The ability to make decisions within the boardroom requires a mix of open discussion and strategic analysis as well as the use of technology. When done well, these strategies can dramatically improve a board’s decision-making capacity and result in long-term sustainability for an organization.
The first step is gathering all available information and ensuring that it is in-depth, accurate trustworthy, relevant, and complete. This is the management’s job and includes collecting information from both internal and external sources. It also includes conducting research and ensuring that the board receives timely, comprehensive information.
Once the data has been gathered the next step is to determine the options that might be able to address the problem. This can be a lengthy process, particularly when trying to reach a consensus. Some boards use methods such as the Six Thinking Hats or Disney Planning Method to avoid the formation of groups and to promote the full range of options to be taken into data room M&A consideration.
The board will then have to decide which option it will take. This typically involves a number of elements, including cost, impact, and the scope. Scope can be measured in terms of dollars, years or the number of people impacted (e.g., clients or employees). It is helpful to have a framework of delegated authority that connects these requirements to the overall governing guidelines of the board for the organization.
When the decision is made the board must clearly communicate it in the minutes and describe how it was made. This will include the rationale for the decision as well as a list of options that were considered, any advice sought and what criteria were satisfied or not.
