Much attention has been paid to surface-level diversity in the boardroom, but what about diversity of thought?

“Groupthink describes faulty decision-making,” says Rahul Bhardwaj, president and chief executive officer at the Institute of Corporate Directors. “It’s literally when you have folks that get together to come up with a certain decision based on a certain set of facts and given the make-up of the group, they literally think so alike that they’re actually unable to entertain any descending or outside perspectives. So, they tend to rush to a very common and, at times, simple decision that they agree to very quickly without really probing it.”

While this can lead to quick decision-making, it shouldn’t be confused with good decision-making, he notes. “The downside of this is you decrease dissension, so you’re not getting alternative points of view.”

Groupthink is particularly relevant in the North American investment industry, says Guy Burry, chair of York University’s pension investment committee, because many of these professionals come from the same schools and are taught in the same way, which hinders diversity of thought.

A foundational piece to avoiding groupthink is board composition, notes Bhardwaj.

When it comes to diversity of thought, having different personalities and professional backgrounds around the board table is important because these individuals bring alternative types of questioning, agrees Marc Gauthier, Concordia University’s corporate treasurer and chief investment officer.

It’s also important to delegate duties to different committees so that people are not just approving their own recommendations, he notes.

Another tactic to use is governance budgeting, Gauthier says, where a board allocates specific time to make recommendations, discuss concerns and debate topics.

A key to avoiding groupthink is fostering an environment with respect where people are comfortable asking the right questions, Burry notes. “It means you can’t use the rules of order — whose turn is it to speak — you have to have that respect that you’re going to not jump on people and let them have that conversation.”

The chair plays an important role in encouraging debate, adds Bhardwaj. “Lots of people look at the chair as the one who’s liaising with the [chief executive officer], helps set the agenda for the meetings, makes sure everything runs according to the agenda. But in a big way, they’re a really important part in ensuring there’s no group think and encouraging dialogue. And if the chair goes around pulling these ideas out, supporting at times descenting opinions, that’s really important.”

And having a devil’s advocate is key, notes Burry. “A chair should, if they think or see a conversation where everyone is just unanimously agreeing, ask the contrary . . . If you’re asking about hedging — say, well, what happens if we don’t hedge? What are the ramifications if we don’t hedge?”

A formal way to do this is known as red teaming, which involves assigning a person or group the job of opposing the point of view of the organization they’re helping.

A board might look at a particular situation and decide to red team it because it’s something they haven’t dealt with before, says Bhardwaj. “And you don’t necessarily have to red team from within the board; you might want to bring someone from the outside who has another perspective to push you in a different direction to make sure they’re not falling for the easy answer as opposed to the right one.”