Independent judgement – its key role in the boardroom

Sir Andrew Likierman, Professor of Management Practice in Accounting at London Business School (LBS) recently shared insights from his latest book ‘Judgement at Work: Making Better Choices’ with senior governance professionals at the Chartered Governance Institute UK & Ireland’s annual lecture in London. The event, which was hosted by the LBS Leadership Institute, saw Professor Likierman outline why independent judgement in the boardroom is so essential and offer a blueprint for achieving it.

He defined judgement as the ability to combine personal qualities (such as intelligence, perceptiveness and insight) with relevant knowledge and experience to form opinions and take decisions. He set out the six elements of judgement: Knowledge and experience; awareness; trust; feelings and beliefs; choice; and delivery (for decisions). He stressed that judgement is a process, is context-specific, can be learned and improved. He suggested that using it would increase the chances of getting what you want when making difficult choices. He pointed out that exercising good judgement can be far less painful than learning by making mistakes.

Judgement is required for all key choices such as hires, strategy and major projects, not to mention day-by-day matters such as control and risk management. It is particularly significant in the Boardroom, where directors in many countries are required to exercise “independent judgment”. Professor Likierman quoted from a booklet he had published about how to identify what independent judgment meant in practice.

Looking at the role of judgement in a world of AI, Professor Likierman identified it as one of the things that sets humans apart from machines. While machines can help humans to exercise judgement (and they need humans to program, train and monitor data, and interpret results) they don’t exercise it. Judgement will therefore be even more important than ever as AI takes over many aspects of what humans currently do.