Board Oversight Mechanisms in Financial Distress Decision-Making: A PRISMA-Based Systematic Review
DOI:
https://doi.org/10.51903/jmi.v5i2.342Keywords:
Board governance, Corporate governance, Financial distress, PRISMA systematic review, Strategic decision-makingAbstract
Corporate governance plays a critical role in shaping organizational responses to financial distress, yet prior research has largely emphasized distress prediction rather than examining how boards actually exercise oversight during crisis decision-making. This study aims to clarify how board oversight mechanisms are conceptualized and how they influence strategic decision quality under conditions of financial pressure. Using a PRISMA-based systematic literature review, the study systematically identified, screened, and synthesized peer-reviewed governance and crisis management research, followed by thematic coding and conceptual mapping to classify oversight mechanisms across structural, procedural, and behavioral dimensions. The findings reveal that these three dimensions consistently appear across the literature and jointly shape decision accountability, responsiveness, and reliability, indicating that governance effectiveness emerges from their interaction rather than from any single mechanism. The review also identifies a persistent conceptual gap between bankruptcy prediction studies and governance decision-making scholarship, highlighting fragmentation in existing knowledge. These results contribute theoretically by proposing an integrated typology of oversight mechanisms tailored to distress contexts and practically by offering an evidence-based framework that organizations and regulators can use to evaluate board effectiveness during crisis periods. The study further demonstrates the value of systematic synthesis methods for advancing conceptual clarity in multidisciplinary governance research.
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