Unpacking the Board: A Comparative and Empirical Perspective on Groups in Corporate Decision-Making (Draft Version)
40 Pages Posted: 8 Oct 2013 Last revised: 12 Nov 2015
Date Written: September 26, 2013
Collegial decision-making is relevant for a host of legal questions and in particular for corporate law. What do we know about its empirical effects? Less than we could. As of yet, pertinent review articles usually (1) assume rather than analyse inhowfar the law actually mandates collegial decision-making, (2) rely mostly on “classical” studies or those from behavioral economics, while underrating a century's worth of previous empirical research, and (3) review the evidence anecdotally with little regard for the robustness of findings. As a consequence, scholars from corporate law and economics even today rely on theories and evidence which were disproved already years ago. The present paper is a remedy. It combines a thorough comparative analysis of corporate statutes with a comprehensive research of empirical evidence, resulting in an assessment of the robust empirical effects of collegial decision-making. Finding — as this paper does — that groups tend to deteriorate decision quality and exacerbate bias relative to their best decision-maker, corporate law is called upon to design institutional remedies. Knowing more about these empirical effects will help scholars to identify and eliminate faulty arguments and improve policy and the legal discourse as a whole.
Keywords: decision making, board, group, team, collegial, evidence-based, empirical, review
JEL Classification: A12, C92, D23, D71, K22
Suggested Citation: Suggested Citation