Despite the consensus that climate change will have huge consequences not just for the planet but also on corporate operations, businesses continue to fail to adjust their strategic decision-making processes to become more sustainable. One of the silent culprits behind climate change inertia lies in the cognitive biases at play in corporate decision making. This article builds on existing strategic decision-making models to explain how biases prevent managers from accurately identifying the moral dimensions of climate change. It also presents a broad range of practical interventions for how this constraint can be overcome.
Strategic leadership and corporate governance scholars have long been interested in how boards of directors make decisions pertaining to important strategic issues that can have a material impact on their organizations. To date, however, research on board decision-making, especially as it relates to issues of corporate social responsibility (CSR), environmental management, or sustainability, has concentrated almost exclusively on structural, demographic, or ownership factors of boards and their impact on various aspects of corporate social or environmental performance. Even still, many reputable corporations with exemplary corporate governance structures continue to make questionable strategic decisions with regards to environmental sustainability. As such, this research seeks to look into the “black box” of corporate governance to understand exactly how boards of directors are dealing (or not) with issues related to environmental sustainability. To do so, we conducted a series of qualitative interviews with directors and were surprised to find that social and environmental sustainability was simply not debated in the boardroom. Using an attention-based view of the firms (ABV), we present a process-based model that explains this phenomenon and introduce the new construct of attentional voids so as to contribute to our understanding of governing for social and environmental sustainability.
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