The primary purpose of a board of directors is to provide governance and oversight for an organisation. But when governance lets a business down, it is often perplexing when a group of well-intentioned, highly intelligent individuals come together and fail to achieve their goals.
Consider the catastrophic failures of some well-known boards; Carillion, the UK’s second-largest construction firm, went into liquidation due to unsustainable debt and poor business practices. The collapse left nearly £2 billion in debts and required £150 million in taxpayer funds to maintain services. Enron’s bankruptcy, resulting in over $60 billion in shareholder losses, was a direct result of the board of directors failing to prevent high-risk accounting practices, conflicts of interest, and extensive off-the-books activities. Volkswagen’s emissions scandal resulted in financial losses exceeding USD$30 billion due to fines, vehicle buybacks, and legal costs. The board’s lack of independent oversight and governance issues allowed the misconduct to occur, significantly contributing to these losses.
Finally, look at the Post Office scandal, which has resulted in £165 million in fines so far. It’s hard to imagine that anyone on the Post Office board intended the business to implement faulty software, leading to so much damage.
Our advisory team works closely with boards, particularly new ones, to set them up for success. Despite the ample capability, experience, and intelligence within these groups, we often find that when experts come together, they are more prone to common behavioural traps. If not mitigated, these traps can be detrimental, as seen in the examples above. This article explores these traps and how to effectively mitigate them.
Clever people are evaluative by nature
Trap 1: Evaluating each other
High performing individuals have well trained evaluative brains. They are accustomed to qualifying decisions and dissecting solutions, providing challenges and input to ensure the right outcomes. This is also the mandate of board members; to evaluate proposals, solutions, and problems. However, when these individuals come together, this well-exercised muscle can lead to being overly evaluative of each other, especially since board members usually do not work closely together on a daily basis. These evaluations can lead to fixed beliefs about others’ agendas, capabilities, or assigned roles. While not always invalid, they can become the lens through which board members view every interaction, making them hard to change even with new information. Evaluations fuel biases, resulting in unhelpful board behaviors such as only listening to those deemed credible, only agreeing with those who share similar views, always playing the diplomatic role (even when being assertive might be more appropriate for the situation), or disengaging when someone perceived as less credible speaks.
To be truly objective and act in the best interest of the business, board members need to recognise and challenge their own evaluations and instead approach each other with curiosity, borne out of an intention to understand and potentially be challenged themselves.
Clever people don’t necessarily make clever teams
Dr. Meredith Belbin was the first to explore why groups of well-intentioned, clever people fail. His experiments led to the term “Apollo Syndrome,” which describes situations where highly capable individuals collectively perform poorly. This term originated from experiments conducted on NASA’s Apollo mission teams. One team, composed of individuals who were unambiguously more capable than the rest, often finished near the bottom in performance.
His studies pointed out two traps that we see at board level:
Trap 2: Destructive debates
In the Apollo experiments, team members spent excessive amounts of time trying to persuade others to adopt their viewpoints. High performers are used to healthy debates, but the trap lies in over-focusing on individual contributions rather than engaging with curiosity in group discussions. This results in listening to respond rather than listening to understand, followed by lengthy debates where individuals try to prove their points instead of reaching a consensus.
Trap 3: Spotting flaws
Highly analytical individuals are prone to dissecting arguments and striving for perfection, especially when stakes are high. In the Apollo experiments, it was found that as pressure increased, individuals focused on spotting the weak points in others’ arguments. This can lead to ideas being dismissed prematurely and individuals disengaging. It is human nature to be sceptical of those who think differently, and without intentional effort, it is difficult to remain objective and to not be drawn into flaw-spotting.
Clever people know how to ‘wing it’
Trap 4: Inadequate diligence and preparedness
High-performing individuals with busy lives often develop the habit of “winging it.” They rely on their agility and adaptability to handle diverse demands. However, this can lead to a lack of preparedness. That’s why Jeff Bezos implemented a rule at Amazon where meetings begin with a period of silent reading to ensure everyone is fully informed. This practice prevents debates based on subjective or incomplete interpretations. Without adequate preparation, board members may engage in discussions without a complete understanding of the issues, leading to suboptimal decisions.
Clever people can be mischievous to get the job done
Trap 5: Side line conversations
High performers disengage when perspectives are too far removed, opting to save their efforts for outside the room. There is also a belief (conscious or subconscious) that they can get their point across if ‘they just get to that one influential person, one on one’. While outside discussions can be productive, they can also lead to miscommunication and distrust. Setting clear rules around when these conversations are appropriate is critical.
Board effectiveness is crucial for the success of any organisation. By recognising and mitigating the common traps that groups of experts fall into, board members can enhance their collective performance. Setting clear rules of engagement, fostering curiosity and understanding the personal traps each board member is more prone to are essential steps in this process. By doing so, boards can leverage the strengths of their members, make informed, objective decisions and combat risks- for the best of the business and its stakeholders.
Contact
While others may specialise in the technical requirements of board members, we focus on understanding people and their behaviours. Our expertise lies in helping boards proactively mitigate common but potentially detrimental traps. If you’d like to learn more about our leadership advisory services and how they can be tailored to fit your business, or how our team of business psychologists can best partner with you, contact Jana Botha at [email protected].
