Impact of Director Networks on Strategic Decision-Making: The Mediating Role of Information Flow

Mohd Faizal Jamaludin, Marziana Madah Marzuki, Wan Zurina Nik Abdul Majid, Mohd Fahmee Bahaudin and Nor Balkish Zakaria

Information Management and Business Review, 2025, vol. 17, issue 4, 112-124

Abstract: Strategic decision-making at the board level is increasingly shaped by directors’ interorganisational networks. However, the mechanisms by which these structural positions translate into strategic influence remain underexplored. While existing scholarship acknowledges the value of director network centrality in enhancing resource access and legitimacy, the mediating role of information flow in converting this structural advantage into high-quality strategic decisions has received limited conceptual attention. Addressing this gap, the present study aims to develop a theoretical framework that explains how director network centrality influences strategic decision-making through board-level information flow. Using a narrative review methodology, this study synthesises 26 peer-reviewed articles sourced from the Scopus database. An integrative thematic analysis reveals three critical propositions: (1) director network centrality positively influences information flow; (2) information flow enhances strategic decision-making quality; and (3) information flow mediates the relationship between network centrality and strategic decision outcomes. The framework draws upon Resource Dependency Theory, Social Capital Theory, and the Knowledge-Based View of the Firm, offering a multi-level understanding of how network embeddedness, trust-based exchanges, and cognitive integration shape strategic governance. Theoretically, the study advances governance literature by positioning information flow as a cognitive mechanism within networked boards. Practically, it encourages organisations to reassess board effectiveness by considering directors’ network positions and internal information-sharing capabilities. The paper concludes by identifying conceptual limitations and proposing directions for future empirical validation. This framework offers a fresh perspective on how boardroom dynamics can be leveraged to enhance strategic agility and decision quality in complex environments

Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:rnd:arimbr:v:17:y:2025:i:4:p:112-124

DOI: 10.22610/imbr.v17i4(I).4742

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