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.
Highlights
A core activity of boards is to carefully consider the pros and cons of different strategic options as they engage in joint decision-making
With an experimental design, we explore whether the use of one of two discussion procedures influences decision quality and the subjective evaluations of the decision-making
The subjective measures were not significantly related to objective decision quality, neither was time spent. These findings suggest that subjective evaluations of the decision-making and time spent on discussion do not predict higher decision quality
Summary
A core activity of boards is to carefully consider the pros and cons of different strategic options as they engage in joint decision-making. One way organisations try to foster sound decision-making at the top level is by forming a diverse board containing members with differing and complementary expertise. Creating informationally diverse boards is recommended as a way to enhance the quality of discussions and decisions because more perspectives are available to the decision-makers In theory, when board members exchange and consider all their unique knowledge and information, this should contribute to the quality of the decision-making and result in better decisions at the highest level of organisations. Informationally diverse boards consisting of individuals who can bring a different perspective to the table have the potential to reach better-informed decisions than non-diverse boards
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