Risk perceptions of corporate directors: Isomorphic influences and ethical implications

Publisher:
Edward Elgar Publishing
Publication Type:
Chapter
Citation:
Research Handbook on Corporate Governance and Ethics, 2023, pp. 224-242
Issue Date:
2023-07-18
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Corporate boards provide critical guidance on the risks companies are exposed to. Like the company itself, corporate directors are embedded in networks of formal and informal institutions that shape their perceptions and behaviors. Isomorphic pressures arising from these institutions may distort risk perceptions of corporate boards and shift their focus from the most pertinent risks to more generally accepted risks. Using a National Business Systems (NBS) lens, this study explores risk perceptions of public boards in the IT industry. Semistructured interviews are used to explore the risk perceptions of corporate directors from three world regions. We identify where risk perceptions converge and diverge, and trace differences back to the respondents' institutional environments. Building on our analysis, we develop a set of propositions that capture the most pertinent findings and could guide future research, and present implications for corporate practitioners.
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