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.