How psychology might explain what’s holding a board back
– Boards should learn about authority bias, groupthink, status quo bias and confirmation bias so they don’t fall into those traps.
– 43% of directors on boards with an executive chair said it was difficult to voice a dissenting view—compared to just 35% on boards with an independent chair.
This PwC memo is an interesting one. It delves into authority bias, groupthink, status quo bias and confirmation bias. Here is an excerpt about when the CEO is also the board chair:
Directors who serve on boards where the CEO serves as chair may face a particular version of authority bias. The CEO chair’s position is magnified through that executive role, particularly if the board doesn’t have a lead independent director, or if that person is less vocal.
This effect can stymie the board. In our Annual Corporate Directors Survey, 43% of directors on boards with an executive chair said it was difficult to voice a dissenting view—compared to just 35% of directors on boards with an independent or non-executive chair. To address the issue, examine the role of executive sessions. These sessions, held without executive directors, should close every board meeting.
And keep an eye on the types of concerns that get raised. Some airing of new concerns is appropriate, but if directors are routinely “saving” issues for executive session, board leadership should dive deeper into why board members are not comfortable enough to bring it up during the full board meeting.