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 the ability of a board to make decisions, and lead to the long-term sustainability of an company.
The first step is acquiring all information that is available and ensuring that it is complete, accurate pertinent, reliable, and complete. This is the management’s job and includes gathering data from both internal and external sources. It also includes conducting research and ensuring that the board receives timely and complete information.
After the data has been gathered the next step is to find the potential options to solve the problem. This is often a time-consuming procedure, particularly 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 all options to be considered.
The board must decide which option to take. This usually involves a variety of factors, including cost and impact. Scope can also be determined by the number of affected individuals (e.g. employees or clients). It is useful to have a framework that connects these requirements with the general principles of governance for the company.
The board must state the reasoning behind its decision in the minutes. The minutes should contain the reasoning for the decision and a list of possible options, any advice sought and what criteria were met or not.