Exploring the risk evaluations of corporate boards: An international comparative perspective

Corporate boards provide critical guidance on the main risks companies face. Like the company itself, however, corporate directors are influenced by various factors that shape their perceptions and behaviors, potentially moving their focus from the most pertinent risks towards generally accepted risks in a given context and, in turn, distorting their risk guidance. In this study, we explore how a set of board-level, company-level, and country-level institutional factors influence risk evaluations of corporate board directors in the semiconductor industry. We find risk-type-specific configurations of factors to shape how risk is perceived. Crucially, we find that risk evaluations align with geographic and cultural boundaries, with country-level institutional factors playing a dominant role in terms of shaping risk evaluations. Our findings highlight this country-level convergence of risk evaluations as a hitherto undetected risk. We find internationalization of board composition to be a means to improve risk identification and, ultimately, the effectiveness of corporate risk governance.