The Better Boards Podcast Series
The Better Boards podcast series is the podcast for Chairs, CEOs, Non-Executive Directors, Company Secretaries, and their advisors.
Every episode is filled with practical insights and learnings from those inside the boardrooms. We tease out what really matters and highlight actionable steps you can take to enhance the performance of your board.
The Better Boards Podcast Series
Overcoming misconceptions and lies in the boardroom
When pressure mounts, boards often default to easy narratives. But Professor Alex Edmonds, finance professor at London Business School, argues that now is the time to double down on dissent and critical thinking.
In this timely episode, Alex challenges common assumptions around ESG and DEI. Drawing on academic research and real boardroom experience, he urges directors to look beyond the surface—and beyond what they want to be true.
“Rather than making broad claims as to whether sustainability works or doesn't, what I try to do is be more granular and look at the specific sustainability dimensions that pay off.”
The episode explores confirmation bias, the misuse of data, and how well-intentioned directors can still fall into intellectual traps. Alex shares practical tactics for chairs to foster dissent, such as holding back opinions to let others speak freely.
“If you see a study that you really want to be true… ask yourself what if the study found the opposite? How would I take it apart?”
The message is clear: dissent isn’t dysfunction—it’s discipline. And in today’s complex world, boards need more of it.
“It’s simple but not easy. We know where we want to get to—but putting it into practice is challenging.”
Three Takeaways:
- Academic research is a critical resource.
- Challenge what you want to believe.
- Reward dissent.
Boards that confront complexity won’t just survive—they’ll lead.
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To find out how you can participate in the Better Boards Podcast Series or for more information on Better Boards’ solutions, please email us at info@better-boards.com.
Overcoming misconceptions and lies in the boardroom. Welcome to the BetterBots podcast series, the podcast for chairs, CEOs, non-executive directors, company secretaries, and their advisors. Every episode is filled with practical insights and learnings from those inside boardrooms. We discuss what really matters and highlight actionable steps you can take to enhance the performance of your board. In this episode, I'm delighted to talk with Professor Alex Edmonds. Alex is professor of finance at London Business School. He has a long track record in having served on the world's leading business schools. He has given TED talks, written numerous books. He is a non-executive director and an advisor to large institutions like, for example, the Morgan Stanley Institute for Sustainable Investing. Now, Alex dares to have controversial views. Yes, Alex is an academic, but he also promotes to look behind the surface and I think in times like this this is so so crucial what we are seeing is of course there is a lot going on in the external world and around every boardroom and this is then a time when people I think try to find comfort in an easy route and nobody wants to add to the pressure of maybe someone else or cause additional stress but the uncomfortable truth is it's a time when descent is more important in order to look at an issue from all perspectives, in order to make sure that we really knock the tires before making a decision that takes us forward. So I'm really delighted about this episode. I think it's crucial in times like this. Alex, thank you so much for contributing to the Better Bots podcast series. It's fantastic to have you.
SPEAKER_01:It's great to be here, Sabine. Thank you so much for inviting me.
SPEAKER_00:Alex, I follow you on LinkedIn and your posts are really most interesting. It's not what you typically tend to hear, which is why we invited you and I'm glad that you accepted. What are, in your view, some of the most common traps boards fall into?
SPEAKER_01:So I think it's not recognising the nuances on sustainability issues. So we often think that sustainability always pays off. Every measure of sustainability pays off as well. And so the goal is to just do it. Don't talk about it. Just do it. Push out foot on the accelerator pedal as far as possible. But what I'm trying to highlight is that the evidence for sustainability working is actually not as unambiguous as people think. And this is not to be a sustainability deterrent. I'm absolutely pro-sustainability, but by looking at the evidence on what does work and what does not work, then we make sure that we're pushing on the right level. So as an example, some of my potentially controversial posts on LinkedIn will be about the link between demographic diversity and financial performance. And what I highlight is that some popular studies by the likes of McKinsey, which claim that there's an unambiguous benefit of demographic diversity, Actually, the evidence is much shakier than that. And this is absolutely not to be an opponent of DEI, but to highlight that actually when you want to look at DEI, we don't just focus on demographic diversity. We want to look at cognitive diversity and also incorporate equity and inclusion. And when you do that, you do have a positive link. So what I'm highlighting is the importance to be more holistic when we think about issues such as DEI.
SPEAKER_00:And you made a similar point actually on sustainability.
UNKNOWN:Yes.
SPEAKER_01:That's right. So we often have this debate as to does sustainability pay off? But I think that that is the wrong question because sustainability comprises lots of different things. So it could consider environmental issues. And within environmental issues, there could be water or climate change or biodiversity. There could be social issues. And sometimes these conflict with each other, for example, to shut down all coal-fired power stations is good for the environment, but it's bad for workers. So rather than making broad claims as to whether sustainability works or doesn't, what What I try to do is be more granular and look at the specific sustainability dimensions that pay off. So some, like employee satisfaction and corporate culture, they are linked to long-term returns, and others, such as environmental issues, are not. Now, I wish they were, but the problem is that they are externalities. They're issues that a company can get away with without actually suffering in terms of its long-term effect. So I view this as similar to food. Nobody would ask, is food good for you? Some food is good for you. Broccoli and other food like ice cream is bad. And the goal is rather than being blunderbuss and blanket about it, is to highlight what foods are good and what foods are bad. And similarly, that is my approach to sustainability.
SPEAKER_00:So how come that really accomplished, intelligent people don't look behind this and they fall into these traps?
SPEAKER_01:I think the reason is these people are very well-meaning, so they're not trying to be misled or to mislead others. They have good intentions. But if we have confirmation bias, we like to believe studies that we want to be true. So it is tempting to believe that all forms of sustainability pay off because then we don't need to look at the nuances and distinguish between different sustainability issues. And it's also tempting to think that demographic diversity pays off because it's much easier to evaluate demographic diversity than it is to evaluate cognitive diversity. And also, we might think there's a moral-ish lens behind this. We might think morally and ethically, women are underrepresented, ethnic minorities are underrepresented. And therefore, if we believe that what is moral is also good for business, then that is something which is comforting. Now, even if one saw no link between demographic diversity and financial performance, you could still legitimately pursue this on moral grounds. All I'm highlighting is the evidence for financial performance is not as strong. That doesn't take away at all from the moral argument which people are absolutely entitled to instead be pursuing.
SPEAKER_00:So what can we do? How can we help boards who are always under time pressure? And particularly at the moment, there are so many issues they have to deal with. How can boards, board members spot these traps early on and avoid them and really get to the bottom of the issues?
SPEAKER_01:It is to think critically. And so this is why I wrote my recent book, May Contain Lies, is to allow busy people who don't have PhDs in statistics, who don't have the time to look up every reference and to dot every I and cross every T, to think about how to know what to trust and what not to. So in particular, if there is a study, just to think about Are there alternative explanations for that result? So if a study found that sustainability improves financial performance, what might the alternative explanations be? It could be that it's an industry effect. Maybe more sustainable industries like tech have just had tailwinds, whereas fossil fuels may have headwinds. Maybe there's other factors like a great CEO. She both improves sustainability and and she also improves financial performance, but there is not a direct link between the two. One simple tip that I have to avoid confirmation bias is if you see a study that you really want to be true and you would really love to share it on LinkedIn and share it with your other board members, ask yourself, what if the study found the opposite result? How would I take it apart? So if a study found sustainability is linked to worse financial performance, you don't like that. You want to argue against that. And you might appeal to industries. You might say, well, perhaps this is because the fossil fuel industry has done well because of Trump. It's got nothing to do with sustainability. Now that we've highlighted that industry might be an alternative to exhalation, ask ourselves whether industry can explain the positive link So we want to make sure that we are just discerning as something we don't like, as something we do. And the idea of imagine the opposite is to awake the discernment that we already have within us. And while as a board leader, you might think, well, this is all complicated that I need to be discerning about evidence. This makes your lives easier. Why? Because there's so many issues that you have to deal with as a director, as you're mentioning, Zabina. If indeed I know what issues are material, And what issues are less material that actually does make my life easier than having the impression that every single sustainability issue is financially material. So I need to track 250 KPIs.
SPEAKER_00:So how can chairs, Alex, really promote critical thinking on their board? What can they do?
SPEAKER_01:It is to actively seek dissent, to reward it, and to be wary of the fact that you as a chair, due to the respect that you command, you might unintentionally reduce dissenting opinions. So one example will be as a chair ensuring that you don't give your opinion at the start of a topic, to ask people for their thoughts first rather than ensuring that they anchor on your view. And this happened to me recently on a board that I'm on. I'm not the chair, but I received an email from an external person called Bruce with a proposal. I read the proposal. I didn't think it was workable, but I thought, well, let me send it to the rest of the board to get their views. So I said, dear board, here is a proposal from Bruce. I don't think that it's workable for these reasons, but please read it with an open mind and let me know if you disagree. However, before I click send, I realized that they would not be reading it with an open mind. Why? Because they would have seen my preamble, which made it clear that I didn't agree, before reading the proposal. So before I clicked send, I then reordered my email and I said, here is Bruce's proposal. Read it. My thoughts are at the end. And then Stefan, who's also on the board, wrote back to me and he said, Alex, I agree with all the concerns you raised after the proposal. But reading between the lines, actually, Bruce might be amenable to something else. Why don't you counter-propose that? And I did, and he accepted. And so why was that so important? It's because had I primed Stefan to thinking the proposal was bad, he would have probably read it quite superficially, knowing that Alex has already evaluated it, but he was able to read it with a fresh mind without me priming him. So that's an example of trying to allow time and space for different viewpoints. But another thing to do is to actively reward or actively acknowledge different viewpoints, if somebody disagrees, to really highlight how much you value this. Sometimes it may well be that if the decision still goes ahead, despite the objection, you might go to that person and say, I want you to know that even though we still press ahead with the decision, we value your concerns and we will bear them in mind when we execute the decision. Because if you didn't do that, the person who raised the objection would might think, I prolonged the meeting by 15 minutes or half an hour to raise my objection, and it made no difference anyway, and it probably upset the people who were in favour of the proposal. Next time I will self-centre. So the idea of explicitly acknowledging the value of a different perspective is something which I think is really useful.
SPEAKER_00:Alex, this sounds so simple in theory, but when I see that external times are getting tough, the tougher it becomes externally, with all sorts economically, politically, socially, the more boards avoid dissent, the more boards try to align around, try to go down the easy route. What can be really done? And still, it is now so, so important to stay competitive, to remain at the edge of things, to allow this descent in boardrooms. But it's so tough to really implement it.
SPEAKER_01:I think there's a couple of things. Number one, when the stakes are really high, which is tough times, I think that's when we really do want different viewpoints. So it's not, it's a luxury to have different viewpoints when times are good. Actually, it's a necessity to have different viewpoints when times are difficult to make sure that you're facing the crisis with the best possible information. And indeed, there are issues that happen during crises which might otherwise have been avoided. Let's say the collapse of Silicon Valley Bank when interest rates rose. This is something which may well have been addressed had there been a greater variety of opinions and greater knowledge of the risks that would happen if interest rates changed. I think another thing to note is that even though it is tempting to default to the status quo, as a board, you want to be different from your competition. And if you are going to have a competitive edge in a world in which it's difficult to encourage dissent, why? Because people on boards are successful. They don't like to be told that they're wrong or they've missed a viewpoint. actually can you be quite different by running the board in a different way, which is truly encouraging of different viewpoints. Yes, every company says we value a diversity of opinion, but when the rubber hits the road, how many of them actually act in that way? Probably a minority, a significant minority.
SPEAKER_00:Yeah, you know, I just come back from a board observation from the continent. And yeah, it's so far away sometimes what you see And what we are discussing in the podcast that I'm thinking, gosh, how can it be done? How do we get the message across to our listeners to really live also, to take what we discuss here in the podcast, to make it happen in their own boardrooms?
SPEAKER_01:Absolutely. And these are things which just make sense in theory. So I've just done a report on diversity and inclusion for the Diversity Project, which is a consortium of asset managers to promote diversity, not just demographic, but also cognitive diversity in asset management. And this will be launched in the House of Lords on the 11th of June. And if you were to read the report, nothing in it might seem earth shattering, which is we need to be intentional about different opinions. We want to have a diversity of perspectives. But one way that a director of an advisor to the diversity project described it is it's simple, but not easy. And I love that description, is that we know where to get to, but actually putting it into practice is challenging. It's like healthy living is simple, not easy. I want to abstain from alcohol or cut down on desserts and exercise, but actually putting it into practice is difficult. So even if the message is might seem simple, just to reinforce them, reinforce what to do and how important it is to get there, I don't think you can ever graduate from, I don't think you ever need to. need to be embarrassed by repeating things which are simple, but still not yet done.
SPEAKER_00:Fantastic. Alex, this is so, so helpful. And this whole discussion is a great reminder. Maybe our listeners want to even listen to this podcast episode several times to really get the inspiration and make it happen in their own boardrooms. At the end, we always ask, Alex, what are the three things our listeners should take away from this podcast?
SPEAKER_01:I'd say number one is the importance of academic research. Now, you might say, I would say that because I'm an academic, I'm talking my own book. But this is to highlight that academic research is much more relevant to practitioners than you might think. We often think, oh, there's academics here and practitioners here, and never the twain shall meet. But academics and practitioners work on the same issue. So business school professors look, what really drives performance within business? But what we have have is the time and the space. We have maybe five years to work on a project rather than a practitioner study might be six months. And that really allows us to nail down causation, not just correlation, highlight which factors really matter and disentangle different things which might be conflated. So I do think academic research does matter for practical board members. The number two is the importance of critical thinking to question what you really want to be true. You might think, well, if I'm a true believer in DEI and sustainability, I shouldn't be questioning because that suggests that I'm not truly committed to the cause. If it is that I'm a believer, I don't necessarily want to be a doubting Thomas and always ask for the evidence. But no, this is not an issue. of ideology. This is an issue of what makes companies more effective. And I do want to look at the evidence for what drives company effectiveness. Actually, do I have the confidence in this cause that I am willing to look at the evidence? I'm willing to hear the other side because I know that I think that even if there is something which is going to be informing, which is different, I'm willing to hear this because I'm confident in my view. And the third and final point is to encourage dissent within other people. So again, what a confident chair will do is to realize that I don't have all the answers. I'm not necessarily the smartest person in the room. I would like people to disagree with me. So this is to give them time and space to do that. Be that them speaking first in the meeting or putting your opinion at the bottom of an email that you're forwarding or actively going out and rewarding people. This could be just through a verbal acknowledgement. if these are people who've disagreed with you. One example might be Tom Garrity. He was the former dean of Wharton where I was first professor, but he was the CEO of a company, Index. And what he did is he hired a consultant to come in and tell him in front of his entire company in a town hall all the things that he was doing wrong and could be doing better. Now, that's admittedly extreme, and I'm not suggesting every company do that. But why I think that was so powerful is that he highlighted that I might be the CEO of this company, but this does not mean that I'm infallible. If you were to highlight my fallibilities, you're improving the performance of this firm.
SPEAKER_00:Fantastic, Alex. A very important podcast. Thank you so, so much for contributing to the BetterBots podcast series.
SPEAKER_01:And thank you so much for giving me this platform. I mean, I really appreciate when practitioners are interested in my views.
SPEAKER_00:Well, thank you for listening to this episode. As you know, behind this podcast are real people. So please do get in touch. We are always delighted to hear from you. If you have an idea for an episode, if you would like to hear more about the work we do with sports, reach out. You can do so on our website. You can write us an email. You can even book a time. You can freely see my calendar and set up a Teams call. Once again, thank you for listening and maybe we meet in person.
