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Do you apply the Veil of Ignorance in business?

Broadly speaking, leaderships teams bring to the decision-making table not only a collection of business skills but also a unique set of personal views, informed by each member’s circumstances, including the tribes they belong to. 

Of course, each member has a range of legal and fiduciary duties to the business. This includes the duty to act in its best interests and the duty exercise powers for proper purpose.

In this context, it’s possible that someone’s personal views might put them in conflict with their duties to their company. This is where a decision-making method, known as the ‘Veil of Ignorance’, could prove useful.

What is the Veil of Ignorance method?

In the 1970s, American philosopher John Rawls developed what is now known as the Veil of Ignorance to help politicians make objective moral decisions by eliminating biases from the decision-making processes.

The method requires people with the power to affect the distribution of benefits (rights, positions and resources) in society to imagine they know nothing about their own particular talents, abilities, tastes, class position or social status. In applying this Veil of Ignorance, a person is prevented from letting their personal considerations impede the just distribution of benefits.

How does the Veil of Ignorance work?

Let’s take the example of a society in which 50% of the population lives below the poverty line. By applying the Veil of Ignorance, the decision-maker adopts the mindset that he or she – regardless of their real-life circumstances – is equally likely to be living below the poverty line as to not be. The idea is that the decision maker is putting themselves in a position to make decisions free of self-interest or class bias.

How could it work in a business context?

Recently, marriage equality has been a very topical issue in Australia, with several organisations coming out in support of it as well as those that have opposed it. This made me wonder whether any leadership teams, in determining their organisation’s position on marriage equality, applied the Veil of Ignorance. If they had, this is the sort of question they might have asked themselves idividually and as a collective: “Removing my sexuality, religious beliefs, personal interests and group-interests from the equation, If I did not know whether my child, relative, friend or a staff member was straight or gay, would I support marriage equality?”

Easy to say but hard to implement, the Veil of Ignorance is a concept worth considering especially in situations where the decisions being considered are highly emotive or have personal ramifications.  So, at your next leadership meeting when there is a highly emotive issue, explain the Veil of Ignorance to your team and, as a collective, try applying it. You might just find it reduces the tension as individuals can rationalise their decision better and feel more comfortable with their own decision and the decision of the collective, unified leadership group.

About the author

Stephen Barnes is the principal of management consultancy Byronvale Advisors.  He has over 20 years advising clients from new business start-ups to publicly listed companies and across a wide array of industries.  He prides himself on quickly understanding the client’s business and issues, and synthesising problems to develop pragmatic solutions.  He is also the author of ‘Run Your Business Better’.  To find out how Stephen can help you run your business better visit www.byronvaleadvisors.com.