PwC Experts Explore Psychology Underlying Board Group Dynamics
PwC governance specialists in a recent blog post observe that a corporate board’s culture and decision making can be affected by each director’s habits, preferences, past experiences and individual biases. “Boards can’t achieve a truly strong board culture without taking these dynamics into account,” they write. The article identifies four overarching dynamics that can hold boards back: deference to authority, groupthink, a preference for the status quo, and confirmation bias. The authors define these dynamics as follows:
Authority bias: Overvaluing the opinion of one director with a particular set of skills or experience, or a director in a leadership role.
Groupthink: Being overly concerned with coming to a consensus.
Confirmation bias: The tendency to overvalue evidence that confirms one’s view, while undervaluing evidence that disproves it.
Status quo bias: A reluctance to change the way things are.
They offer warning signs to spot these issues and tools to address them. For example, to minimize groupthink they offer a range of tips, including: leveraging the board’s assessment process by seeking input during individual interviews or questionnaires, when directors may feel more open, on whether dissent is allowed or stifled; and pushing management for materials directors need when they need them, ensuring the materials are highlighting key issues and discussion points.