The ability to make decisions in the boardroom requires a combination of open discussion and strategic analysis, as well as leveraging technology. These strategies, when implemented correctly, can dramatically improve the ability of boards to make decisions and contribute to the long-term viability of an company.
The first step is to gather all the information available and verify that it is accurate, complete, credible and thorough. This is the management’s job and includes collecting data from both internal and external sources. It also includes conducting research and making sure that the board is provided with timely, complete information.
After the data has been gathered The next step is to consider the possible solutions that could resolve the issue. This can be a long process, particularly when trying to come to a consensus. Some boards employ techniques like the Six Thinking Hats or Disney Planning Method to stop the formation of groups and to promote all possible options to be taken into consideration.
The board has to then decide on the best option to take. This typically involves a number of factors, including cost and impact. Scope can be measured by the number of affected individuals (e.g. employees or clients). It is useful to have a matrix that connects these criteria with the overall governing principles for the company.
The board should explain how it reached its decision in the minutes. This should include the reason for the decision and a list of possible options or any advice sought, as well as the criteria that were met or not met.