Quality of group decisions by board members: a hidden-profile experiment

Abstract

PurposeReaching decisions in a deliberative manner is of utmost importance for boards, as their decision-making impacts entire organisations. The current study aims to investigate (1) the quality of group decisions made by board members, (2) their confidence in, satisfaction with, and reflection on the decision-making, and (3) the effect of two discussion procedures on objective decision quality and subjective evaluations of the decision-making.Design/methodology/approachBoard members of various Dutch non-profit organisations (N = 141) participated in a group decision-making task and a brief questionnaire. According to the hidden-profile paradigm, information was asymmetrically distributed among group members and should have been pooled to reach the objectively best decision. Half of the groups received one of two discussion procedures (i.e. advocacy decision or decisional balance sheet), while the other half received none.FindingsOnly a fifth of the groups successfully chose the best decision alternative. The initial majority preference strongly influenced the decision, which indicates that discussion was irrelevant to the outcome. Nevertheless, board members were satisfied with their decision-making. Using a discussion procedure enhanced participants' perception that they adequately weighed the pros and cons, but did not improve objective decision quality or other aspects of the subjective evaluation. These findings suggest that board members are unaware of their biased decision-making, which might hinder improvement.Originality/valueRather than using student samples, this study was the first to have board members participating in a hidden-profile task.

Business model innovation decisions: the role of group biases and risk willingness

“…Lu et al, 2012;Schulz-Hardt and Mojzisch, 2012;Sohrab et al, 2015) showing that groups do not share information and knowledge sufficiently (He et al, 2021;Silva de Garcia et al, 2022;Goncalves et al, 2023) and therefore make biased decisions (Brodbeck et al, 2007). We know that due to confirmation bias, individual managers tend to search for information that confirms their existing beliefs and actually stick to their initial preference (Stasser and Titus, 2003;Coffeng et al, 2021;Nicholson et al, 2022). In our study, managers perceived themselves as reflective, although Group biases and risk willingness in BMI they did not clearly indicate that they were aware of confirmation bias, either at the individual or group level.…”

“…, 2021), especially on the effects of information sharing during debate (e.g. Coffeng et al. , 2021).…”

“…However, we must raise awareness that quick agreements may have a negative impact on decision quality if the information is not thoroughly collected and analyzed. Although various discussion procedures to overcome confirmation bias in groups are recommended in the literature, they remain mostly ineffective (Sohrab et al, 2015;Coffeng et al, 2021). Therefore, future experimental studies should develop effective discussion procedures that incorporate time pressure, as already cautioned by Coffeng et al (2021).…”

“…. female Company-specific and demographic details of the respondentsand Wu et al (2020), for the disadvantages of group decision-making, we relied on established work byBrodbeck et al (2007),Chapman (2006),Coffeng et al (2021),Lu et al (2012),…”

Overcoming the threat of anti-bias interventions: Combining self-report and psychophysiological measures to capture the process of change.

“…An alternative way of presenting such an intervention is during an actual group event, allowing for real time interactions or workgroup sessions with other attendees. This is another option to explore in future research, where multiple sessions can be used to compare the impact of different types of interventions (see also [86]). Nevertheless, considering that many of such events have been replaced by webinars or other online meetings since the Covid-19 pandemic, our experimental paradigm nicely reveals how such a 'distant' approach to anti-bias interventions can still have impact and be effective.…”