The Role of Transactive Memory Systems of Board Groups Engaged in CEO Succession Planning

Abstract

The purpose of this qualitative, basic interpretive study (Merriam, 2009) was to improve understanding of the role of transactive memory systems (TMS) in board groups as a way of leveraging their knowledge in the context of the chief executive officer (CEO) succession planning process. Sixteen participants were recruited who had served on a board of a $500 million-plus public company and had been involved in a CEO succession planning process within 5 years of the study. Within the participant group, a subset of six had all worked together, over the same time period, on the same CEO succession planning process from beginning to end. Data were collected through semi-structured interviews and participant follow-up.

The study findings confirmed a relationship between structures and processes of TMS and CEO succession planning in the context of board groups. The data supported the presence of some but not all of the characteristics of TMS presented in Ren and Argote's (2011) metaanalysis and categorization of antecedents, components, and consequences of TMS. Specifically, TMS antecedents present in board groups included team-level inputs of task interdependence, goal interdependence, team familiarity, shared experiences, and communication. Specific dimensions of TMS components present within board groups included team knowledge stock and knowledge of who knows what. Three TMS behavioral indicators were present: knowledge specialization, task credibility, and task coordination to support knowledge sharing and updating. Finally, key dimensions of TMS consequences included team performance behaviors of team learning, creativity, and reflexivity.

Five conclusions were drawn from the study. (1) The TMS dimension of reliance on others' specialization serves to meet the challenges of bounded rationality in board groups. (2) High familiarity can enhance trust, but if overemphasized negatively affects the reliability of specialized expertise. (3) Personal respect and trust in the expertise of others affects receptivity to defer to others' specialized expertise. (4) A director's publicly known resume is the primary determinant of specialization. (5) Board structures (the knowledge stock of the group) and processes (transactive processes of encoding, storing, and accessing knowledge) facilitate the continual refinement of member-expertise associations and conscious development of knowledge sharing.