Board Management Decision Making

Whatever it is, whether it’s human resources, financial or governance related, board decision-making requires careful analysis of a range of information. This is especially true for the more complicated issues that a board may have to deal with, such as M&A or strategic decisions.

To be able to comprehend the dangers and to form an opinion regarding the potential risks, these issues require a great deal of qualitative important source input. This level of detail should be managed carefully to avoid the decision-making process being slowed down or becoming time-consuming. These decisions are often addressed in more specific sessions of the board or in a specific workshop. This will save time and energy to engage in other discussions at a strategic level.

A key factor in making a sound decision is to ensure that the right people are present when board members discuss a particular issue. The emergence of groupthink and a tendency for boards stamp their approval on any decision that is brought to them could lead to serious consequences. The best way to avoid this is for boards to make the habit of scrutinizing every decision made available to them, to determine whether it should be considered a decision at that level.

It is important that boards take into consideration the various models of decision-making available. They differ in their complexity, but they all have strengths and weaknesses. It is ideal for a board to talk with its management team the advantages and disadvantages of each one in order to determine which one is suitable to a particular decision.