How boards manage the tension between cognitive conflict and cohesiveness: Illuminating the four board conflict climates

• Published date: 01 January 2024
• Author: Marilieke Engbers,Svetlana N. Khapova
• Date: 01 January 2024
• DOI: http://doi.org/10.1111/corg.12516

ORIGINAL ARTICLE

How boards manage the tension between cognitive conflict

and cohesiveness: Illuminating the four board conflict climates

Marilieke Engbers | Svetlana N. Khapova

School of Business and Economics, Vrije

Universiteit Amsterdam, Amsterdam, The

Netherlands

Correspondence

Marilieke Engbers, School of Business and

Economics, Vrije Universiteit Amsterdam, De

Boelelaan 1105, 1081 HV Amsterdam, The

Netherlands.

Email: m.j.e.engbers@vu.nl

Abstract

Research Question/Issue: Although both cognitive conflict and cohesiveness are

quintessential for a supervisory board to fulfill its monitoring and advisory role, cogni-

tive conflict may equally create tension that negatively affects board cohesiveness

and performance. How boards manage this tension between conflict and cohesive-

ness is the key concern of this paper.

Research Findings/Insights: Analysis of the multicase data from 17 Dutch two-tier

supervisory boards reveals that how boards manage the tension between conflict

and cohesiveness depends on three attributes: (a) board cohesiveness, (b) the board's

conflict norms formation and (c) the board's dominant conflict management style.

These attributes shape volatile board conflict climates. Four conflict climates are

identified: (a) compliance climate, (b) pseudocohesive climate, (c) conflict climate, and

(d) agree-to-disagree climate.

Theoretical/Academic Implications: Our study makes three contributions. First, it

suggests that boards avoid conflict but are nonetheless often not cohesive. Second,

it reveals that boards have conflict management styles that include action patterns

distinct from those reported in the extant literature since these patterns emerged

from exploring what board members think and feel but do not openly say. Third, we

develop new insights into how boards implicitly and continuously form conflict norms

and propose that boards require explicit, conscious, and shared conflict norms to

enact productive conflict management action patterns.

Practitioner/Policy Implications: A conceptual model is proposed that facilitates

reflection of board decision-making and effectiveness and that maps out actions the

boards can take to address the tension between cognitive conflict and cohesiveness.

KEYWORDS

corporate governance, supervisory boards, decision-making, conflict management, climates

1|INTRODUCTION

Supervisory boards are critical to organizational success. They are

considered the “apex of the firm's decision control system”(Fama &

Jensen, 1983, p. 311) and are the formal connection between the

shareholders and the executives entrusted with the day-to-day func-

tioning of the organization (Forbes & Milliken, 1999). Considering

boards' strategic importance, it is imperative to know how boards

Received: 22 January 2021 Revised: 31 December 2022 Accepted: 2 January 2023

DOI: 10.1111/corg.12516

This is an open access article under the terms of the Creative Commons Attribution-NonCommercial License, which permits use, distribution and reproduction in any

medium, provided the original work is properly cited and is not used for commercial purposes.

© 2023 The Authors. Corporate Governance: An International Review published by John Wiley & Sons Ltd.

Corp Govern Int Rev. 2024;32:63–88. wileyonlinelibrary.com/journal/corg 63

make decisions. However, boards are hard to penetrate (Leblanc &

Schwartz, 2007). Consequently, there is an increasing call in the litera-

ture for opening up this black box of board decision-making (Bailey &

Peck, 2011; Boivie et al., 2016; Finkelstein & Mooney, 2003;

Leblanc & Schwartz, 2007; Veltrop et al., 2020; Westphal &

Bednar, 2005).

Moreover, few scholars have addressed the fundamental question

of how boards meet the two critical criteria that simultaneously shape

board performance, that is, cohesiveness and cognitive conflict

(Forbes & Milliken, 1999). Cognitive conflict involves “disagreements

about the content of the tasks being performed, including differences

in viewpoints, ideas, and opinions”(Forbes & Milliken, 1999, p. 258),

while the ability to continue working together is evidenced by cohe-

sion. Although both criteria are quintessential for a supervisory board

to fulfill its monitoring and advisory role, cognitive conflict may create

tension that negatively affects board cohesiveness and thus perfor-

mance (Forbes & Milliken, 1999).

Only a small number of studies have addressed and confirmed

that boards face this convoluted tension between cohesiveness and

cognitive conflict. These studies (a) reveal that board members down-

play conflict because of its negative connotation (Kerwin et al., 2011);

(b) report “the nonresolution of paradoxes”and “the dominance of

conformance”(Carroll et al., 2017, p. 606); (c) show a tendency

toward nonexecutives silencing their concerns (Westphal &

Bednar, 2005) or nonexecutives and executives responding poorly to

these concerns (Westphal & Khanna, 2003; Westphal & Zajac, 2013;

Zhu, 2013); and (d) suggest the importance of psychological safety

(Veltrop et al., 2020) and a supportive culture to promote cognitive

conflict (Boivie et al., 2021). Despite this body of literature, little effort

has been made to explore the tension between cognitive conflict and

cohesiveness directly and systemically.

Therefore, in this paper, we inductively explore the question:

How do boards manage the tension between cognitive conflict and

cohesiveness? Specifically, we collected rare, rich, and thick data from

17 Dutch two-tier boards, observed and tape-recorded 19 meetings

and conducted 119 interviews with the board members about these

meetings. We focused on recording answers to two questions: “What

were you thinking and feeling during the board meeting?”and “What

kept you from voicing what you were thinking and feeling?”Then, we

analyzed and compared what was said during the board meeting with

board members' reconstruction of the board meeting, including their

unspoken thoughts and feelings and narratives.

Three key factors emerged from our data as important to board

performance. First, we identified “board cohesiveness,”shaped by the

perceived temperature and levels of unsaid. Specifically, we found

that the higher the levels of unsaid the higher the process conflict and

the higher the levels of affective conflict. Second, we identified “the

board's conflict norms formation”and found that boards continuously

and implicitly develop conflict norms depending on the perceived

power difference of the perceived antagonists and protagonists of the

conflict. Third, we identified the “board's dominant conflict manage-

ment style,”which is shaped by the dominant action patterns that

prompt boards either to promote or to avoid cognitive conflict.

From these three categories, we identified four distinct board cli-

mates that explain how boards manage the tension between cognitive

conflict and cohesiveness. These board climates result from and are

continuously shaped by an interplay of the board's conflict norms for-

mation and the board's dominant conflict management style, which

continuously emerge from board cohesiveness. We labelled these cli-

mates “compliance climate,”“pseudocohesive climate,”“open conflict

climate,”and “agree to disagree climate.”

This paper makes three distinct theoretical contributions. First,

contrary to Forbes and Milliken's (1999) suggestion that effective

boards should promote cognitive conflict, our data reveal that 16 out

of 17 boards avoid cognitive conflict as they implicitly assume that

sharing their perceptions and opinions would automatically elicit pro-

cess (Bailey & Peck, 2011) and affective conflict (Mooney et al., 2007)

and assume it will reduce board cohesiveness. Our data, however, also

show that even though board members apply conflict avoidance strat-

egies to maintain cohesiveness, boards are not cohesive, even when

individual board members perceive the board to be cohesive. Second,

this study offers new insights concerning how boards can indeed

manage the tension between cognitive conflict and cohesiveness and

suggests that “board reflexivity”(Pieterse et al., 2011) and explicit,

shared conflict norms (Perlow & Repenning, 2009) will help increase

task commitment and mitigate the negative effects of cognitive con-

flict on affective conflict and cohesiveness (DeChurch et al., 2013).

These findings corroborate and emphasize the relevance and risk of

naive realist bias (Pronin et al., 2004), false attribution (Ross, 2018),

false consensus bias (Ross et al., 1977) and defensive routines

(Argyris, 1992) on decision-making. Third, our study suggests that

boards have distinct CMSs. We identified seven action patterns that

do not correspond with the extant conflict management literature. As

we were able to observe what was said as well as what was not said

but felt, we identified conflict management action patterns that can-

not easily be detected through surveys.

Because this research attempts to build theory inductively using

qualitative data, we begin with a brief overview of prior research that

laid the groundwork for our analysis, and then we describe our study

and present the findings. In Section 4, we explore the theoretical con-

tributions of our findings and their implications for helping advance

research on board dynamics and decision-making toward understand-

ing board effectiveness.

2|THEORETICAL BACKGROUND

2.1 |Board work and conflicts

Forbes and Milliken(1999) propose that the most effective boards are

capable of reconciling the paradoxical tension between cognitive con-

flict and cohesiveness. Board members, however, encounter many bar-

riers and dilemmas that are detrimental to decision-making (Boivie

et al., 2016; Carroll et al., 2017). Supervisory boards are large

and diverse groups that meet only occasionally, are highly

interdependent due to an inverted pyramid power structure (Garg &

64 ENGBERS AND KHAPOVA