Enhancing board of director decision‐making: The impact of government support on risk management and nonfinancial performance

Abstract

The substantial influence of the board of directors on company performance is a key area of focus in global business management. This study examines the moderating effect of government support on the board of director's role in the relationship between perceived risks and the nonfinancial performance of firms. A survey was conducted among 480 Colombian exporting companies from August to December 2023 to achieve this aim. The data were analyzed using a structural equation model. One significant gap in the literature is the need to identify specific actions and behaviors of companies across various economic sectors, such as exporting Small and Medium Enterprises, to develop strategies for managing risks associated with nonfinancial performance. Additionally, examining the moderating role of government support in achieving business sustainability standards is critical. The findings reveal that human risk (psychological and social) does not significantly affect nonfinancial performance when government support directly influences board decision‐making. However, operational risk impacts nonfinancial performance when board directors possess extensive environmental information and leverage government support to implement necessary actions. This understanding enables firms to navigate their operational context more effectively and seize available opportunities.