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Allocating effort: risk and complexity in board directors’ engagement with information

Massie, Ruth (2015). Allocating effort: risk and complexity in board directors’ engagement with information. (Unpublished Doctoral thesis, City University London)


This research aims to understand how Board level Directors engage with information. The study has its roots in Sir Adrian Cadbury’s (1992:4.8) requirement that “directors receive timely, relevant information tailored to their needs”. This research aims to investigate the underlying assumption that Directors actually engage with the information provided.

The study uses grounded theory to look within the Board’s processes. The research uses the Board pack’s journey, from creation to the output from the Board, to provide clarity on the engagement processes undertaken by the organisation, the individual Director and the Board as a group. This is then contextualised through looking more widely at perceptions of the Board’s role and the corporate governance environment within which the Board sits.

The data collected for the research comprised interviews, observations and technical meetings. The interviewees included nine Board Chairs; eleven Non-Executive Directors; four Board level Executives; five information providers to Boards; one Board advisor and one industry/academic expert. This represented experiences from over 100 Boards including two top FTSE100 companies. Additionally, five Board meetings were attended to observe Directors in context and four technical meetings were undertaken to understand specific issues.

The resulting theory identified is that the level of engagement with the information by Directors is determined by ‘Allocating Effort’. This effort is a balance between the level of risk perceived; by, and to, the individual, the Board as a group and the organisation; balanced with the perceived complexity of the issue at each stage of the Board pack’s journey. This balance is constrained by the time available and the understanding of the role of the Board.

This theory was further developed by looking at the symbols that externalise the allocation of effort. They are identified as labelling the papers as: ‘For Note’, ‘For Report’ and ‘For Discussion’. Each of these paper types have a risk and complexity element, however, there was no paper type for high risk/complex. This research identified that ‘Ad Hoc Committees’ are used to fill the gap in the process of ‘Allocating Effort’. Furthermore, in relating the symbols back to the theory of ‘Allocating Effort’, it provides a tool for understanding the alignment, or misalignment, within the Board of their shared understanding of their role and risk appetites.

Publication Type: Thesis (Doctoral)
Subjects: H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
Departments: Bayes Business School > Management
Doctoral Theses
Bayes Business School > Bayes Business School Doctoral Theses
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