CEO Emotional Intelligence and Board of Directors Efficiency: A Bangladesh Perspective

Abstract

Purpose –This article deals with the relationship existing between the emotional aspect and decision-making processes. More specifically, it examines the links between emotional intelligence, decision biases and effectiveness of the governance mechanisms. The primary purposes of this article are to: consider emotional intelligence like new research ideas that make important contributions to society; offer suggestions for improving manuscripts submitted to Consortium for Research on Emotional Intelligence in Organizations; and discuss methods for enhancing the validity of inferences made from research.

Design/methodology/approach – The article explain that the main cause of organization’s problems is CEO emotional intelligence level.  I will use three models (linear regression and logistic binary regression ) to examine this relation: every model treats the relationship between emotional intelligence and one of efficiency criteria of the board. Emotional intelligence has been measured according to the scale of Schutte and al (Shutte Self Report Emotional Intelligence Scale, SSREI, Shuttle and al. 1998) with a high internal validity level. Regarding, The four cognitive biases they have been measured by means of a questionnaire comprising several items. As for the selected sample, it has been composed of some180 Bangladeshi  executives (belonging to 60 firms).

Findings – Our results have revealed that the presence of a high emotional intelligence rate is not always positively correlated with the executives’ suggestibility with respect to behavioural biases. They have also affirmed the existence of a complementarily relationship between emotional intelligence and the directors’ board. Authors need to consider that emotional witch permit to minimize CEO emotional biases and provide director’s board effectiveness.

Research limitations/implications – This article has implications for the development of   CEO emotional intelligence capacity. Besides, some psychological aspects of theoretical nature could not be wholly approached in a complete empirical way.

Practical implications – The article push organization to select managers based on their levels of intelligence emotional (apply tests of emotional intelligence in place psychometric tests). Also, it increase the validity of inferences made from research in the field.

Social implications– This article incite governments to establish a training programs witch aimed the 
development of learning of emotional intelligence. Thus, it has important implications for enhancing the well being of individuals, organizations, and society as a whole.

Originality/value – Actually, for the sake improving the explanatory power of legal-financial approach of governance, the behavioural dimension has been integrated for a more thorough analysis of the directors’ board role. Our goal consists in highlighting the role played by emotional intelligence as a skill or tool available for the manager or controller to minimize the behavioural biases (bias of loss aversion, optimism, over-confidence and lack of cognitive flexibility), and achieves an effective control.

Keywords: emotional intelligence; cognitive bias; corporate governance; board of directors.