Board Management Decision Making

Board management decisions are based on a variety of facts, including governance, financial, HR or even strategic. This is particularly true of the more complex issues a board might have to deal with, like M&A or strategy decisions.

These kinds of problems typically require significant qualitative input from the management team and external experts in order to formulate an opinion and understand all the risks involved. This level of detail needs to be carefully controlled to prevent the decision-making process being slowed down or taking too long. These decisions can be discussed in more focused meetings of the board, or in a workshop that is specifically designed for the purpose. This can save time and energy in other discussions of strategic importance.

The appropriate people must be present when the board debates an issue. The tendency of groupthink and boards to rubber stamp decisions could cause serious harm. The https://boardmeetingtool.net/ best way to stop this is for boards to develop a habit of analyzing every decision that is formally made available to them, in order to determine if it really should be considered a decision at that level.

It is essential that boards consider the various options for decision-making. They differ in their complexity, but each has strengths and weaknesses. A helpful exercise for a board of directors is to discuss the pros and cons of these frameworks with their management teams in order to determine which one is most suitable for a particular situation.