Leadership Blind Spots in Major Decisions: A Practical Guide

Every major decision that goes badly wrong at board or ExCo level shares a common feature: something obvious was invisible to the people making the call. Not obscure, not technical, obvious. The chair could see it afterwards. The regulator saw it. Middle management saw it. The people at the top did not. This guide sets out the specific blind spots that repeatedly distort major decisions in banks, insurers and asset managers, and what to actually do about them.

Key Executive Takeaways

• Leadership blind spots are structural, not personal: they arise from how information reaches the top, who is in the room, and what gets rewarded, not from individual weakness.
• The most damaging blind spots in financial services decisions are unstated assumptions about customer behaviour, regulator posture, and internal capability, none of which show up in the board pack.
• Countermeasures work only when built into the decision process itself: pre mortems, dissent roles, and external challenge scheduled before the vote, not after.

Where blind spots actually come from

Blind spots at senior level are rarely about intelligence or experience. They come from three sources. First, filtered information: by the time a proposal reaches the board, it has been through six drafts and every uncomfortable fact has been softened or removed. Second, social cost: the person who says the deal is a bad idea pays a price, the person who nods does not. Third, pattern matching: senior leaders reason from what worked before, and financial services rewards this until the moment it does not.

If you want to see your own blind spots, start with the last three major decisions your firm made. For each, ask what was in the paper, what was said in the room, and what turned out to matter. The gap between the second and third is your blind spot pattern.

The blind spots that keep recurring

Customer behaviour under stress. Decisions about pricing, product design and remediation routinely assume customers will behave as they did in benign conditions. They do not. Consumer Duty has raised the cost of getting this wrong, but the decision papers still rarely model behaviour in adverse scenarios.

Regulator posture, not regulator rules. Executives read the rulebook and miss the signal. What matters is how the supervisor is currently thinking, what they are worried about this quarter, and what other firms are being asked. This is intelligence work, and most firms do not do it systematically before major decisions.

Internal delivery capability. Strategy assumes the operating model can execute. It often cannot. The people who know this sit two or three layers below the ExCo and are not asked. When they are asked, they hedge.

The stakeholder you have not spoken to. Every failed acquisition, product launch or restructuring has one: a stakeholder group whose view was assumed rather than tested. Sometimes it is a regulator, sometimes a large distributor, sometimes a segment of the workforce whose cooperation the plan quietly depends on.

Reputational tail risk. Boards discuss financial downside carefully and reputational downside vaguely. The vague discussion is where the career ending events sit.

What to build into the decision process

For any decision above a materiality threshold you set, require four things before the vote.

One, a written pre mortem. Assume the decision failed badly two years from now. What is the story? Circulate before the meeting, not during.

Two, an assigned dissent role. Not devil's advocate as a tone, a named individual whose job is to make the strongest case against. Rotate it. Protect them from consequence.

Three, external challenge on the two or three assumptions the decision most depends on. This is where independent stakeholder intelligence earns its fee: testing what customers, regulators or counterparties actually think, not what the deck assumes.

Four, a written record of what would cause you to reverse the decision. If you cannot name the trigger, you will not act on it when it arrives.

What good looks like

Good decision hygiene is boring. Papers arrive early. Dissent is expected and unpunished. Assumptions are labelled as such. External views are gathered before, not after. The chair asks who has not spoken. The minutes record what was decided against, not just what was decided.

The next major decision on your agenda is the test. Before it comes to the vote, ask which of the blind spots above applies, and what specifically you have done to close it. If the answer is nothing, delay the vote.

Frequently Asked Questions

How do we know if we have a blind spot problem rather than just bad luck?

Look for pattern. If post mortems on failed decisions repeatedly identify factors that were knowable at the time, you have a process problem, not a luck problem.

Is a pre mortem really different from a risk section in the board paper?

Yes. A risk section lists risks the sponsor is comfortable disclosing. A pre mortem forces the group to imagine failure and reason backwards. It surfaces what the sponsor left out.

Who should own the dissent role?

A senior person with standing, rotated across decisions. Not the general counsel by default, and not the most junior NED. The role needs authority to be useful.

How much external challenge is proportionate?

Scale it to reversibility. Decisions you can unwind cheaply need less. Decisions that commit capital, reputation or licence need independent testing of the two or three assumptions that most drive the outcome.

What if the CEO is the blind spot?

Then the chair owns the countermeasures. This is one of the specific reasons the role exists.