In this article, I will discuss a topic which, according to the Institute of Directors, is the most pernicious of psychological conditions in board decision making. This is “groupthink”.

Frequently found among tight-knit groups (any boards come to mind), groupthink was a term coined by social psychologist Irving Janis, who listed eight symptoms of groupthink which in the context of boards are:

• Illusions of invulnerability creating excessive optimism and encouraging risk taking.

• Rationalising warnings that might challenge the board’s assumptions.

• Unquestioned belief in the morality of the board, causing directors to ignore the consequences of their actions.

• Stereotyping those who are opposed to the board’s view as weak, biased, or stupid.

• Pressure to conform placed on any director or others who question the board’s view, couched in terms of “disloyalty”.

• Self-censorship of ideas that deviate from the apparent board consensus.

• Illusions of unanimity among board members, with silence being viewed as agreement.

• Mindguards who stifle any dissenting information or views — often an overly directive chairman or CEO.

Do you recognise any of these?

Of course a lack of diversity on the board is likely to create an environment where groupthink becomes the norm. This dysfunctional pattern of behaviour clearly has an impact on effective decision-making, with choices of courses of action being limited, risks associated with the selected course of action being given insufficient consideration, and later review of the results of the selected course of action being stymied.

Lack of diversity is not the only cause of this phenomenon. An overly dominant chairman who does not refrain from giving his or her opinion before others express theirs, or who displays an unwillingness to listen to or consider contrary viewpoints can cause board members to “go along” with the chairman’s or indeed a forceful CEO’s suggested course of action.

This style of conformity is prevalent when the matters before the board are complex or where the data provided is not straightforward or easily understood. It takes a strong person to say “slow down, there are aspects of this data that I do not understand”. And the desire to conform with others on the board is a natural human tendency which is often hard to resist.

But, resist he or she must as to do otherwise is to abdicate one’s responsibility as a director.

This desire to conform is not always a conscious thought process, and given that we all come with certain biases from our backgrounds, experiences or even political beliefs, it is easy to allow evidence to weigh more heavily on the side of beliefs already held.

We see this in our everyday lives as supporters of any political party clearly want to believe the evidence that supports the view of the party with insufficient critical thinking being applied by the individual, even with a willingness to believe “fake news” or some of the nonsense shared on social media. I digress into the political arena, but the parallels of this human weakness are there to see.

This tendency to search for evidence that supports already held beliefs is known as “irrational belief persistence” and it has a very negative impact on board decision-making.

It brings to mind a lecture I once attended at Wharton as part of their Advanced Management Programme. The professor presented to us a case study. The company we were reviewing was at a crossroads, sales were declining and they were being overtaken by their competitors. We were given three alternative actions that the company could take:

1. To continue as they were in the hope that conditions would improve.

2. Enhance the service conditions on the product they sold.

3. And more risky, develop new products to take advantage of advances in technology.

We were provided with a lot of data, all in my opinion, leading us to the selection of option two.

After a brief discussion, the professor asked for a show of hands on each option. No hands showed for option one and everyone but me showed hands for option two.

The professor’s words were: “That is correct, option two was selected and the company doubled its sales.”

As she was about to move on to the second case study I put my hand in the air.

After being acknowledged I humbly suggested that the company had made the wrong decision and that they should have selected option 3.

“But option 2 doubled their sales,” the professor said. To which I responded: “If they had selected option 3 they would have quadrupled their sales.”

“But you don’t know they would have,” she said, to which I responded: “And you don’t know that they wouldn’t have.”

I know, you’re thinking what a smart aleck.

But what ensued was a lively discussion, with me trying hard to make my case with others, to be fair, joining in to help me.

At the end of the lecture the professor asked me to stay behind for what I thought was going to be a reprimand for me having hijacked her lecture and preventing us moving on to the next case study. Instead, she thanked me for causing the best discussion she had experienced on this case study.

The point of telling this story is not to cause you, as a director, to hijack board meetings but to encourage you to be brave enough to offer a different viewpoint. At worst it will ensure that every option is given sufficient airing and at best, it will uncover an option or enhance an option that contributes to the company’s greater success.

You may even be given a gold star. Oh! And don’t forget to bring an apple for the chairman (teacher).