Decision making by phone vs

Decision making by phone vs instant messaging

Stephen Bainbridge, in his "Corporation Law and Economics" blog, posts on requirements in Delaware law that corporation boards of directors conduct meetings in which directors can actually hear each other. This implies that a conference meeting would have to be conducted with a phone conference line, even if the directors also had Internet communication capacity - email or instant messaging. Drawing on research into meeting dynamics, he argues that this is a good idea, here: "Applied Economic Analysis: Can a Board Meet Online?"

"...The requirement that members be able to “hear” one another seems quaint in an era of electronic mail, instant messaging, and internet chat capabilities. Yet, when Delaware recently amended its corporation statute to permit much greater use of electronic forms of communication, it retained the requirement that board meetings be conducted in such a way that all members may hear one another. As it turns out, this appears to have been the right choice. Research on decision making has found that groups linked by computer make fewer remarks and take longer to reach decisions than do groups meeting face to face. Kiesler and Sproul, for example, not only found that meetings conducted through computers result in greater delays, but also that the decisions made in such meetings were more likely to exhibit the risky shift phenomenon. Sara Kiesler and Lee Sproul, Group Decision Making and Communication Technology, 52 Org. Beh. & Human Decision Processes 96 (1992). They also found that time-constrained groups exchanged much less information when meeting electronically than when meeting face-to-face..."