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Groupthink (Janis, 1971) has been discussed in relation to group cohesion, and the effect that can occur in group behaviour and dynamics when people work together and particularly those who have a degree of ‘sameness’. In governance, such people may have taken the same route to the boardroom (for example retired CEOs), or be appointed courtesy of the ‘old boys’ network’, or may simply be individuals who behave differently in the boardroom from their usual style because of how various personalities combine and work together in that specific group environment.

Forbes and Milliken (1999) explain the groupthink phenomenon as occurring “when members of highly cohesive groups engage in self-censorship and act as ‘mindguards’, pressuring deviant thinkers to conform to majority opinions” (p. 496). Indeed, researchers studying this pressure to conform to group norms, have observed that, “on average, experts will state their knowledge once or twice in a group discussion, and

when no one else picks up on it, the knowledge gets lost in the decision-making process” (Atkinson & Salterio, 2002, p. 25). The implication here is that the overall functioning of the board may potentially be either aided (through not succumbing to unproductive conflict) or hampered (through suppressing useful minority opinion) by the effects of ‘groupthink’.

Accountability, according to Kroon and van Kreveld (1992), is one strategy to alleviate the extent of negative impact from groupthink. In their study of 171 students at Utrecht University looking at the effects of accountability and gender on groupthink these researchers reported that accountability “significantly affected some aspects of decision making” (1992, p. 9), proving to “have some beneficial effects on group decision making” (1992, p. 10). It could be argued that, because of their requirement to report to shareholders and to comply with legislation, all boards have a measure of accountability, yet this will not automatically ensure avoidance of the tacit and covert elements of groupthink.

Groupthink may result in easier, more congenial board meetings but may not serve the company well. Strategies to avoid groupthink have been a factor in the promotion of diversity on boards as a positive approach to good governance.

Compounding the complexities of groupthink in relation to governance and board composition is the behaviour referred to as ingratiation, mentioned earlier in relation to Westphal and Stern’s (2007) findings. Ingratiation occurs when individuals behave in a particular way in order to enhance their attractiveness to those with whom they interact. Judge and Bretz (citing Jones, 1964), mention:

three types of ingratiation tactics: other enhancement (i.e. flattery); self- presentation (e.g. false modesty, smiling, rendering favors); and opinion conformity. (1994, p. 45)

Westphal and Stern (2007) explored interpersonal behaviour exhibited by some as a way of obtaining board positions. They conclude that:

interpersonal influence from ingratiation can substitute to some extent for the social capital provided by an upper class background, attendance at elite

educational institutions or membership in prestigious social clubs. (2007, p. 194)

Together, groupthink and ingratiation are aspects of boardroom behaviour that are related to high degrees of interpersonal identification and board homogeneity, both of which might prove counter to effective board performance. But if homogeneity impacts on performance, heterogeneity of the group will also impact on how the group operates and behaves, and thus on how the board functions. Influential aspects of board homogeneity/heterogeneity relate to the combined demographic characteristics of directors, including age, gender, and ethnicity. Schneider (1987) points to a group’s fundamental tug toward homogeneity:

if people who do not fit leave, then the people who remain will be similar to each other. But the critical point is not just that they will be similar to each other, but that they will constitute a more homogeneous group than those who were initially attracted to the setting. (p. 442)

But, as mentioned before, this raises a fundamental concern for organisations, and for governance structures, as to whether the resulting homogeneous groups will provide the best outcomes for the organisation. Board members may get on well together, but will they debate robustly and make the best decisions? This is the tenor of the Korn/Ferry International report which advocates the need for independent directors on a board because their presence can produce a beneficial tension in the relationship between management and board (2002).

Tsui, Egan and O’Reilly (1992) consider both sides of this issue in terms of social identity and people’s tendency to prefer being with similar others even though there is some literature on individuals’ needs for uniqueness. Significant in the research findings of Tsui et al. is their assessment of heterogeneous groups in that “[t]hey are beneficial for tasks requiring creativity and judgment, but they can also decrease cohesiveness and increase turnover” (Tsui et al., 1992, p. 575). Thus, in seeking the optimal combination of directors, for favourable board performance, there is a balance to be struck between two, seemingly contradictory, imperatives. On one hand, comparable backgrounds and experiences will apparently promote a more harmonious group, and therefore facilitate board decisions and general processing of the board’s

business. On the other hand, such congruence does not stimulate the creative thinking that might assist better board decisions. Further, these issues raise questions in terms of the Chair’s role, the calibre and professionalism of directors and, as Kroon and van Kreveld (1992) report, the extent to which accountability for decisions is enforced.

Another, related factor, in the similarity-diversity debate with regard to board membership is that of pluralistic ignorance. This concept was featured approximately 30 years ago as the Abilene Paradox, and relates to the occurrence of agreement or consensus in a decision-making process to mask organisational problems (Harvey, Novicevic, Buckley & Halbeselben, 2004, p. 216). Essentially, the Abilene Paradox “highlights the collective inability to manage agreement and reach an acceptable decision, particularly when individual participants privately feel that an alternative decision would be better” (Harvey et al, 2004, p. 216). The consequence of the Abilene Paradox is “poor decision-making, in spite of a situation where formal consensus was reached among the management team members” (Harvey et al, p. 217). Pluralistic ignorance was explored by Westphal and Bednar (2005) in a study of mid-size public companies in America. Westphal and Bednar found that:

higher levels of diversity among outside directors with respect to functional background, educational affiliation, and gender tend to exacerbate pluralistic ignorance, ultimately increasing strategic persistence in the face of poor firm performance. (p. 289)

However, they contend that there are ways of reducing pluralistic ignorance through actively working to increase social cohesion among outside directors, and suggest the use of:

decision-making aids such as dialectical inquiry or the devil’s advocate method (Katzenstein, 1996) that increase the tendency for group members to voice what are perceived to be dissenting opinions. (Westphal & Bednar, 2005, p. 289)

Thus, perhaps paradoxically, in addition to groupthink and homogeneity, pluralistic ignorance is a factor that can potentially limit the quality of a board’s performance and, therefore, firm performance.

The challenges and benefits of diversity in board composition are further discussed in the following section (2.6). As is often the case with human behavioural issues, matters associated with homogeneity and heterogeneity on boards are fraught with contradiction. This may not be surprising when we consider board diversity, especially when we focus on gender issues. Inevitably, people employ a range of behaviours as they approach tasks and select from a repertoire of responses and actions according to the situation. The studies I have outlined show that, in the governance arena, some specific and deliberate behaviours impact on appointments and therefore on how governance is enacted. They also demonstrate that governance literature draws on, and explores, homogeneity, heterogeneity, including behavioural themes such as groupthink, demographic, pluralistic ignorance, ingratiation, and their effects on decision-making processes and decision quality. Previous sections outline and briefly examine arguments that propose homogeneity for team members in terms of a number of dimensions, including those relating to board member satisfaction and ‘fit’.

Countering arguments for homogeneity are those for heterogeneity. These arguments cite the strengths brought about by variety as a basis for creative decision-making, through canvassing a range of ideas. It is on this basis that appeals are frequently made for board diversity in terms of not only skill, but also gender, age and ethnicity.

In summary, arguments put for diverse board composition have been both supported and contested, with researchers and commentators representing a range of views. While each study is likely to contribute somewhat to the overall understanding of corporate governance, it is unsurprising that findings can be often contrary. The broader cultural environment aside, individual differences in personality and cognition impact on each separate board (group) and each set of governance circumstances. There will be personality types that prefer and work well in a homogeneous group and there will be those that enjoy the opportunity to debate with colleagues within a heterogeneous group. Similarly, there will be individuals who select ingratiatory behaviour to enhance their standing with a group or in the eyes of the individuals who have greater power or influence, and those who will choose to be uncompromising in their opposition to others if they feel strongly about an issue.