The groupthink trap  Similarity is a ticket to failure

Coined by American social psychologist Irving Janis in his 1971 book, Victims of Groupthink, the term explains a phenomenon that can occur when “decision-making bodies agree for the sake of agreeing to abandon their critical judgement”. It is the sacrifice of debate for the sake of harmony.

“Take the financial crisis: that only happened because the people in charge convinced themselves it was impossible,” Weller, who was awarded a CBE in 2015 for public service, tells Director. “The prevailing consensus was that markets could never become illiquid. No one asked: but what if they did?”

The cause

What could persuade a group of intelligent people to abandon their acute powers of reasoning and become nodding dogs? The answer is complex. According to Claire Trachet, founder of advisory firm Trachet, which helps fast-growing companies make board appointments, much of it comes down to human nature and power dynamics.

“Sometimes, one person has a lot of leverage on the board,” Trachet says. “Perhaps they are the superstar investor and the only person who can help finance the company further. No one wants to rock the boat. That creates groupthink.” She has also witnessed other catalysts for groupthink, such as when a company is outperforming rivals. “So, the board thinks, ‘we must be doing something right,’” she says.

“I’ve been in rooms where everyone initially nods in agreement around the table,” says Jessica Espinoza, who heads up 2X Global, the finance industry’s membership body for gender equality. “That can feel efficient in the moment, but sometimes it’s a signal that the same assumptions are going unchallenged.”

Weller says that groupthink isn’t a conscious choice; it’s more insidious. “I loved my leadership team when I worked at Argos 20 years ago,” she says. “We worked really well together. But, looking back, that was partly because we weren’t a very diverse team. There were no contrarian views. No representation from minorities. That could have helped us to see many opportunities that just weren’t on our radar.”

The antidote

The prevailing wisdom is that building a diverse board can help prevent groupthink. This was borne out by a review of more than 200 studies, published in 2025, which found that “board diversity positively influences corporate financial performance in a majority of the research”. A closer look at some of these individual studies shows the detail: a Cloverpop analysis of 600 business decisions made by 200 different teams found that more diverse teams made better decisions up to 87% of the time. Harvard Business Review research shows cognitively diverse teams solve complex problems faster.

A recent study published in the European Journal of Finance found that “banks with greater boardroom gender diversity and transparency in its disclosure are associated with a higher likelihood of detection of misconduct and larger sanctions”. This reflects Weller’s point about the financial crisis – it’s the people asking the leftfield questions that discover risk and wrongdoing.

“On boards where there is real diversity and not just one token voice, the conversation is usually more rigorous,” explains Espinoza. “Assumptions are challenged more quickly, risks are examined more carefully, and decisions tend to be more balanced. In contrast, when everyone around the table shares similar backgrounds and experiences, discussions can move very quickly – but sometimes too quickly, and in the wrong direction.”

Weller, who was diagnosed with multiple sclerosis in 2009, acknowledges the power of her unique perspective at BT. “I helped BT draw on the experience of people with disabilities, which they used to redesign their Home Hub with both lights and sound to warn of a problem,” she recalls. “If you’re blind you can’t see the light, and if you’re deaf you can’t hear the noise.”

The balance

Not all diversity is created equal. “It’s not just about external difference,” says Dr Shefaly Yogendra, a non-executive director on FTSE 250, university and professional services boards, as well as an experienced chair of ESG, remuneration, nomination, and audit and risk committees. “You need to go deeper and look at how they have trained, where they have lived, their formative experiences. You need to find voices that enhance the quality of the debate.”

Yogendra embodies multiple kinds of diversity: she is a woman, of Indian origin, she trained as an engineer, she has built an AI company, achieved a PhD in decision-making, and she has worked in corporate venturing in the technology and biotech sectors. “I have trained in multiple disciplines, lived in many countries and have a wide range of interests,” she says. “Plus, my eternal and endless curiosity makes me a good board director.”

Yogendra interviewed 100 business leaders and non-executives about how to run effective boards for her book Uncharted Spaces: Reset the agenda. Reimagine the boardroom. “The key is to recognise the differences around the table and to derive value from that,” she says.

Too often, according to Weller, boards will tick the diversity box by appointing a woman or a person of colour. “But they choose a woman who has been to the same university as them, held the same sort of roles,” she says. “You can be diverse on the surface without being diverse at all.”

The board also must actually listen to the diverse voices it appoints. “The effectiveness of diverse voices depends on the willingness of the board to learn,” says Weller. “Otherwise you end up in a world where someone says, ‘Yes, that’s very interesting, but let’s do it the way we have always done it.’”

The limitations

Appointing a diverse board doesn’t mean change will happen instantly, even when its members speak up. Board members are not operators:
they can influence but not execute. This distinction is important.

“I remember when I was on the board of Lloyds, and a year had passed,” recalls Weller. “I sat down with the chair of the risk committee, who was a ‘big beast’ on the board, and said, ‘I can’t do this anymore. Nothing I say is going in. Nobody is listening.’ He told me, ‘You’re the slow drip that wears away the stone. Change isn’t going to happen overnight – but keep going.’”

The UK ranks among the top countries in Europe for boardroom diversity. The Parker Review, published in March, revealed that 98% of FTSE 100 companies now have at least one ethnic minority director on their board, a record number – and a big increase from 52% in 2019.

Last year’s FTSE Women Leaders Review report showed that women now occupy 43% of roles on company boards in the FTSE 350, a new record. Yet critics point to the so-called ‘Golden Skirts’ syndrome, the phenomenon whereby the same women – often from affluent backgrounds, Oxbridge educated and white – hold multiple non-executive positions.

The chair

Being the person that brings an alternative view is “no fun”, admits Weller. “I have been appointed as the ‘diverse voice’ many times in my career. When you’re the one asking questions that everyone presumes they have the answers to, people look at you like you’re stupid.”

She cites her time serving on the board of United Utilities. “I asked, ‘What’s the risk of a dam breaking and flooding a village?’ Everyone looked at me,” she recalls. “They told me, ‘There’s no way that would ever happen.’ My point was: assume that it did, what would we do? Interestingly, the management there were great, they listened and were open to challenge. But, if you’re all the same kind of people, with similar backgrounds and experience, you must constantly watch you don’t end up with blind spots.”

One person has the power to amplify and support diverse voices around the boardroom table: the chair. “This is perhaps the most important job they have,” says Weller. “To get a range of voices to the table and encourage everyone to respect diversity of thought. That’s the only way these voices can help provide a textured solution to complex problems.”

A great chairperson does more than encourage everyone to speak up, they enforce the culture of the board, including the need to debate with respect. “As chair, it’s your job to turn points of difference into constructive solutions,” says Weller. “You must not allow conversations to descend
into conflict.”

Non-executives – appointed as the contrarians on the board – don’t have to rely solely on the chair for support, says Yogendra. Fostering ‘informal’ relationships with fellow board members outside of board meetings is vital. “Seeing each other as human, understanding one another’s backgrounds and what has shaped your perspectives” makes you more likely to be heard in the boardroom, she says.

How to diversify

“Too often, boards recruit through the same informal networks of current or former CEOs,” says Espinoza. “It’s understandable – because people tend to recommend those they already know – but it naturally limits the pipeline.”

Asking for a diverse spread of nominations from the outset is a useful way to help ensure a level playing field, such as equal numbers of men and women, recommends Espinoza. “And it’s also important to revisit outdated criteria,” she adds. “For instance, insisting on previous CEO experience can unintentionally exclude many highly qualified women who have led major divisions, investment portfolios or global programmes.”

Yogendra interviewed Barnados chair Mark Wood to find out how he encouraged diversity of thought on the board. He told her that during the board recruitment process he would ask the nominations committee to ask, “Why not?” for candidates that they planned to reject. “He found that, through this exercise, people were forced to challenge their biases and eventually make more robust decisions,” Yogendra recounts.

Beware appointing a diverse voice who is expected to speak for all women, or all of a certain race, however. “There are 1.4 billion Indians in the world,” says Yogendra. “I can’t speak for all of them!”

The UK has come a long way in boardroom diversity. Some of these forward-thinking organisations will achieve improved financial performance. Many will find their ability to adapt to new challenges and trends enhanced. Others will avoid expensive or painful missteps. All because someone in a boardroom dared to ask a ‘stupid’ question. And their peers listened.