Why Good Boards Make Bad Decisions: Four Factors Undermining Board Effectiveness

PwC (Oct 1, 2025) "Why Good Boards Make Bad Decisions: Four Factors Undermining Board Effectiveness" identifies four behavioural traps that recur in otherwise well-credentialed boards: psychological safety failures, where directors facing high interpersonal risk withhold ideas, challenges or dissent and push the board toward the safest rather than best decisions; threat rigidity, which shuts down creativity precisely when uncertainty demands adaptive thinking; escalation of commitment, where boards keep funding losing courses to justify prior investment or preserve self-image; and underestimating collective intelligence, where group norms favour conformity over diverse-team problem-solving. Useful diagnostic for SEA mid-market boards whose harmony rituals routinely produce default-on-the-incumbent-strategy outcomes.