The ability to make decisions in the boardroom requires a combination of open discussion with strategic analysis and the use of technology. If done correctly these strategies can significantly increase a board’s decision-making capacity and create long-term sustainability of the company.
The first step is to collect all the available information and make sure it is reliable, complete, accurate and comprehensive. This is management’s responsibility and involves gathering data from internal and external sources, conducting research, and ensuring that the board receives accurate, timely information.
Once the information has been gathered, the next stage is to find the potential options that could solve the problem. This can be a lengthy process, especially when trying to reach a consensus. Some boards employ techniques like the Six Thinking Hats Method or Disney Planning Method in order to avoid groupthink and promote the full range of options to be considered.
The board has to decide on the best option to explore. This typically involves a range of factors that include cost and impact. Scope can be measured in terms of years, dollars or the number of people impacted (e.g., clients or staff). It is important to have a matrix that connects these criteria with the overall governing principles for the organization.
When the decision has been made the board must clearly declare the decision in its minutes and describe how it was made. This will include the reasons for the decision, a list of the alternatives considered or any advice sought, as well as what criteria were satisfied or not met.