The ability to make decisions within the boardroom requires a mix of open discussion, strategic analysis and leveraging technology. These strategies, when executed correctly, can dramatically improve a board’s ability to make a decision and lead to the long-term viability of an company.
The first step is to collect all the information available and ensure that it is accurate, complete, credible and comprehensive. This is the management’s job and includes gathering data from both internal and external sources. It also involves conducting research and making sure that the board is provided with timely, comprehensive information.
Once the data has been gathered, the next stage is to determine the possible solutions to the problem. This can be a lengthy procedure, particularly when trying to reach a consensus. Some boards employ techniques like the Six Thinking Hats or Disney Planning Method to avoid groupthink and to encourage all possible options to be thought about.
The board will then have to decide on the best option to pursue. This typically involves a range of factors that include cost and impact. The scope of the project can also be measured by the number of people affected (e.g. clients additional reading about Financing Mergers or employees). It is useful to have a list of delegated authority that connects these criteria into the overall guidelines of the board for the organisation.
The board must state the reasons for its decision in the minutes. The minutes should contain the reasoning for the decision as well as a list of alternatives considered as well as any advice sought, and the criteria that were in place or not.