Alex Edmans, Professor of Finance at London Business School, is one of the leading voices in corporate finance and responsible business. He’s the author of May Contain Lies and Grow the Pie, and has written extensively on purpose, performance, and the evolving role of business in society. He also advises policymakers, boards, and asset managers around the world. In this episode, we discuss the importance of directors critically evaluating the data and narratives presented to them. Alex explores common cognitive traps—such as confirmation bias and black-and-white thinking—and underscores the value of diverse perspectives and a culture of constructive dissent in boardrooms. If you enjoy this episode, please consider subscribing, leaving a review, or sharing this podcast on social media. You can also support the podcast by subscribing to the Boardroom Governance Newsletter at evanepstein.substack.com. This podcast is sponsored by the American College of Governance Counsel.
(0:00) Intro
(1:37) About the podcast sponsor: The American College of Governance Counsel
(2:24) Start of interview
(3:10) Alex's origin story
(5:56) His advisory boards and other board positions. On the importance of the academic practitioner nexus.
(7:02) About his book May Contain Lies (2024)
(10:07) About confirmation bias, relevant to corporate directors.
(11:48) About black and white thinking (binary thinking).
(14:44) Dissent in the boardroom. How in the UK directors don't have "skin the game" (no equity compensation).
(21:59) On his "ladder of misinference": helps understand how misinformation can be perpetuated by misinterpreting the steps in a logical argument. The four key stages are: a statement is not fact, a fact is not data, data is not evidence, and evidence is not proof.
(27:27) On his book "Grow the Pie" and the shareholder and stakeholder debate.
(30:13) On the pushback against ESG in the US ("pushback is better than backlash"). His paper The End of ESG (2023)
(32:53) On the use and misuse of board diversity data. His paper: (Diversity) Equity and Inclusion (2023)
(40:34) On AI and the boardroom
(44:15) On Public Benefit Corporations (PBCs).
(49:23) The value of scientific research for boards
(50:27) Books that has greatly influenced his life:
(53:12) His mentors:
(54:25) Quotes that he thinks of often or lives his life by: "You can do everything you want to and be everything you want to be but not all at once" (Laurie Hodrick). "You don't know how many times you'll get to play in your life so if you do get the chance you've got to rock it big time" (Tony Mortimer, East 17)
(56:53) An unusual habit or an absurd thing that he loves: exercising daily.
(59:06) The living person he most admires: Stuart Pearce.
Alex Edmans is a Professor at London Business School, Fellow of the British Academy; and Fellow of the Academy of Social Sciences.