To make informed decisions, boards require various sources of information. This includes qualitative input (e.g. the impact that a decision might affect the company’s culture or the stakeholders it will have an impact on) as well as quantitative data (e.g. legal due diligence and a return on investment analysis). It is the responsibility of management to ensure that the appropriate people are collecting the information, strategically analyzing it and https://boardmeetingtool.net/leading-software-to-improve-board-management-decision-making packaging the information to aid in board decision-making.
In order to make strategic decisions, it’s vital that the board is aware of the current business activities. This will help them better comprehend the future potential risks and opportunities for the business. This can be achieved by implementing an internal board performance monitoring system or by conducting a post-completion analysis of major initiatives and projects.
It is essential that when making a choice, the board is aware of its own limitations. It must also be prepared to delegate some decisions to its committees. This is especially important for issues like conflicts of interest, community benefit, CEO evaluation and executive compensation.
The board must be ready to accept the uncertainty. This will enable the board to draw on its collective wisdom, experience and expertise while remaining calm and active instead of reacting. This can be achieved through different methods, including asking management to create a mental model or impression of the decision, or creating a «red team/blue-team» procedure, which involves an expert panel with different perspectives, or dedicating time to discuss a complicated issue.