Governance Failure and Governance Under Failure: Reviewing the Role of Directors in Organizational Misconduct

Abstract

Research on organizational misconduct has mostly evolved independently from the literature on corporate governance. Yet, our survey of research on the role of directors in organizational misconduct contexts yielded more than 110 articles in the last 17 years across the management, accounting, marketing, operations, public relations, and finance literatures, showing that research on the role of corporate governance in organizational misconduct has increasingly become a distinct domain of inquiry. With its own scholarly audience, including scholars working in strategy, ethics, decision-making, and leadership, this research has employed diverse theories and investigated different antecedents, reactions, and outcomes. It has also focused on how directors both influence and are affected by organizational misconduct. Consequently, this literature is currently fragmented in several respects. Our aim in this review is to generate conceptual integration that brings coherence to this growing body of research and to facilitate future research in this important domain. The review offers a cohesive view of the effects of corporate governance on misconduct and of misconduct on corporate governance and provides frameworks for integrating the disparate macrolevel theories that currently characterize this work.