Inside the Board : Decision Readiness, Meeting Dynamics, and Decision Outcomes

We investigated the interplay among four constructs related to meeting dynamics and their relationships with decision outcomes on boards of directors, which includes perceived overall board performance, creativity/innovativeness and ethicality of board decisions. We obtained responses from 358 board members using an original survey instrument distributed internationally, although most respondents in the final sample are based in South America. We employed recently developed analytical tools, including the pioneering application of confirmatory composite analysis in the survey-based board literature. Our results indicate that the four explanatory composite variables, named board-level decision readiness, debate and cognitive divergence, safety and trust climate, and information and opinion sharing are positively interrelated and are positively associated with the composite representing decision outcomes, even after controlling for myriad respondent-, organization-, and board-level characteristics, including board demographics, functioning and structure. We also found evidence of complementary mediating channels; in particular, our results are compatible with the conjecture that board-level decision readiness benefits decision outcomes directly and indirectly through its positive influence on the other constructs related to meeting dynamics. In contrast, we found no evidence of nonlinearity in the relationships between decision outcomes and the aforementioned constructs. Additional disaggregated analyses reveal that decision outcomes may be most enhanced in boardrooms in which members are well prepared, have adequate time to make decisions, feel comfortable disagreeing with others, and trust the executives. This research, which relies on the perceptions of board members themselves, complements previous studies mainly by focusing on decision readiness as a group-level phenomenon and providing evidence regarding its potential role in board dynamics and decision-making