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Board Involvement in the Strategic Decision Making Process: A Comprehensive Review

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  • Judge, William Q.
  • Talaulicar, Till

Abstract

The board of directors is legally responsible for setting the strategic direction of the firm and for ensuring the firm’s long-term performance in almost all governance environments. However, many boards delegate part or all of the task of creating and executing the firm’s strategy to a group of full-time professional managers. This separation between ownership and control creates many challenges for the modern-day firm, and the board’s role in the strategy formation process is arguably the seminal governance challenge confronting boards today. This study examines this seminal challenge by: (1) Introducing background information on this stream by defining key terms and discussing its importance to the wider corporate governance literature, describing three infamous case studies of firms based in the USA, Europe and Asia where the board was insufficiently involved, and noting situations where the board may become too involved; (2) Exploring previous reviews of this research stream on board strategic involvement, and discussing the evolution of this construct and related studies over time; (3) Analyzing previous research designs used in this research stream while identifying the frequency as well as costs and benefits associated with each; (4) Summarizing what we currently know about the multi-level antecedents of board involvement within single countries; (5) Specifying some of the national-level antecedents of board involvement identified in cross-national studies; (6) Identifying the subsequent multi-level effects of board involvement; and (7) Discussing the implications of this review and outlining future research directions.

Suggested Citation

  • Judge, William Q. & Talaulicar, Till, 2017. "Board Involvement in the Strategic Decision Making Process: A Comprehensive Review," Annals of Corporate Governance, now publishers, vol. 2(2), pages 51-169, April.
    • Handle: RePEc:now:jnlacg:109.00000005
    DOI: 10.1561/109.00000005
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    References listed on IDEAS

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    1. Wood, Geoffrey & Brewster, Chris, 2016. "Corporate Governance and Human Resource Management," Annals of Corporate Governance, now publishers, vol. 1(4), pages 249-319, November.
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    5. Michael N. Young & Mike W. Peng & David Ahlstrom & Garry D. Bruton & Yi Jiang, 2008. "Corporate Governance in Emerging Economies: A Review of the Principal–Principal Perspective," Journal of Management Studies, Wiley Blackwell, vol. 45(1), pages 196-220, January.
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    Cited by:

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    2. Ryan Federo & Yuliya Ponomareva & Ruth V. Aguilera & Angel Saz‐Carranza & Carlos Losada, 2020. "Bringing owners back on board: A review of the role of ownership type in board governance," Corporate Governance: An International Review, Wiley Blackwell, vol. 28(6), pages 348-371, November.
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    7. Nidal Zaqeeba & Takiah Mohd Iskandar, 2020. "Mediating Effect of Tax Management on the Relationship Between Board of Directors Characteristics and Firm Performance," Journal of Information & Knowledge Management (JIKM), World Scientific Publishing Co. Pte. Ltd., vol. 19(01), pages 1-17, March.
    8. Lukasz Derdowski & Torvald Øgaard & Einar Marnburg & Gro Ellen Mathisen, 2018. "Creative and innovative behaviours of corporate directors: an elusive role of task-related conflicts," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 22(4), pages 1045-1069, December.

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    More about this item

    Keywords

    Board of Directors; Strategy; Decision making;
    All these keywords.

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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