Collective Intelligence: The Value of the Crowd

In our recent publication, Dominance in the Boardroom, we explore the concept of collective intelligence, a term that is gaining traction in governance circles.

At its core, collective intelligence reflects a straightforward proposition. Groups tend to solve complex problems more effectively than individuals. Differing perspectives and ways of thinking help surface blind spots and strengthen outcomes.

Yet when it comes to boards and board composition, governance regulation tends to focus heavily on the individual. Attention is paid to credentials, experience, independence, and the absence of conflicts or close ties to the company. Far less emphasis is placed on how directors function as a group, or on their collective capacity to think, challenge, and solve problems together. Outside of periodic board evaluations, group dynamics are often treated as secondary.

The study of collective intelligence has expanded rapidly across psychology, sociology, and strategic management. Although there is no single agreed framework, most researchers would agree that collective Intelligence is about more than raw cognitive ability. In the boardroom, it is about how individual capabilities interact, how ideas are tested, and how judgment is formed through dialogue.

Board decisions are rarely based solely on facts. They are shaped by interpretation, perspective, values, and prior experience. Directors bring mental models that help them navigate uncertainty. But those same models can also constrain thinking. This matters because corporate law emphasizes how a “reasonable” director would respond to a given set of facts and circumstances.

Reasonableness, however, is a difficult standard to apply in isolation. Judgment is inherently subjective and context-specific. It is also bounded by what individuals know, believe, and value. No director sees the full picture alone.

This is where collective intelligence becomes critical. When board dynamics support openness and psychological safety, directors are more willing to share how they interpret information, assess risk, and weigh competing priorities. Through this process, the board can move beyond the limits of individual reasoning and arrive at more informed judgments.

This dynamic is sometimes described as the “many-eyes” principle. Individuals approach problems differently and often arrive at distinct conclusions. Research consistently shows that groups, when well-functioning, outperform even highly capable individuals on complex decision-making tasks. The benefit does not come from averaging opinions, but from constructive challenge and synthesis.

For this reason, evaluating director performance should extend beyond individual contribution in the narrow sense. A central consideration should be the extent to which a director strengthens or weakens the board’s collective intelligence. Without attention to group dynamics, concepts such as acting reasonably or in good faith lose much of their practical meaning.

The idea of collective intelligence also raises a broader question. Should it be confined to the boardroom, or can boards draw more systematically on their stakeholders' intelligence? In setting strategy, for example, has the board actively engaged with stakeholders to surface blind spots, test assumptions, and better understand emerging risks and opportunities?

This is not about consultation for its own sake, or about collecting opinions. The value lies in engaging stakeholders in the problem itself and inviting them to contribute to potential solutions. Historically, stakeholder management focused on identifying interests and biases. While useful, this approach often reinforces existing positions rather than generating new thinking.

A more productive shift is to turn to stakeholders to explore possible ways forward. This can feel uncomfortable. It may also raise concerns about expectations, particularly the risk that boards feel obliged to adopt the solutions proposed.

Boards must ultimately decide. But recent legal and governance developments (such as the Caremark Decision - a landmark Delaware court case that has reshaped public understanding of directors’ duties in the United States) underscore the expectation that directors rigorously test their understanding of a situation. That requires more than relying on one’s own perspective.

The lesson is clear. Effective governance demands that directors actively draw on the collective intelligence of their fellow board members and, where appropriate, the organization’s stakeholders. In a world of complexity and uncertainty, that is not an optional refinement. It is a core element of responsible board decision-making.

Dr. Charles Mario Abela

Director, Research and Thought Leadership, Center for Governance.



 

Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the opinion or position of the Center for Governance.