By Ken Tysiac
Many faulty business decisions can be traced to “confirmation bias” that leads people to unwittingly seek information that bolsters what they want to believe, says Brigham Young University accounting professor Doug Prawitt. “We don’t realize it when we do that, but it’s a very, very powerful human bias”. Prawitt is co-author of “Enhancing Board Oversight: Avoiding Judgment Traps and Biases”, a white paper on business judgment released Wednesday by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Their simple process seems obvious but is being well received and put into practice at both the board and leadership team levels:
- Define the problem and identify fundamental objectives.
- Consider alternatives.
- Gather and evaluate information.
- Reach a conclusion.
- Articulate and document rationale.
Click here for access to White Paper.