Effective Board Management Decision Making

To make the right decisions, boards require various sources of information. This includes qualitative information (e.g., the impact that a decision might have on the culture of the company or on the stakeholders it could affect) as well as quantitative information (e.g. legal due diligence or a return on investment analysis). It is management’s responsibility to ensure that appropriate people are gathering strategically analyzing and putting together the information for board decision-making.

It is also crucial for the board to have a clear knowledge of what the company is currently doing in order to make informed decisions on strategic issues. This will enable board members understand the dangers and opportunities that are present in the future of the business. This can be accomplished by using an internal board performance monitoring system or by conducting a post-completion evaluation of major initiatives and projects.

It is vital that when making a strategic decision the board is aware of its own limitations. It must be prepared to delegate some decisions to its committees. This is particularly crucial for issues like conflicts of interest, community benefit evaluation of CEOs and executive compensation.

The board must also be ready to stand in a state of uncertainty. This will allow the board’s collective wisdom as well as expertise to be utilized while remaining active and patient instead of reacting. There are a myriad of ways to get this done, such as asking management to develop an impression or “mental model” about the decision being presented or a red/blue team process, using an external panel of experts with different https://boardmeetingtool.net/leading-software-to-improve-board-management-decision-making/ perspectives or dedicating time in retreat to discuss a difficult issue.