The ability to make decisions in the boardroom requires a mix of open discussion and strategic analysis, as well as leveraging technology. When executed correctly, these strategies can dramatically improve a board’s decision-making capability and ensure long-term sustainability for the organization.
The first step is gathering all the information available and ensure that it’s 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 is receiving current, comprehensive information.
After the data is collected The next step is to consider the options that might be able to solve the problem. This is often a time-consuming process, particularly when trying to reach consensus. Some boards employ techniques such as the Six Thinking Hats or Disney Planning Method to avoid groupthink and to encourage a full range of alternatives to be thought about.
Finally, the board must decide on the best option to pursue. This is usually based on a range of factors that include cost and impact. Scope can be measured by the number of affected people (e.g. employees you can check here or clients). It is useful to have a matrix that connects these requirements with the general principles of governance for the organization.
The board should explain how it reached its decision in the minutes. This will include a rationale for the decision along with a list of options that were considered, any advice requested, and whether or not the requirements were satisfied.
