2012, p. 11). Perceived uncertainty can undermine a group’s efficacy and effectiveness (Gibson, 1999) and affect the ability of directors to interact and exchange information for critical discussion and decision-making inside the boardroom. It can contribute to inefficient and ineffective actions as group members “muddle through” tasks (Lindblom, 1959) or even become “paralyzed” in the strategic planning process with top management team members (Milliken, 1987). Hence, we posit the following hypothesis:

Hypothesis 1: The greater the level of perceived uncertainty by the board, the lower the board task performance.

Perceived Board Authority

The concept of authority is complex and includes both formal authority and informal influence. Authority consists of the right to decide actions affecting part or all of an organization, as well as the effective power and control over decisions within organizations (Aghion & Tirole, 1997). The perception of authority is an element of socio-cognition because it influences how individuals understand and deal with other people. Socio-cognitive theory suggests that perceived authority is an element of group decision-making important to managing conflict, understanding directives and generating compliance with decisions (Lind & Tyler, 1992). Pearce and Zahra (1991) first applied the construct to board settings when they asked board members to assess the amount of authority that they had in decision-making to develop a typology of CEO/board powers. Perceptions of authority and power are a component of the politics of organizational decision-making (Pettigrew, 2014) and may help boards to process the impact of their strategic actions (Haleblian & Rajagopalan, 2006).

Since the scandals of the early 2000s, and with support from multistaged institutional campaigns, boards have been placed in a position to make changes and stipulations on board composition, ownership and committee structures, executive compensation, and the number of executive directors (Ryan et al., 2010). In this era of greater director accountability, some boards may feel that they have more authority and ability to make changes than other boards do. Indeed, the perceived authority to make changes and exert influence on behalf of shareholders is a key facet of the enforcement of newer directives. Board members must believe that they have the authority to make changes to be effective in their monitoring and advising roles; as a social group, it is a key element shaping both informational and normative social influence processes (Main, O’Reilly, & Wade, 1995) to ensure that they are able to perform their jobs effectively. Thus, perceived board authority should be directly tied to board task performance.

Hypothesis 2: The greater the level of perceived board authority by the board, the greater the board task performance.

CEO/Board Relative Power

While our theoretical framework on board cognitions focuses on perceptual measures, one of the distinctive features of boards as groups is their relationship with the CEO. The relationship is socio-cognitive in nature because directors must understand and assess the CEO, including perceptions of performance that rely on sense making and interpretation (Haleblian & Rajagopalan, 2006). Directors also face extreme information complexity in evaluating strategic decisions, and the CEO is part of the “knowledge structure” that informs them about the environment (Carpenter & Westphal, 2001). Information complexity and social cognition are linked because the more complex the information, the more difficult it is for individuals to perceive, attend to, remember, think about, or make sense of people in social settings (Moskowitz, 2005). The relationship between board members and the CEO is an important one that can shape the level of involvement of board members in decision-making (Carpenter & Westphal, 2001), the ability of board members to collaborate in the boardroom (Westphal, 1999), and the ability of board members to manage the political nature of board independence (Joseph, Ocasio, & McDonnell, 2014). The managerial discretion afforded to the CEO by the board is a function of the directors’ perceptions about the political and power dynamics within the boardroom (Lorsch & MacIver, 1989).

Elevated expectations of director responsibility and accountability have been accompanied by governance changes that have inexorably changed CEO/board relationships (Joseph et al., 2014), including CEO social and structural independence from both management and boards (Westphal & Zajac, 2013). While there is evidence that this independence may have prompted CEOs to engage in ingratiatory behavior toward different stakeholders (Westphal & Bednar, 2008; Westphal & Stern, 2006, 2007), the explicit power of the board vis-à-vis the CEO in this new era alters the CEO’s ability to pursue his or her agenda. New independent directors may be invited to join a board to shore up a particular area of expertise that may have been previously lacking (Joseph et al., 2014). In addition, CEOs may be asked to step down from dual CEO/chairman positions so that boards can more effectively evaluate the CEO (Monks & Minow, 2011). When the CEO’s latitude of action declines, boards have more power to perform both their control and their advice tasks for better firm performance (Combs, Ketchen, Perryman, & Donahue, 2007). These tasks include decisions regarding the hiring, compensation, and replacement of senior managers, as well as advising activities that include providing expert insight to and coaching the CEO about acquisitions or restructurings and strategic alternatives (Forbes & Milliken, 1999). Thus, we add to our framework the socio-structural element of CEO relative power and hypothesize as follows:

Hypothesis 3: The lower the relative power of the CEO, the greater the board task performance.

Board Conflict

Another element of social cognition in executive group decision-making is the concept of conflict (Jehn, 1995), which occurs when individuals in social interactions have different responses to the same problem (Levine, Resnick, & Higgins, 1993). Conflict is an expression of attitude that is implicit in the way that humans in groups process information and apply their knowledge and skills to a decision-making process (Jehn, 1995). When an organization’s environment has changed radically and roles are modified, conflict can arise between decision makers as they grapple with change that forces them to re-evaluate current ideas and standards (Tjosvold, 1991). It is relevant to boards because members have different educational, functional, and industry backgrounds that lead them to respond to issues differently (Williams & O’Reilly, 1998). In addition, the issues that they face are complex, ambiguous, and subject to debate (Forbes & Milliken, 1999), problems made more challenging in the post-SOX era of greater director responsibility. Social cognition theory suggests that two different types of conflict may emerge in the social interaction of board members—affective and cognitive conflict (Amason, 1996; Amason & Sapienza, 1997)—with corresponding dysfunctional and functional effects on decision-making.

Affective conflict is notably dysfunctional. It is characterized by personal incompatibilities or disputes that arise when cognitive disagreement is perceived as personal criticism (Amason, 1996). In the context of newer pressures for directors, this type of tension may result from the cognitive dissonance created, as the monitor and advisor becomes the monitored; that is, the board whose role it is to monitor and advise management becomes increasingly scrutinized by external agencies (Cohan, 2002). Cognitive dissonance is a bias that takes place when the human mind cannot reconcile information inconsistent with one’s prior attitudes (Festinger, 1957). Anecdotal evidence suggests that this is the case for U.S. directors; for example, one reporter noted that “. . . the chumminess and banter (among directors and between directors and CEO) has given away to a more adversarial attitude” (“The Boss on the Sidelines,” 2005, p. 88). After the passage of the Dodd–Frank financial reform bill, CNNMoney reported “grumbling and gnashing of teeth” by many board members (Bloxham, 2011).

Emotions, distrust, and fear can be reactions to changes in governance that increase the separation of responsibilities and add additional accountability (Sundaramurthy & Lewis, 2003). Disputes between the board and the CEO can produce strained relationships and hostility (Brehmer, 1976). In addition, shareholder allegations of directors’ excessive checklisting and ineffectiveness in addressing strategic issues can increase tensions between directors (Schmidt & Brauer, 2006). All of these issues can create cognitive dissonance for board members that can trigger negative emotions (Korsgaard, Jeong, Mahony, & Pitariu, 2008), as might be the case when directors feel the pressure of more scrutiny from “de facto regulators” like proxy governance firms that directors might believe are “too formulaic” and “prescriptive” (Lorsch, 2012, p. 10). The resulting affective conflict will inhibit directors in their ability to perform effectively as a unit. Therefore, we hypothesize as follows:

Hypothesis 4: The greater the level of affective conflict experienced by the board, the lower the board task performance.

Cognitive conflict is also inevitable in strategic decision-making when top management teams and board members take different viewpoints in different environments (Amason & Sapienza, 1997). Cognitive conflict arises when group members coming from different backgrounds and perspectives bring those different experiences to a decision discussion. It is defined as “task-oriented disagreement” that can force a group to re-evaluate current ideas and standards in light of their different perspectives. Unlike affective conflict, it is generally conducive to information gathering and the evaluation of alternatives in decision-making, both important to task performance (Schweiger, Sandberg, & Ragan, 1986). In the context of greater director accountability, cognitive conflict can be vital to identifying the perspectives required for effective board decision-making.

Cognitive conflict has been found to be crucial to board effectiveness in the professional discussion of opposing views, the expression of personal judgment, the critical evaluation of company performance, and the deliberate processing of information (Zattoni, Gnan, & Huse, 2015). Forbes and Milliken (1999) noted that it is especially crucial to the board’s “control role” in assessing and evaluating the CEO. This characteristic would be particularly important in a newer governance environment that requires directors to interpret new mandates to make informed decisions about monitoring, incentive alignment, and the provision of advice to management. Unlike affective conflict, where emotions and tensions might impede critical decision-making in a newer governance environment, cognitive conflict may contribute to higher decision quality, particularly in uncertain scenarios (Priem, Harrison, & Muir, 1995), because it enhances understanding and allows board members to exercise their voices in the decision-making process (Folger, 1977). Therefore, we propose the following hypothesis:

Hypothesis 5: The greater the level of cognitive conflict experienced by the board, the greater the board task performance.

Cohesiveness

Boards, as social groups, share social norms and values that regulate their opinions and influence their cognitions (Turner, 1982). Cohesion reflects the nature and quality of the bonds of the group and, specifically, “the resultant forces which are acting on the members to stay in a group” (Festinger, 1950, p. 274). Board cohesiveness has been further defined as “the degree to which board members are attracted to each other and are motivated to stay on the board” (Summers et al., 1988, p. 629). It is an important construct to successful group performance as evidence exists that when group members are committed to a group, they will exert more effort toward performance (Mullen & Copper, 1994) and will remain viable (Chang & Bordia, 2001). It is particularly important to boards’ decision-making because members must feel at least a minimum level of interpersonal attraction (Forbes & Milliken, 1999; Westphal, 1999) and mutual trust (Sonnenfeld, 2002).

While it may be true in practice that boards operate with cohesiveness (Bainbridge, 2002), mandates for more board vigilance can affect the levels of board cohesiveness and the directors’ ability to achieve consensus in decision-making when they experience cognitive dissonance in their enhanced roles (Festinger, 1957). Changes in the external environment affect the framework by which directors manage their internal interdependence, their capacity for feedback, their equilibrium of decision-making processes, and their ability to manage equifinality and adaptation (Nicholson & Kiel, 2004). Cohesiveness decreases when group members feel internal frustration or threat, which may be attributable to skill deficiencies (Hogg, 1992). Consequently, a lack of cohesiveness can undermine the board’s ability to perform the control and advice functions of board task performance, as well as the board’s ability to control for agency costs. Lower group cohesion can restrict information processing and constrict control in a way that is not conducive to effective decision-making (Gladstein & Reilly, 1985). Thus, we propose the following hypothesis:

Hypothesis 6: The lower the level of cohesiveness of the board, the lower the board task performance.

Cohesiveness as a Moderator of Board Task Performance

In addition to having a main affect, cohesiveness can also moderate the social cognitions that come with group membership. The cognitive dissonance that directors experience as they question the legitimacy of new mandates can change group relational patterns and create psychological discomfort between group members, limiting their ability to come together to do their jobs. In addition, boards can lose their sense of “we-ness” (Owen, 1985) and their common commitment to group tasks in a way that is separate from emotional disagreements (Paxton & Moody, 2003). Cohesiveness can therefore affect other group behaviors, because it is generally perceived to “. . . exert its effect on performance by improving coordination between members and thereby enhancing the smooth operation of the group as a whole” (Man & Lam, 2003, p. 981). In fact, Amason’s (1996) study on affective and cognitive conflict and strategic decision-making noted that “some top management teams may do a better job of managing conflict than others” (p. 144), suggesting other relational group elements might enhance or detract from group strategic decision-making process and performance outcomes. Therefore, it follows that board cohesiveness may moderate the relationship between board socio-cognitions and board task performance, yielding the following hypothesis:

Hypothesis 7: The relationship between board cognitions and board task performance is moderated by board cohesiveness.

Method

Sample and Data Collection

The sample consists of U.S. publicly held companies selected from the Investor Responsibility Research Center (IRRC) and ExecuComp databases where at least the board chairperson and two directors from each company were in place prior to 2002 (pre-SOX) and still in place in 2007, as well as companies from the database of a major business school’s Directors College. A pen-and-paper mailed survey (see the appendix) was designed to assess the reactions of directors to governance changes. Similar to other cross-sectional studies of board members, our cover letter guaranteed anonymity and careful attention was paid to the wording of our survey to provide context to reduce ambiguity (Minichilli et al., 2009). Specifically, directors were asked to reply to measures of perceived uncertainty, board authority, affective conflict, cognitive conflict, cohesiveness, and board task performance. A first mailing was sent to 1,103 board chairpersons asking that they complete the questionnaire and whether they would agree to have their board used in the study. After this mailing, 311 companies dropped out of our original sample due to address and/or leadership changes, leaving a pool of 792 companies. From this, 60 board chairpersons agreed to participate, for a response rate of 7.6%. To permit inter-rater reliability assessments, a second survey was sent to the directors of each company whose chairperson responded to the first survey (n = 429) and who had been on the board since 2002. In the manner of Westphal (1999), directors who sat on more than one board were asked to respond for only the one company corresponding to the respondent chairperson and the chairperson was not surveyed twice. We received 57 responses to this survey (a response rate of 13.3%), resulting in a sample of 117 directors from 60 firms; 21 firms had one chairperson respondent, 25 firms had two respondents (one chairperson and one other director), and 14 firms had three or more respondents (one chairperson plus two or more directors). All members had been on their respective boards since at least 2002.

Surveys for corporate managers have notably low response rates; however, to our knowledge, this study is unique in that all groups included a board chairperson and all groups had directors who had been in place prior to and at least 5 years subsequent to SOX. In addition, our response rate was close in line with previous research on boards of directors (Cycyota & Harrison, 2006; Minichilli, Zattoni, Nielsen, & Huse, 2012). The 60 companies represented in our sample encompassed 23 different industries in two-digit Standard Industrial Classification (SIC) categories, ensuring an adequate representation of the sample population. Firms ranged from US$18 million to US$28 billion in assets. A second sample group of 100 companies from the original 1,103 companies was assessed for non-response bias using the Kolmogorov–Smirnov test (Siegel & Castellan, 1988), looking at board size, return on assets (ROA) performance, return on equity (ROE) performance, and industry. The results showed no significant differences between the two groups of companies. The average size of the companies was US$43 million in revenues. All of the sample companies had unitary (non-classified) boards, without board term limits or mandatory director retirement. Board size ranged from four to 23 board members, with an average board size of 9.87 members. Although not used as a control variable in our study, director ages ranged from 42 to 84 years of age. Of the 60 companies in our sample, 10 of the firms had chairpersons that were associated with founding families of the companies. Only one of the board chairpersons was a non-executive chair, and all chairpersons had been in place for an average of 4 years prior to SOX.

Measures

As noted above, data for the exogenous variables—uncertainty, authority, and affective and cognitive conflict—were gathered through surveys, as were data concerning the dependent variable of board task performance. The use of a self-reported dependent variable is consistent with other studies of board task performance (Huse, 1993; Minichilli et al., 2009). Data for the exogenous variable of the change in CEO/board relative power and the control variable of firm performance were gathered through company proxy statements under the DEF 14A report issued by the Securities and Exchange Commission.

Perceived uncertainty

We used six Likert-type items from a set of sub-scales that measured perceived uncertainty developed by Downey, Hellriegel, and Slocum (1977) in their revision of the original Lawrence and Lorsch (1967) instrument. We tailored the instrument to the setting of boards as identified by Forbes and Milliken (1999): (a) the clarity of job duties in the areas of audit, selection, and compensation (i.e., “To what extent are you clear on your job duties in the following areas since the new governance reforms?”) and (b) the perception of heightened difficulty of the tasks that they perform in developing new strategies, adding value to the organization, and monitoring agents and protecting shareholder interests (i.e., “Describe the degree of new difficulty the board has in accomplishing the following since the new governance reforms”). Respondents used a Likert-type scale from 1 to 6, with higher scores indicating more uncertainty (α = .80).

Board authority

Board authority was assessed using 15 items adapted from a study by Pearce and Zahra (1991) about decision-making authority. Board-specific measures of self-perceived authority were used, and each director was asked to answer, “Please rate how much your decision-making authority has changed since the passage of Sarbanes–Oxley?” on a Likert-type scale from 1 to 6, with 1 = less authority and 6 = more authority (α = .94).

CEO/board relative power

We follow the methodology and logic of Zajac and Westphal (1996) whereby high relative tenure is associated with expert power through “familiarity with an organization’s resources and methods of operation” (p. 74). Because the variable in question is a change variable, we gathered board and CEO tenure information from company proxy statements, and took the value of the relative CEO tenure to board tenure at T1, pre-SOX at 2002, and compared it with the same tenure ratio at T2 in 2006. To isolate the ratio change due to shifts in board composition rather than merely the elapsed time, the ratio was corrected for the time lapse between T1 and T2.² As we have argued that the social-movement context of shareholder empowerment affected the board and the previous power of the CEO, we evaluate the difference in CEO/board tenure from 2002 to 2006.

Affective and cognitive conflict

Affective and cognitive conflict were measured with seven items from the Interpersonal Conflict Scale developed by Jehn (1994) and used by Amason (1996) in a study of top management team settings. Directors were asked to “think of a recent board decision where there were differences of opinion about compliance issues.” The first four items measured affective conflict with questions, “How much personal friction was there in the group during the decision?” “How much were personality clashes evident during the decision?” “How much tension was there in the group during the decision?” and “How much antagonism was there among the group over this decision?” The last three items measured cognitive conflict with questions “How many differences of opinion were there within the group over this decision?” “How many differences about the content of this decision did the group have to work through?” and “How many disagreements over different ideas about this decision were there?” (α = .89 and .86, respectively).

Cohesiveness

Cohesiveness was measured using eight items from the index used by O’Reilly and Caldwell (1985) in a study of board member behaviors. Directors were asked to rate the extent to which directors are less/more cohesive since the passage of SOX on a scale of 1 to 4, with 1 = much less and 4 = very much more. Questions asked interviewees to rate the extent to which board members (a) are ready to defend each other from criticism, (b) help each other on the job, (c) get along with each other, (d) stick together under pressure, (e) are united in trying to reach goals for performance, (f) have conflicting aspirations for board task performance, (g) communicate freely about each other’s responsibilities, and (h) take responsibility for loss of performance (α = .78).

Board task performance

Boards are charged with the duty to represent shareholders. Board task performance reflects the board’s ability to perform its fiduciary duties toward these shareholders. While this comprises a number of duties, these duties can be broadly distributed into two functions. First, boards monitor and discipline management where necessary and provide incentives to management such that management is acting in the best interests of shareholders. Second, boards provide advice and counsel to management on strategically important areas of concern to the firm. To assess board task performance in these two functions, we developed a seven-item scale adapted from Amason and Mooney’s (1999) decision quality and affective acceptance scales, as well as from Forbes and Milliken’s (1999) description of board task performance. Items related to both the monitoring, discipline, and incentive alignment functions (e.g., “Hiring, firing, and compensation decisions”) and the ability to offer valued advice (e.g., “Providing expert insight during major events,” “The value of the advice and analysis that board members contribute”) as well as summary items of overall performance (e.g., “The overall quality of board decisions,” “The quality of board decisions regarding organizational performance issues”). Respondents were asked to “rate the extent to which board decision-making declined or improved in the following areas since the passage of Sarbanes–Oxley” on a Likert-type scale from 1 to 7, with higher scores indicating higher performance (α = .93).

While some voice concerns about self-report measures as dependent variables, there is theoretical rationale for this choice. Forbes and Milliken (1999, 2009) argue that directors themselves are self-aware of the things that they do on the job. Therefore, our dependent variable measures relate theoretically to this framework and answer the call for more direct measures of board task performance (Huse, 2005). In addition, it is an appropriate methodology when validity can also be demonstrated (Conway & Lance, 2010), as we do in our analysis. Finally, it was necessary to use different self-report measures to preserve the item validity for established constructs used in prior studies. It is often preferable to do this to maximize the variance on a specific measure (Harrison & McLaughlin, 1991).

Controls

Several theoretically relevant variables that might exhibit shared variance with board task performance were treated as control variables. While empirically it can be difficult to tie director decision-making to firm performance (Cascio, 2004), theory suggests that firm performance can influence board governance decisions (Ward et al., 2009) and empirical evidence shows that shareholders recognize that internal governance mechanisms are the first line of defense to correct for underperformance (Hambrick & D’Aveni, 1992). Therefore, we controlled for firm performance, calculated as the firm’s change in ROA, and measured as net income divided by total assets, from 2002 to 2006 relative to average industry ROA performance. We also controlled for change in ROE, measured as net income divided by shareholder equity from 2002 to 2006 relative to average industry ROE performance.

Several other variables that have been shown to influence board decision-making were considered and tested as possible controls. Board size was gathered from proxy statements, as larger groups are more difficult to manage and have more difficulty achieving consensus, potentially affecting group task performance (O’Reilly, Caldwell, & Barnett, 1989). We also controlled for the change in outside directors for each of the companies from 2002 to 2006, given that outside directors have been seen to be highly influential on board decision processes and, in particular, on the advice and counsel aspects of board task performance (Hillman & Dalziel, 2003). Finally, we controlled for CEO duality, as CEOs who are also chairmen may have added influence over board discussions (Boyd, 1995).

Results

Hypothesis Testing

Means, standard deviations, and bivariate correlations for individual-level (n = 117) and group-level (n = 60) study variables are reported in Table 1. Because multicollinearity can have an adverse effect on the standard errors of regression coefficients, tolerance values were computed for all variables. All tolerance values were well above the cutoff value of 0.01 (Dixon, 1992), and all variance inflation factors (VIFs) were less than the cutoff value of 10 (Pedhazur, 1997), indicating that multicollinearity was not problematic. We justified aggregation of individual-level responses to the group level using within and between analyses (WABA) and inspection of agreement indices (r_wg(j)). WABA has been recommended for investigating aggregation by Dansereau, Alutto, and Yammarino (1984), with the purpose of avoiding the “ecological fallacy” of aggregating measures to the group level when there may not even be within-group homogeneity for the measures (Pedhazur, 1997). Based on our WABA results, an inference toward a whole condition was warranted. Constructs of affective conflict, cognitive conflict, and cohesiveness all indicated a grouped nature with both E and F tests significant (p < .05). Board authority, perceived uncertainty, and board task performance passed the E test for larger between-cell Etas than within-cell Etas and provided at least partial support for aggregating individual responses to group-level constructs. To further examine the plausibility of aggregation, we also calculated mean and standard deviations of within-group agreement (r_wg(j)). Although there was some variability across groups, all mean r_wg(j) values were high (≥.85). Thus, mean values also justified aggregation to the group level (Klein & Kozlowski, 2000). Together, these results provide evidence that boards with multiple members exhibit agreement and that the firm level is an appropriate level of analysis.

Table 1.

Firm-Level Means, Standard Deviations, and Correlations Among Study Variables (n = 60).

Variable	M	SD	1	2	3	4	5	6	7	8	9	10	11
1. Board size	9.87	3.17
2. CEO duality^a	0.88	0.32	−.23
3. Change in outside directors	0.05	0.24	−.15	.27*
4. Change in ROA	−0.13	17.75	.07	−.30**	−.06
5. Change in ROE	4.41	23.99	−.16	.10	.16	.42**
6. Perceived uncertainty	3.78	0.58	.03	−.26**	.02	.03	.18
7. Board authority	3.25	0.63	.10	.35**	−.05	−.10	−.02	−.71**
8. Relative CEO power	−0.07	0.69	.36**	.22	.16	−.07	.03	.07	.13
9. Affective conflict	1.82	0.81	.05	.05	.06	−.23	−.06	−.09	.05	.14
10. Cognitive conflict	2.48	0.81	.13	−.06	.07	−.04	−.02	.14	−.03	.08	.56**
11. Cohesiveness	2.45	0.36	.01	−.12	−.13	.12	−.07	.03	−.06	.02	−.49**	−.33*	—
12. Board task performance	4.18	0.77	.01	.18	.10	.03	−.11	−.59**	.69**	−.02	−.11	−.09	.17

Note. ROA = return on assets; ROE = return on equity.

0 = absent, 1 = present.

p < .05. **p < .01.

After finding support for aggregation, stepwise regression analyses were performed to test main effects and interaction hypotheses on the 60 boards. In the first step of our analyses, control variables were entered, followed in the second step by entering the main effects, and then the interactions in the third step. Because Forbes and Milliken (1999) previously suggested that a curvilinear relationship may exist between cohesiveness and board task performance, and other curvilinear relationships are possible that may mask our main effects or interaction results, squared terms for the main effects were also entered in the third step of the regression. Ordinary least squares regression with robust standard error estimates was employed to account for possible sampling bias and non-normality due to our sample size (n = 60), and significance was evaluated using a p value of .10. All predictor variables were centered before creating interaction terms to reduce non-essential multicollinearity (Pedhazur, 1997), and significant interactions were plotted according to methods described by Aiken and West (1991).

As shown in Table 2, one board variable had a main effect on board task performance beyond the control variables. Specifically, supporting Hypothesis 2, board authority was positively related to board task performance (β = .69, p < .01). In addition, as shown in Step 3 from Table 2, curvilinear effects were found for both relative CEO power (β = −.22, p < .10) and affective conflict (β = .43, p < .05). As depicted in Figure 2, board task performance exhibited small decreases as CEO power relative to the board increases, but this effect accelerates when there are large discrepancies in relative CEO power. Figure 3 shows that board task performance rapidly decreases as affective conflict initially increases, but this effect plateaus under high levels of affective commitment. In general, these results provide support for Hypotheses 3 and 4, respectively. No support was found for Hypotheses 1, 5, or 6.

Table 2.

Stepwise Regression Results (n = 60).

Variables	Outcome = Board task performance
Variables	β	β	β	VIF
Step 1—Control variables
Board size	.04	−.03	.08	3.51
CEO duality^a	.18	−.09	.09	2.38
Change in outside directors	.08*	.22**	.23**	1.54
Change in ROA	.01	.02	.05	2.74
Change in ROE	−.14*	−.10^†	−.19**	2.04
Step 2—Main effects
Perceived uncertainty		−.12	−.02	3.58
Board authority		.69**	.63**	4.15
Relative CEO power		−.11	−.26*	4.54
Affective conflict		−.08	−.31	4.45
Cognitive conflict		.05	.06	2.46
Cohesiveness		.19	.19	2.19
Step 3—Non-linear effects
Perceived uncertainty × Perceived uncertainty			.07	5.84
Board authority × Board authority			−.11	5.36
Relative CEO power × Relative CEO power			−.22^†	4.60
Affective conflict × Affective conflict			.43*	5.09
Cognitive conflict × Cognitive conflict			−.11	2.06
Cohesiveness × Cohesiveness			.22	3.62
Perceived uncertainty × Cohesiveness			−.40*	5.35
Board authority × Cohesiveness			−.06	6.29
Relative CEO Power × Cohesiveness			−.02	2.63
Affective conflict × Cohesiveness			.41^†	7.42
Cognitive conflict × Cohesiveness			−.17	3.38
ΔR²	.06	.55	.11
Total R²	.06	.61	.72
Adjusted R²	.00	.52	.56

Note. Standardized estimates are reported. Regressions were conducted using robust standard errors that were computed accounting for any data non-normality. VIF displayed is from the last step in the regression analysis. VIF = variance inflation factor; ROA = return on assets; ROE = return on equity.

0 = absent, 1 = present.

†

p < .10. *p < .05. **p < .01.

Figure 2.

Graphical plot of the curvilinear effect of relative CEO power on board task performance.

Figure 3.

Graphical plot of the curvilinear effect of affective conflict on board task performance.

Hypothesis 7 predicted that cohesiveness would interact with other board processes to affect board task performance. As shown in Table 2, the results indicated that this interaction effect on board task performance was significant for the interaction between cohesiveness and perceived uncertainty (β = −.40, p < .05), as well as for cohesiveness and affective conflict (β = .41, p < .10), and the 11% of explained variance attributed to the non-linear effects (curvilinear relationships and interactions) was well above the typical range observed for other studies in the social sciences (Paquin, 1983).

Figures 4 and 5 illustrate the significant interaction effects. As shown in Figure 4, when perceived uncertainty was low, board task performance was higher under conditions of high cohesiveness, as expected. Interestingly, the relationship between perceived uncertainty and board task performance was positive in the presence of low cohesiveness. In other words, lacking cohesiveness did not worsen performance if perceived uncertainty was already high, suggesting that cohesiveness has little mitigating effect on perceived uncertainty. As predicted, cohesiveness served as a buffering mechanism and weakened the negative relationship between affective conflict and board task performance (see Figure 5). Altogether, these results provide partial support for Hypothesis 7.

Figure 4.

Graphical plot of the interaction effect between perceived uncertainty and cohesiveness on board task performance.

Figure 5.

Graphical plot of the interaction effect between affective conflict and cohesiveness on board task performance.

Additional Analyses

Two analyses were conducted to examine the possibility of common method bias. First, using all self-report items, a single-factor confirmatory factor analysis was performed as an initial diagnostic to determine whether common method variance is a major problem (Podsakoff, MacKenzie, Lee, & Podsakoff, 2003). The single-factor model showed poor fit with the data (χ²/df = 2841.60/819, goodness-of-fit index [GFI] = 0.38, comparative fit index [CFI] = 0.78, non-normed fit index [NNFI] = 0.77, standardized root mean square residual [SRMSR] = 0.15). These results provide initial evidence that common method bias is not a major concern. Second, common method variance was examined using the “single unmeasured latent method factor” confirmatory factor analysis (CFA) approach recommended by the decision tree on ways to deal with method bias provided by Podsakoff and colleagues (2003). Although the model including all latent measurement factors and a method factor fit the data better than the measurement model alone (Δχ²₍₄₂₎ = 321.05, p < .01), the average proportion of variance attributed to the measurement factors was substantially higher than the average proportion of variance attributed to the method factor (70% vs. 17%, respectively).

As the analyses involved several complex constructs, we also tested an alternative formation of our proposed relationships, with cohesiveness serving as a mediator between board cognitions and performance. Results showed no support for any type of mediation using stepwise regression within the framework of Baron and Kenny’s (1986) conditions for mediation.³ These analyses, while exploratory in nature, provide evidence that cohesiveness’ effect on board task performance is most likely to operate as a moderating mechanism in this context.

Discussion

This study began by highlighting that the public has heightened expectations of directors’ responsibilities in a post-SOX era (Goranova & Ryan, 2014; Ryan et al., 2010). The findings suggest that the additional pressures on boards can trigger group-level reactions, with negative implications for board task performance. While the original framework of Forbes and Milliken (1999) identified the crucial role of social cognitions in board decision-making, this was never empirically tested or highlighted in a context that brings the organizational challenges of board decision-making to the forefront, which is important to theory testing and development (George, 2014). In the context of the public’s heightened expectations of director and shareholder responsibility, this study provides evidence of some of the cognitive challenges occurring in the exchange of new information under a different governance landscape.

Board authority had a linear effect on board task performance, pointing to the ways that directors work as a group in exerting authority and the importance of this construct in light of shareholders’ new demands on directors. However, the curvilinear effects and their implications for board task performance are particularly interesting for both theory and practice. Relative CEO power and affective conflict showed curvilinear relationships with board task performance. Cohesiveness, an important element in-group decision-making, was seen to moderate the relationship between a board’s perceived uncertainty and affective conflict with board task performance. First, regarding the curvilinear relationship between relative CEO power and board task performance, suggestions to reform corporate boards are often directed at strengthening the power of the board relative to the CEO (Pearce & Zahra, 1991). This is particularly true in this era of shareholder empowerment where board independence has been institutionalized as corporate governance norm (Joseph et al., 2014). However, our results point to the fact that curbing the relative power of the CEO may be good for board task performance initially, but that the marginal benefits decline as the board’s power reaches parity with the CEO. On the surface, our findings seem to compete against previous findings showing the negative effect of CEO power on the board’s ability to effect strategic change (Golden & Zajac, 2001). However, too much board power has been associated with negative consequences for shareholders as well (Combs et al., 2007). In this respect, our curvilinear findings may reconcile competing logics with respect to CEO and board power from a socio-cognitive perspective. This may be a fruitful area for future research in examining the ideal power balance between the board and the CEO, particularly given continued shareholder calls for reduced CEO power and a supermajority of outside directors on U.S. corporate boards (Goranova & Ryan, 2014).

The results for affective conflict on board task performance are also illuminating. We made the theoretical argument that higher levels of affective conflict are to be expected with more shareholder pressures for board accountability and accompanying cognitive dissonance (Korsgaard et al., 2008). However, our findings suggest that this dysfunctional behavior levels out and a cohesive board can reduce the negative impact of affective conflict on board task performance. This finding reconciles with the literature suggesting that while affective conflict can be injurious to decision quality, it can be restrained through consensus (Amason, 1996). The study provides a more complete view into the importance of group social cognition for board members, as cohesiveness is seen to be an important element in the quality of the board’s decision-making and oversight. In this respect, our findings inform the socio-cognitive literature in executive decision-making (Bandura & Jourden, 1991), as well as confirm Forbes and Milliken’s (1999) original thesis that the benefits of personal exchange in cohesiveness may offset any possibilities of self-censorship or groupthink (p. 496).

Our findings also offer evidence that boards of directors are different from top management teams. While previous research on top management teams (TMTs) finds evidence that conflict among group members affects strategic decision-making (Amason, 1996), our findings did not point to a main effect between either cognitive or affective conflict of board members and board task performance. There are several reasons for this, beginning with our context, as well as our dependent variable. We have framed this manuscript around the pressures that board members experience because of new reforms since SOX, and top management team members may be insulated from them. Hence, the group conflict that has been noted as “inevitable in top management teams because ‘different positions see different environments’” (Mitroff, 1982, p. 375, as cited in Amason, 1996, p. 127) may not apply to board members who are aligned in their task of monitoring and advising management. Recent research has noted that boards’ allocation of attention to their tasks varies considerably by context (Tuggle, Sirmon, Reutzel, & Bierman, 2010), and requires both ability and motivation on the part of board members. Therefore, as noted by Forbes and Milliken (1999, p. 494), boards may differ considerably in the degree to which they experience cognitive conflict. Finally, our dependent variable of board task performance differs from other variables used in conflict research, like decision quality and affective acceptance (Amason, 1996) that (arguably) have affective components to them.

Directions for Future Research

While our findings address the consequences of board cognitions, it is possible that some constructs operate in a more complex fashion than just as simple main or interaction effects. For example, recent research on group conflict suggests that the level of dispersion, or variation, in members’ perceptions regarding conflict in the group can have important effects on creativity and group performance (Jehn, Rispens, & Thatcher, 2009). Of the variables in our study, affective and cognitive conflict may be best suited for consideration as dispersion-type processes where effects are dependent upon the composition of the board and members’ perceptions relative to other board members. Beyond this theoretical reasoning to support affective and cognitive conflict operating in dispersion terms, empirical evidence from our study also substantiates this possibility. Specifically, both types of conflict had the highest mean standard deviations on within-group agreement (r_wg(j)) of all variables investigated (0.27 and 0.25), suggesting variation among board members relative to the board’s mean level perceptions of affective and cognitive conflict.

Interestingly, the relationship between perceived uncertainty and board task performance was positive in the presence of low cohesiveness. This suggests that uncertainty might be beneficial for boards that are not cohesive, perhaps for newer boards, where relationships are not fully established and/or where network relationships are weaker. The stress from the “unknown” of new reforms may actually move boards to pay closer attention to their tasks if relational ties are not fully established. This topic, as well as some optimum level of conflict and cohesiveness, may be a fruitful area for future research to chip away at the complexities of group cohesiveness.

Boundary Conditions and Limitations

We have studied a part of the process in which the pressures that board members experience become internalized into board processes and affect board task performance. In doing so, we make two assumptions that (a) calls for more board vigilance are intended to improve the board’s ability to represent the interests of shareholders and (2) directors’ ability to monitor, discipline, and provide effective advice would, in fact, improve as well. Both of these assumptions, while rational, may have limitations. First, many of the reforms associated with the shareholder empowerment movement are the result of a political process. While, superficially, they may be pronounced as being enacted to better protect shareholder interests, political interests are also at work, particularly given that many of the reforms were put in place in response to governance scandals at the turn of the century. Thus, while we implicitly assume that shareholder and media calls for more board vigilance are intended to improve corporate governance, this assumption may be flawed.

Second, whatever the intention of mandates for better board vigilance, it is not clear that mechanisms associated with shareholder empowerment necessarily improve the governance of the firm (Buchholtz & Brown, 2015). Nevertheless, as many reforms have become legal requirements, the failure to comply would lead to sanctions on the firm and therefore to deteriorating board task performance. Thus, even if our assumption is flawed and such pressures do not lead to improved governance, a lack of movement toward the internalization of reforms would still lead to poor board task performance.

We also take some liberty with reference to the board of directors as a group in strategic decision-making. While methodologically we address this issue via the WABA, we acknowledge that directors may have individual reactions to this new era of accountability. In addition, the cross-sectional survey design limits the ability to apply these constructs in dynamic settings, and the survey questions were specific to a point of time following governance reforms. The guarantee of anonymity for our respondents negated our ability to gather the diversity characteristics of our sample. We acknowledge that these variables could also affect the cognitions of directors. However, this research is unique in gathering information about board behaviors that generally take place behind the closed doors of the boardroom.

Finally, our sample is small to test an advanced model, as reflected in the difference between R² and adjusted R² in the tables. Our sample also consists of a majority of boards with dual CEO/chairmen: In fact, 21 of our 60 firms have only the CEO reporting on board task performance. We acknowledge that CEO duality could affect the level of advice and monitoring by the board; however, we believe that it makes our results more conservative, given that a sample consisting of a higher proportion of independent chairs might be especially prone to experience the additional pressures of monitoring. Our aggregation results based upon WABA and r_wg(j) analyses suggest consistency among board members. Although we did not specifically test for differences in perceptions of chairs and non-chair directors, no substantial differences arose between multiple board members (i.e., when the chair and/or non-chair members both responded).

Conclusion

Our study addresses the question of how a new era of director responsibility might influence board task performance. Specifically, this study addresses the effect of such responsibility on the social cognitions of board decision-making that underlie board task performance. While the benefits of accountability and transparency in governance have been researched, the downside of the increasing pressures on board members has received relatively little attention. These pressures affect the social and psychological group dynamics for board members and ultimately lead to lower board and financial performance. Our findings suggest that increasing board authority may be accompanied by changes in power relative to the CEO and affective conflict among board members that will affect board task performance, moderated by the cohesiveness of the board. In sum, our model shows that the social cognitions of board decision-making must be analyzed in context; ultimately, these cognitive elements affect the ability of a board to function in the best interests of stakeholders to ensure value and accountability for society (Schwartz & Carroll, 2008).

Footnotes

Appendix

Acknowledgements

We would like to thank Associate Editor Lori Ryan and acknowledge helpful reviews from Cynthia Clark and three anonymous reviewers. In addition, we are grateful to Duane Windsor for his leadership, as well as members of the International Association for Business and Society (IABS) governance workshop who reviewed earlier versions of this work, including Melissa Baucus, Kathleen Rehbein, and Phil Cochran.

Author’s Note

All of the authors contributed equally; the names are listed alphabetically. Co-author Ann Buchholtz passed away in September 2015, and we dedicate this article to her. She was a gifted scholar, mentor, and friend, and she will be greatly missed by all who knew her.

Declaration of Conflicting Interests

The authors declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The authors disclosed receipt of the following financial support for the research, authorship, and/or publication of this article: The authors wish to acknowledge funding from the University of Georgia’s Terry College of Business through the Comer Research Award.

Notes

Author Biographies

Jill A. Brown (PhD, University of Georgia) is the Harold S. Geneen research professor of Corporate Governance at Bentley University. Her research interests include corporate governance, corporate social responsibility, and ethics. Her work has appeared in journals including Business Ethics Quarterly, Corporate Governance: An International Review, Journal of Management Studies, and Organization Science. She is co-author with Archie B. Carroll of Business and Society: Ethics and Stakeholder Management, 10th Edition.

Ann Buchholtz (PhD, Stern School of Business, New York University) was a professor of leadership and ethics and research director of the Institute for Ethical Leadership at Rutgers University. She died on September 14, 2015. She published extensively in many journals including Academy of Management Journal, Academy of Management Review, Business & Society, and Business Ethics Quarterly. She was co-author with Archie B. Carroll of Business and Society: Ethics and Stakeholder Management. She will be greatly missed by all those who knew her personally and those who utilized her insights to advance their own scholarly research.

Marcus M. Butts (PhD, University of Georgia) is an associate professor of management at the University of Texas at Arlington. His research interests include the work–nonwork interface, relational dynamics, and careers. His work has appeared in journals including Academy of Management Journal, Journal of Applied Psychology, Journal of Management, and Personnel Psychology.

Andrew J. Ward (PhD, The Wharton School, University of Pennsylvania) is the Charlot and Dennis E. Singleton ’66 Chair of Corporate Governance at Lehigh University. He conducts research on issues related to corporate governance including CEO successions, CEO compensation, reputation, and leadership. He has published in leading academic journals such as Administrative Science Quarterly and Organization Science as well as two books, The leadership Lifecycle: Matching Leaders to Evolving Organizations (Palgrave, 2003) and Firing Back: How Great Leaders Rebound After Career Disasters, co-authored with Dr. Jeffrey Sonnenfeld of Yale University (Harvard Business School Press, 2007).

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