Title

Barking Up The Wrong Tree? An Accountability Theory Perspective On The Effects Of Board Decision Monitoring On Ceo Experiential Learning

Abstract

In this paper, we develop an accountability theory perspective (Tetlock, 1985; 1992; Lerner & Tetlock, 1999) on CEO-board relations that identifies, and provides noteworthy insights into, previously unexplored issues related to board effectiveness. Our conceptual frame focuses not on how boards might prevent managers from "behaving badly", but rather on how they might impact a potentially equally significant managerial shortcoming, CEOs' failure to learn as much as they might from prior strategic decisions. Beyond sensitizing us to a likely link between boards and executive learning that is not contemplated by prevailing theory, an accountability theory perspective suggests a focus on a critical subset of director behaviors that we label "board decision monitoring", and define as the intensity and vigor with which directors demand explanations and justifications for CEOs' strategic decisions. Our theory argues that, generally speaking, board decision monitoring will enhance executives' capacities for learning from similar decisions made in the past. However, our theory departs from convention by specifying a range of conditions that are likely to reduce the benefits of intense monitoring. We further consider how, at the highest level of these contingency factors, intense monitoring might ultimately interfere with learning. Thus, our theory suggests at least the potential for a largely unexplored "dark side" to intense monitoring of firm CEOs by boards of directors.

Publication Date

1-1-2006

Publication Title

Academy of Management 2006 Annual Meeting: Knowledge, Action and the Public Concern, AOM 2006

Number of Pages

-

Document Type

Article; Proceedings Paper

Personal Identifier

scopus

DOI Link

https://doi.org/10.5465/ambpp.2006.22896813

Socpus ID

85088340424 (Scopus)

Source API URL

https://api.elsevier.com/content/abstract/scopus_id/85088340424

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