The ability to make decisions within the boardroom requires a combination of open discussion and strategic analysis as well as the use of technology. These strategies, when implemented effectively, can greatly enhance the board’s ability to make a decision and lead to the long-term viability of an company.
The first step is to gather all available information and making sure that it is in-depth, accurate, credible, relevant and complete. This is the management’s responsibility and involves gathering information from both internal as well as external sources. It also involves conducting research and making sure that the board is provided with timely, comprehensive information.
After the data has been gathered The next step is identifying the options that might be able to resolve the issue. This can be a lengthy process, particularly when trying to reach a consensus. Some boards employ methods such as the Six Thinking Hats Method or Disney Planning Method in order to prevent groupthink and allow a full range to be taken into consideration.
The board must then decide on the best option to pursue. This typically involves a number of factors such as cost and the impact. Scope can be measured in terms of years, dollars or the number of people impacted (e.g. clients, customers or employees). It is helpful to have a list of delegated power that ties these requirements to the general guidelines for governance of the board for the organisation.
Once the decision is made the board must clearly document the decision in the minutes and describe how the decision was made. This will include the rationale for the decision, a list of the options considered as well as any advice sought, and the criteria that were satisfied or not met.
