To make the right decisions in a boardroom, you need a combination open discussion, strategic analysis and technology. If executed properly these strategies can significantly improve a board’s decision-making capacity and result in long-term sustainability for the company.
The first step is to collect all the available information and ensure that it is authentic, complete, reliable and comprehensive. This is the management’s responsibility and involves gathering data from both internal and external sources. It also involves conducting research and ensuring that the board is provided with timely, complete information.
After the data is gathered, the next stage is to identify the possible options to solve the problem. This can be a long process, especially when trying to come to a consensus. Some boards employ techniques like the Six Thinking Hats or Disney Planning Method to prevent the formation of groups and to promote a full range of alternatives to be thought about.
The board has to then decide on the best option to pursue. This usually involves a variety of factors such as cost and the impact. Scope can be measured in terms of dollars, years or the number of people affected (e.g. clients, clients or employees). It is beneficial to have a framework that ties these criteria in with the board’s general principles of governance for the organization.
The board should explain the reasoning behind its decision in the minutes. This will include a rationale for the decision along with a list of possible options considered, any advice required, and whether or not the requirements were met.