When the COVID-19 crisis was in its early stages, most corporate boards shifted to virtual meetings out of necessity. Directors initially gave high marks to these virtual board meetings. In our 2020 Annual Corporate Directors Survey, 93% of respondents said director engagement overall remained good or excellent, and 88% said the same of their ability to challenge management. But as we enter the second year of the pandemic, it’s fair to ask how months of virtual meetings have affected boards.
It’s an important question because many directors believe virtual meetings are here to stay. According to research published by the National Association of Corporate Directors in January, most directors believe at least 20% of full board and committee meetings will still be held virtually after the crisis has passed.
Board culture can be a delicate matter. We would all like to believe that a group of talented, experienced, and strategic-minded directors would result in a well-functioning board. But directors are only human. They bring their own habits, preferences, past experiences, and individual biases. When these factors aren’t taken into account, it can interfere with a board’s collegiality and effectiveness. That’s true during normal times, and is especially the case now.
In a recent paper, we explored how insights from behavioral psychology can promote a healthy boardroom culture. We identified several harmful dynamics that can hold boards back, but one is particularly interesting in the context of remote meetings. Groupthink twists the largely beneficial desire of directors to reach a consensus on important matters into a force that suppresses difficult conversations and dissent.
Groupthink is a significant risk for virtual board meetings. In person, a director might be able to quietly float an issue or take a member of management aside to ask a question. These seemingly small actions can be an effective way to bring sensitive subjects to light. But they are much harder virtually. A director may be more likely to bite their tongue. Less robust debate may weaken decision-making.
While virtual meetings can contribute to groupthink, they can also alleviate it if conducted in the right way. Boards should consider the following steps:
Even when a board is suffering from groupthink, all members may not agree. Instead, directors with a dissenting point of view may feel it’s too hard to raise them. Running virtual meetings that make room for everyone’s voice can help minimize the risk of groupthink.
Bad habits are hard to break once they take hold. Virtual board meetings may well outlive the pandemic, so it’s only prudent to guard against any unwelcome effects they may have had on board culture. But taking proactive steps against harmful dynamics like groupthink won’t just help directors now. A healthy board culture is crucial for companies that wish to emerge stronger from this crisis.