Director Overlap: Groupthink versus Teamwork

Corporate boards are charged with the critical tasks of assessing top management performance and making compensation and dismissal decisions.  Moreover, boards serve as a valuable source of advice and counsel to top management.  While board members tend to be highly talented individuals, they make decisions collectively as a group.  The quality of board decisions is, therefore, likely to be materially influenced by group dynamics.  While the topic of group dynamics has been extensively studied by social psychologists, the finance literature contains little evidence on its impact on firm value.  In a recent article titled “Director Overlap: Groupthink versus TeamworkRead more