Image of data streaming as an algorithm

The 5 biases of board member selection

A team of finance professors set out to build an algorithm to select the best board members for a given company. See link here to the Harvard Business Review article:

Not only did the researchers find that companies would perform better with algorithmically selected board members, they also found that firms(without using algorithms) tend to be biased in choosing directors who:

  1. are more likely to be male
  2. have a lot of board experience
  3. possess a large network of connections
  4. currently serve on other boards
  5. have a finance background

In his book ‘Thinking, Fast and Slow’, Daniel Kahneman describes a long history of psychological research that concludes that using simple agreed rules will lead to better outcomes than allowing individuals to operate with total discretion over decisions.

Perhaps the first simple rules for hiring a new board director might be a female, millennial with a non financial background?

Previous PostAre Large Cap Company Management Typically Skilled Investors?
Next PostLearning to be a better Investor