The ability to make decisions in the boardroom requires a mix of open discussion and strategic analysis as well as the use of technology. These strategies, when implemented properly, can significantly enhance a board’s ability to make a decision and lead to the long-term sustainability of an business.
The first step is collecting all information available and ensuring it is thorough, accurate reliable, relevant, and complete. Management’s responsibility involves gathering data from internal and external sources, conducting research, and making sure that the board is receiving current, comprehensive information.
Once the data has been gathered the next stage is to identify the possible options that could solve the issue. This is often a time-consuming process, especially when trying to reach a consensus. Some boards use methods like the Six Thinking Hats Method or Disney Planning Method in order to prevent groupthink and allow a full range to be taken into consideration.
Finally, the board must decide on the best option to consider. This is usually based on a range of elements, including cost, impact, and scope. Scope can also be measured by the number of affected people (e.g. clients or employees). It is important to have a framework that connects these criteria with the general governing principles that govern the company.
Once the decision is made the board must declare it in the minutes and explain the process by which it was reached. This will include a rationale for the decision along with a list of choices that were considered, any advice requested, and whether or not the criteria were in fact met.
