A review of decision making literature from UCL on what makes for good decisions in committees is particularly relevant for investment committees:
1. Diversity of participants (functional diversity) with different independent expertise or knowledge makes optimal decision making more likely (finding global rather than local maxima more likely with different starting points for the mathematical optimisation geeks)
2. Slower decision making is more accurate. (And conversely sometimes you need to trade speed for accuracy).
3. Don’t vote, prefer discussion. Getting to a consensus answer or leave it to an expert final choice, if you do vote it needs to expertise weighted (ie some votes count more than others) based on objective expertise measurement, not one man one vote.
4. Over confidence bias: The worse you are at something the more delusional you are that you know the right answer! More expertise often results in less certainty from expert individuals: the problem is they know how much they don’t know and they can take other less expert people’s opinion into account too much. Go with the experts opinion after having the discussion and as the expert balance your opinion carefully with the input from others.
Podcast: The Naked Scientist