Andras Tilcsik and Juan Almandoz published an interesting article in the Rotman Business School's management magazine this year titled, "When Expertise Becomes a Liability." They studied over 1,300 banks during the 1996-2012 time period. 124 of those banks failed (slightly less than 10%). In conditions of decision uncertainty, having more domain experts on the board of the bank meant a higher probability of failure. They argue that having some domain experts is important and essential, but there can be too much of a good thing. Having a few people with expertise in other domains can be quite beneficial.
Why the liability of expertise? They argue that a high proportion of domain experts on a board leads to three problems. First, domain experts can be very entrenched in their views, and they may be unwilling to look at issues in new ways as the environment changes. Second, domain experts may exhibit high degrees of overconfidence in terms of their ability to make projections and forecasts. Finally, a high proportion of domain experts might be associated with a lack of constructive conflict and debate within the board. Why? Non-experts may be unwilling to challenge conventional wisdom, ask tough questions, or offer dissenting views if they are greatly outnumbered by domain experts on the board.