Building Resilience in a Crisis Through Boards – Exploring the Mediating Effect of Board Behavior

Abstract

The present study examines two board behaviors, their antecedents and their consequences in the COVID-19 crisis. The two behaviors are (1) board involvement in crisis management planning and (2) board creative effort in finding solutions. The antecedents are board expertise and cognitive diversity. The consequence is firm resilience. The study builds its theoretical argument using the classical and refined upper echelons theory, stating that the two board behaviors mediate the effect of board expertise and cognitive diversity on firm resilience. Survey data from the United States during early 2020 was used. We found strong support for our overall argument that board involvement in crisis management planning and board creative effort in finding solutions are critical mediators. Our study also shows that the context of a crisis matters. During COVID-19, board cognitive diversity can negatively affect board behavior. We conclude the paper with discussions and future research proposals.