Board management decision-making can be a complicated and arduous process. It requires balancing executive responsibilities and tasks with the collective viewpoint needed to determine the strategies that the firm should pursue, and the oversight required to police emerging strategic directions. The decision-making process can be subject to a range of factors that can lead to poor decisions. Usually, these issues result from the combination of poor performance over a lengthy period of time and the need to increase risk in order to compensate for the shortfall. The result is that the board may make a series of flawed assessments and misguided choices that can result in obvious negative consequences for the company.
The first step is ensuring that everyone on the board have access and confidence to objective data on which they can base their decisions. This requires a thorough method that involves the gradual development by the board of a mental model of the issue at hand and the investigation of that information to reveal any inherent biases and assumptions that could affect the subsequent decisions.
The most important thing is determining the appropriate time for an issue to be presented to the board for consideration. This is based https://boardmeetingtool.net/what-is-a-strategy-and-why-it-is-important-for-any-field on the overall governance protocol of the business as well as the board chair’s ability to facilitate the right discussions at the appropriate time to avoid last-minute announcements or decisions that rely on a « gut check » and aren’t supported by evidence. It also depends upon the internal procedures of the board including how they organize and review their agenda, identify which items require their attention and decide if an open-ended discussion or a committee is more appropriate.