Recent and historic post-mortems of major governance scandals reveal that whistleblowers, or other well informed insiders whose knowledge could have prevented disastrous corporate scandals, were isolated and ignored. Calls for improved governance practices by boards have been reinforced by new legislative mandatory practices, escalated prosecution and a flourishing consulting business based on often misleading structural metrics. While such formal recipes have made important contributions regarding improved guidelines over reporting transparency and the avoidance of conflicts of interest, such checklist approaches miss the critical culture elements of good governance. The actual decision-making process of the board and style of executive are heavily influenced by personal values, shared beliefs and various pathologies of group dynamics. Group phenomena extensively studied by social psychologists draw on such concepts as group-think, obedience to authority, bystander apathy and confused incentive systems. There are limits to economic, accounting and legal remedies. This paper discusses ways to identify and overcome such group pathologies of high-level executive and board teams by such techniques as the embrace of internal dissent (eg devil's advocate).
