A configurational perspective of boards' attention structures

Abstract

AbstractResearch Question/IssueWhat combinations of board attributes and contextual factors explain boards' selective distribution of attention between their dual role of resource provisioning and monitoring? At the board level, we consider board structure and breadth of knowledge, while the context in which boards operate is captured by the degree of external scrutiny, operational complexity, performance, and ownership structure.Research Findings/InsightsOur study demonstrates that there are multiple ways board attributes bundle and combine with important elements of the context to promote similar board attention structures. Our findings provide evidence of the causal complexity underlying this phenomenon and corroborate the notions of equifinality and asymmetric causality among board‐, firm‐, and institution‐level conditions conducive to boards allocating more attention to either their resource provisioning or monitoring roles.Theoretical/Academic ImplicationsOur findings support the attention‐based view (ABV), suggesting that boards' selective distribution of attention is regulated by the combination of skills and knowledge directors bring to the firm and the stimuli provided by contextual factors. In doing so, we underscore the need for an extended theory on board effectiveness, as resource dependence‐ and agency‐based prescriptions about boards' behavior may be incomplete, since there is limited consideration by these theories of the bounded rationality of directors and the complex relationships between the factors that can frame boards' selective distribution of attention.Practitioner/Policy ImplicationsOur study informs efforts to disentangle the conditions under which different attributes combine and regulate boards' distribution of attention, which has implications for nomination committees and powerful actors who have influence on board appointments. Because our results reveal several causal paths that can promote similar board attention structures, decision makers may wish to recruit directors with specific attributes that will be the best fit for the firm's contextual conditions.