8.1 Introduction

The task of directors, members of the Supervisory Board (SB) and judges is complex. They are faced with substantive (legal) challenges but, just like everyone else, they must also deal with cognitive factors which influence judgment and decision-making. In this dissertation I have discussed the impact of biases. The main question was if, and if yes, in what way biases influence decisions and judgments? I define biases as undesirable systematic influences in judgment and decision-making arising from the human mind (consisting of the conscious and unconscious) which are, however, not always recognised as such because one is usually not aware of these influences. The common theme in this dissertation is mental deception. I define mental deception as deception of our judgment and decision-making as a result of unconscious mental processes through which we are misled by ourselves rather than by something or someone else. In each chapter I have linked mental deception to a specific subtopic (the performance of duties by the BoD and SB; gender diversity at the top; judicial decisions and the business judgment rule (BJR)). The subtopics all have a connection to the boardroom and/or the court in chambers.

Directors, members of the SB and judges are professional decision-makers. Professional decision-makers are individuals who in their professional work are faced daily with the task of making decisions which can potentially have a large influence on the surroundings in which they operate: the corporation, society, and the judicial system. By gathering, analysing, systematising and applying many studies from several scientific disciplines, I have identified how biases can influence judgment and decision-making by directors, members of the SB and judges, and what the implications are. The impact of biases can be reduced by applying the mitigation techniques that I have suggested in each chapter. This will increase the quality of judgment and decision-making by directors, members of the SB and judges.

From a legal perspective, the response may well be: more legislation to influence judgment and decision-making by directors, members of the SB and judges. When considering this response, one should realise that a variety of human factors is involved, which are largely beyond the control of rule-makers. This response is primarily motivated by the desire to control ‘everything’, as seen after the economic crisis. This has led to the call for more rules1 to enforce proper corporate governance. To a large extent, judgment and decision-making and, more generally, culture, behaviour and corporate governance are essentially aspects that are never fully controllable. They cannot be ‘fixed’ or completely managed (simply) through legislation. More insight into the workings of biases will, however, contribute towards a greater knowledge of these biases in practice, and there are several other mitigation techniques that can lead to a reduction of biases, as elaborated in each chapter.