SusTec article accepted for publication at Academy of Management Journal (AMJ)
A new article by SusTec researchers Joern Hoppmann, Florian Naegele, and Bastien Girod, which studies the role of boards of directors for organizational inertia in times of environmental discontinuities, was recently accepted for publication in the Academy of Management Journal (AMJ).
In the article, entitled "Boards as a Source of Inertia: Examining the Internal Challenges and Dynamics of Boards of Directors in Times of Environmental Discontinuities", the authors use a comparative case study of 10 major Swiss electric utility companies during the energy transition to show in detail how environmental and strategic change impair boards’ ability to judge strategic issues, and how boards use self-evaluation and self-reconfiguration to renew this ability. Moreover, the authors offer original insights into the board-internal antecedents of board renewal, and show that environmental discontinuities pose a dilemma for boards, since self-evaluation and self-reconfiguration are critical for preventing organizational inertia yet may run counter to board members’ self-interest.
By showing that board members, like managers, experience conflicts of interest that can harm firm performance, the study contributes to agency theory and an emerging micro-perspective on boards. By highlighting boards as a source of organizational inertia, the study challenges existing findings in the field of strategic management and makes several more specific contributions to important debates in the corporate governance literature. In addition, the study bears important implications for practitioners as it helps firms improve their corporate governance in times of change.
The full-length article can be downloaded Downloadhere