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Bad Apples and Board Size

April-May 2007

In February of this year the University of Washington published in the journal Research in Organizational Behavior the results of a study on the relationship between group size, its performance, and the group's ability to deal with the question of what they termed "bad apples." Bad apples are non-performers or those who have group interactive patterns that are dysfunctional (attitudes, character, or behavior). No surprise, they discovered that bad apples degrade the effectiveness of the entire group. And if the person has tenure or power the group is much less likely to deal with the problem and falls into one of two dysfunctional responses, rejection or defensiveness (denial).

But what was discovered was that small groups coped with this problem more effectively than larger groups. Small groups are more likely to confront such an individual or remove him or her than is a large group.

This adds to the arguments for small boards. We know from the data that boards are downsizing. The reasons are adding up. Besides dealing better with bad apples, reasons include, 2.) Better decision-making. A study on group decision-making mentioned in Harvard Business Journal late last year discovered that the peak in the quality of decision across a range of group sizes was between five and six. The bigger the group got above six, the poorer the quality of decision making. 3.) The ability to facilitate effectively the group's dynamic is much easier for a chairperson with small boards. 4.) Members of small groups more successfully hold each other accountable and the sense of accountability is greater (which relates to the first point). 5.) In my experience, small boards come to know their own mind better, and consequently, 6.) are able to stand firm when the board must insist on performance from the CEO. When the board must confront the CEO about an issue, the small board is better at it.

This does not mean I'm categorically recommending boards of five or six necessarily, but the further you get above that size, the more performance is likely to degrade, and the cost-value tradeoff must be considered carefully. One tradeoff to consider is the balance between homogeneity and diversity. Homogeneity, under some circumstances improves decision-making, and diversity does under other circumstances. By the way, with small boards, the attention to quality is critical, and the board is generally more aware of that fact. Even a change in one member changes the group dynamics.

Dick Biery, The BroadBaker Group

Kansas City