The Relationship Between a Board and a Risky CEO

The best of decisions come into fruition not through effortless agreements but rather through deliberations and negotiations. This is precisely wherein the efficacy of an ambivalent board comes into play, in order to keep the acquisitions and decisions of a CEO monitored.

A research paper by UCLA Anderson’s Beatrice Michaeli and Charles University’s Martin Gregor explores crucial opportunities, especially when it comes to exponential investments wherein the efficacy of an ambivalent board comes into play. An unagreeable board will ensure proper decision-making only after conducting a well-rounded evaluation of a particular project or venture.

The efficacy of an ambivalent board also assumes particular importance in halting projects that might pose uncertainty of some kind taking into account the negative impact that a particular imprudent decision might inflict on the reputation of the board members. Therefore, while it is essential for the CEO and the board to function together in order to put forward the best interests of the organization, exercising caution, deliberation, and ensuring accountability, is equally important, likewise, to effectuate the most beneficial of decisions.