How Boardroom Displays of Emotions Shape Strategic Decisions

Part of the Lubar Research Seminar Series

Speaker: Christy Shropshire, Associate Professor of Management – Arizona State University

To examine board members’ influence in strategic decision making, we consider the role of emotions in interpersonal boardroom exchanges between directors and top managers. We build a grounded model of how board members shape strategic decisions, which can occur as focused influence from a board member to top manager directly or as diffuse influence from a board member to the overall board. Drawing from the literature on non-verbal communication, we theorize that displays of anger and of happiness by board members increase their focused or diffuse influence, respectively, over strategic decisions proposed by top management. We further hypothesize that the duration of the discussion moderates these main effects. Analyses on 366 agenda items from 68 board meetings of four Dutch water management organizations support our predictions. These findings offer insights and new avenues for research in corporate governance, emotions, and communications and have implications for our scholarly and practical understanding of how boards influence strategic decisions.