Scholars have long been interested in when and to what degree managers are able to exert control over their organizations. In this review, we examine managerial discretion, or the latitude of action available to managers. Since its introduction, scholars have attempted to explain when managers will have discretion, what discretion means for organizational outcomes, and how discretion may differentially influence organizational outcomes when it enables or constrains leaders. Our review indicates that while a significant number of studies have examined discretion, few have attempted to validate the prescriptions of the managerial discretion construct. Furthermore, studies to date have primarily focused on the industry task environment as a measure of discretion, with less attention focused on the manager's characteristics and the internal organization. We then assess construct validity and the measurement of managerial discretion, offering recommendations to future researchers for improving the operationalization of this construct. Finally, we consider how discretion forces may interact as either complements or substitutes and how such interactions may have both organizational-and individual-level consequences.

The importance of board committees – specialized subgroups that exist to perform many of the board's most critical functions, such as setting executive compensation, identifying potential board members, and overseeing financial reporting – has grown over time due to increased legal requirements and greater complexity of the environment in which firms operate. This has resulted in a large body of work examining board committees across the accounting, finance, and management disciplines. However, this research has developed rather independently within each discipline, preventing scholars and practitioners from developing a comprehensive understanding of board committees. To address this issue, we conduct a comprehensive review of the literature that: 1) summarizes and synthesizes antecedents and outcomes associated with board committees in publicly‐traded firms in English common law countries; and 2) offers a critical analysis of existing research, providing recommendations for advancements and new directions in board committee research.

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This study integrates research on managerial discretion within the behavioral theory of the firm to examine how four CEO psychological traits serving as antecedents of managerial discretion-ambiguity tolerance, cognitive complexity, locus of control, and commitment to the status quo-moderate firm responses to poor performance. Using CEOs' responses to questionnaires, CEO ambiguity tolerance is found to positively moderate the relationship between negative attainment discrepancy and strategic change when performance is slightly below aspirations, defined as average market return for the firm's industry. Further, CEOs with greater cognitive complexity are found to engage in more strategic change when performance is farther below aspirations. Thus, this study begins to unpack the role of CEOs' cognitive makeup on firm responses to performance shortfalls.

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