Leading the Board in a Crisis: Strategy and Performance Implications of Board Chair Directive Leadership Academic Article uri icon

abstract

  • The COVID-19 pandemic has disrupted nearly every boardroom in the world. However, neither the extant leadership literature nor the corporate governance literature offers succinct guidance on what constitutes effective board leadership during such a calamity. To address this theoretical and practical need, we develop a moderated mediation model, in which directive leadership from the board chair promotes competitive simplification at the onset of the crisis, which in turn promotes firm financial performance during the crisis. Using survey responses from 120 directors of U.S. public firms in Spring of 2020, combined with firm-level archival data from multiple sources and time periods, we find support for this mediated relationshipbut only if the chair is not CEO. If the chair is CEO, we find no evidence of a positive relationship between directive leadership and either competitive simplification or firm financial performance; rather, we find some evidence of a negative relationship. We explore the implications of these findings for the theory and practice of corporate governance and crisis management.

published proceedings

  • JOURNAL OF MANAGEMENT

altmetric score

  • 14

author list (cited authors)

  • Krause, R., Withers, M. C., & Waller, M. J.

citation count

  • 1

publication date

  • February 2022