Delusions, Confusion, and Biases

Massimo Massa (), Kai Taraporevala and Ludo Van der Heyden ()
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Massimo Massa: INSEAD

Chapter 10 in Value Creation for Owners and Directors, 2023, pp 209-225 from Springer

Abstract: Abstract Individual and group biases corrupt a rational and fact-based approach to governance. We lay out the problems affecting CEOs and their executive teams, as well as owners and their Boards of Directors. This chapter shows that a great deal of alignment and durable commitment is required for value creation. At the same time, heterogeneity on a board is an essential ingredient for effective decision making. Yet, heterogeneity may also render board work unmanageable. Board composition is thus a crucial decision. Examples are presented to illustrate this point, as well as to highlight the ways boards may succeed in conquering this challenge.

Keywords: Individual; Group biases; Board heterogeneity; Homogeneity (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-031-19726-0_10

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DOI: 10.1007/978-3-031-19726-0_10

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