Governance 101

“Board governance is the framework that structures the board and how it operates. At its core, board governance includes the boards responsibilities and organisational well-being.”

The Ventana Woods Board’s code of ethics covers many of the basics.  Honesty and Good Faith.  Conflict of Interest.  Confidentiality. Good Conduct, Support and Defamation. Having served on many boards over the years, I have studied many concepts in good board governance. One of the first concepts that comes up is good decision making. The reason our board has 7 directors is to get different viewpoints and critical thinking skills.

One of my favorite sayings is if 2 people in business always think alike then one of them isn’t necessary. This concept is at the core of high performing boards. Governance trainers talk about the concept of “groupthink”.

Groupthink is a phenomenon that occurs when the desire for group consensus overrides people’s common sense desire to present alternatives, critique a position, or express an unpopular opinion. Here, the desire for group cohesion effectively drives out good decision-making and problem solving. The phrase was originally coined in the novel 1984 by George Orwell. Groupthink has been linked to many bad decisions by groups of very intelligent people. Events like Pearl Harbor, Bay of Pigs Invasion, Cuban Missile Crisis, and Iraq War. There are many videos about the Space Shuttle Challenger Disaster and how groupthink led to this event.

Groupthink is one of the reasons that Boards are not normally appointed as a group. As good governance board directors normally have their terms staggered. Groupthink can be a roadblock to good decision making.