Corporate Boards: New Thinking

In the face of global challenges, corporate boards may need to think differently. In this review, I explore how the finance literature addresses the challenges boards face. I focus on a key recent challenge: how boards navigate shifting expectations about their objectives beyond shareholder value. I highlight that the literatures on boards’ stakeholder objectives and diversity overlap. This raises interesting, and important, questions about how boards can develop “new thinking” more generally. Much research remains to be done in this area. To rise to the challenge, however, finance academia may also need to think differently. Using data that measure how individual directors think, I illustrate that many factors may influence how directors think, including selection. Recognizing path dependencies in approaches and assumptions may help the field of finance continue to generate influential research on boards.