Why do intelligent and experienced boards make poor decisons? The Irish Banking Crisis Case Study.
Abrahams, Gary Roy
Thesis or dissertation
University of Exeter
Reason for embargo
Recommendation by my external supervisors given the sensitive nature of the comments made by the interviewees.
ABSTRACT My thesis focuses on three related research themes. First, to provide academic rigour to the assertions of the Nyberg Report (2011) that the Irish banks were characterised by both groupthink and herding in the lead up to the recent financial crisis. The Nyberg Report was commissioned by the Irish government to provide explanations for the causes of the Irish financial crisis. In particular my thesis explores whether the board of Anglo Irish Bank (Anglo) was characterised by groupthink tendencies and whether the other Irish banks looked to emulate Anglo’s strategy. Second, my thesis will develop a theoretical model which identifies characteristics associated with the increased vulnerability of a board to a poor decision process . In particular the model will focus on the interplay between normative and informative influences on decision process and how these can and do interact with director skill levels. Five research questions are developed and my theoretical model of VPDP is applied to the Irish bank case study. Information will be gathered through a process of semi-structured interviews and an analysis of existing literature, official reports and annual financial statements. Third, a series of recommendations are made which are derived from the model itself and are intended to reduce the likelihood of boards pursuing a poor decision strategy and in increasing the likelihood of a robust boardroom challenge.
PhD in Accountancy