How Does CEO Cognitive Style and Board Characteristics Impact Strategic Risk‐Taking?

ABSTRACT Research Question/Issue This study portrays the different cognitive styles of CEOs to reveal their mechanisms of influence on corporate strategic risk‐taking, and further explores the moderating roles of board cognitive diversity and board expertise, so as to better understand the executive psychological processes of corporate strategic decision‐making and risk management. Research Findings/Insights The research indicates a negative effect of CEO analytic cognitive style on corporate strategic risk‐taking, and a positive effect of intuitive cognitive style. These relationships are moderated by board structure characteristics. Specifically, as board cognitive diversity increases, the negative effect of CEO analytic cognitive style on corporate strategic risk‐taking decreases, while the positive effect of intuitive cognitive style increases. Additionally, we find that board expertise strengthens the negative effect of analytic cognitive style on strategic risk‐taking and weakens the positive effect of intuitive cognitive style on strategic risk‐taking. Theoretical/Academic Implications We analyze the impact of CEO cognitive style on corporate strategic risk‐taking, extending the understanding of how executives' cognitive psychological traits influence corporate strategic decision‐making and enriching the literature on upper echelons theory, and providing new insights for research on corporate risk management. By integrating UET and RDT, we explore the moderating roles of board cognitive diversity and board expertise in the relationship between CEO cognitive style and corporate strategic risk‐taking, revealing the interactive mechanism between board structure and CEO cognitive trait. Practitioner/Policy Implications This study highlights the importance of executive cognitive style and board characteristics in corporate strategic decision‐making, and provides practical guidance for firms to optimize top management and decision‐making mechanisms to achieve optimal strategic decisions in complex and dynamic business environments.