Every executive has come across boardroom biases in their career. According to PwC’s Annual Corporate Directors Survey, 49 percent of senior leaders would like to remove at least one of the board members. In this article at strategy+business, Maria Castañón Moats, Paul DeNicola, and Leah Malone share how you can be aware of these boardroom biases.
Boardroom Biases to Note
Using behavioral psychology, experts share how these boardroom biases can make people judge others on the committee. To address that, here are the ways you can make board meetings more inclusive and open-minded:
Were there times when you thought one person is making all the decisions because of their level of experience? 43 percent of executives reported that their voices were not heard compared to 35 percent of independent board members. This is one of the common boardroom biases that you must avoid.
Tip: Let every board member share individual opinions during meetings. Additionally, provide them with learning opportunities to acquire knowledge in all business areas.
36 percent of the directors reveal that they could not disagree with specific topics even if they wanted to. For instance, a product is going to launch, and some have doubts about the quality. Instead of voicing their concerns or agreement in the conference, they discussed it with other like-minded board directors. Before they could reach a consensus, decisions were already made.
Tip: Have one-on-ones or send anonymous surveys after meetings to prevent these boardroom biases. You can also introduce outside counsel to have an objective conference.
No to Change
People do not like changes as long as they are getting results. This mostly happens to established companies wherein boardroom biases do not allow pioneering thoughts to flourish. Board members are quick to explain any dipping market share as a temporary glitch.
Tip: Start some exercises to help the board members broaden their decision spectrum. The authors suggest the game “If you were a competitor…” This will let the stakeholders realize that the company needs to move forward.
Stagnant Thought Process
There is a lot of qualms about a new technology or idea. Boardroom biases make it all the more impossible to advance such improvements. Instead of displaying support, the members look for flaws. Existing directors also choose board candidates that have the same perspective. This blocks out new thoughts or innovations from coming into the company.
Tip: Encourage the board members to hire representatives from various backgrounds. This would force people to open their mindset and think from all perspectives.
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