The nature and influence of information quality and information asymmetry on decision-making by UK corporate boards of directors

This thesis is about decision-making by a corporation’s board of directors - the core function of corporate governance. Under UK corporate governance control frameworks, corporate boards accept collective responsibility for the quality of decision-making processes and the consequences. This thesis develops a conceptual framework that provides a nuanced definition and typology of the functions of corporate governance, and an inter-related typology of the information used in corporate governance decision-making. Using this conceptual framework and typology, this thesis explores the use of information in its role as the key resource for corporate board decision-making. Through quantitative and qualitative research, it is demonstrated that the purpose and quality of a director’s information, and its use in decision-making and consequential risk-taking, is individual and variable to each director, despite the assumption of collective endeavours inherent in contemporary control frameworks. This thesis also demonstrates that, in general, non-executive directors accept and utilise lower quality information than the information accepted and utilised by executive directors. Therefore non-executive directors make lower quality, riskier decisions which are not sufficiently mitigated by the corporation. Based on the research undertaken, this thesis introduces a new theory of how corporate executive director agency works in practice