Decision-Making during a Crisis

The COVID-19 crisis was a time of great uncertainty and inordinate stress. For the boards of public companies in the UK, a series of continuously emerging challenges required rapid decision-making on the basis of incomplete information. The early stages of the crisis provide an ideal setting in which to examine boardroom decision-making because such a high stress environment can bring to light the mechanisms and motivations that underlie this process, which we can use to discover features of decision-making that might not otherwise be apparent. This paper uses the regnant view in corporate governance scholarship - that directors will follow the shareholder value maximisation norm - to predict how we would expect companies to respond to the crisis. It then draws on a unique set of qualitative data that was gathered from interviews with directors in FTSE 350 companies and other actors in the corporate governance system during the early stages of the crisis (March-June 2020) to examine decision-making in UK company boardrooms. We will discuss the findings and pose three non-exclusive interpretations, as well as a fourth which is common to all interviews involving elite participants, and consider the implications of these for our understanding of boardroom decision-making.