The ability to make decisions within the boardroom requires a mix of open discussion and strategic analysis, as well as leveraging technology. If executed properly these strategies can elevate a board’s decision making capability and ensure long-term sustainability for the organization.
The first step is acquiring all available information and making sure that it is accurate, in-depth trustworthy, relevant, and complete. This is the responsibility of management and includes collecting information from both internal as well as external sources. It also involves conducting research and ensuring that the board receives timely, comprehensive information.
After the data has been gathered, the next step is to identify the possible solutions to the problem. This can be a lengthy process, especially when trying to reach a consensus. Some boards use methods such as the Six Thinking Hats or Disney Planning Method to prevent groupthink and to allow all possible options to be taken into consideration.
The board then has to decide which option to pursue. This is usually based on a range of factors such as cost and impact. Scope can also be measured by the number of affected individuals (e.g. clients or employees). It is beneficial to have a framework that connects these requirements with the general governing principles that govern the organization.
The board has to explain the reasons for its decision in the minutes. The minutes should include a reason for the choice along with a list of choices that were considered, any advice requested, and whether or not the criteria were satisfied.