ANTECEDENTS AND EFFECTS OF OUTSIDE DIRECTORS AWARENESS OF CEO DECISION STYLE

There have been increasing calls for greater outside directors to be m ore aware and informed about the firm 's decisions and decisionmaking process. If outsiders are more informed, it is presumed that they will work more closely with the CEO, and as a result, positively influence firm performance. This research examined individual outside directors ' awareness of one prominent aspect of the CEO's activity, namely the CEO's strategic decision style. We found that the outside director's a wareness of the CEO's decision style was positively related to financi al profitability and negatively related to financial risk after contro lling for industry, organizational size, profit orientation, board lea dership, and proportion of insiders. In addition, we found that the CE O's tenure was negatively related to outsider awareness, but this rela tionship was stronger in non-profit organizations and situations where the CEO did not chair the board. Implications of the findings for fut ure research and application are discussed.