To make sound decisions in a boardroom you require open discussion, strategic analysis, and technology. These strategies, if implemented correctly, can dramatically improve the board’s ability to make decisions and lead to the long-term sustainability of an company.
The first step is collecting all available information and ensuring it is thorough, accurate pertinent, reliable, and complete. This is the management’s responsibility and involves gathering information from both internal as well as external sources. It also involves conducting research and making sure that the board receives timely, comprehensive information.
After the data has been gathered The next step is to consider the potential options that could address the problem. This can be a lengthy procedure, particularly when trying to reach consensus. Certain boards employ methods like the Six Thinking Hats Method or Disney Planning Method in order to avoid groupthink and encourage an array of ideas of ideas to be considered.
The board has to decide which option to pursue. This typically involves a number of factors including cost, impact and scope. The scope of the project can also be measured by the number of affected individuals (e.g. employees or clients). It is helpful to have a framework that connects these criteria with the general governing principles that govern the company.
The board has to explain the reasoning behind its decision in the minutes. The document should include a rationale for the decision and a list of the alternatives that were considered, any advice requested and whether the criteria were in fact met.