Board Management Decision Making

Board management decisions are determined by a variety data, whether it’s finance, HR, governance or strategic. This is especially true for the more complicated issues that a board may have to deal with, like M&A or strategic decisions.

To be able to comprehend the risks and make an informed decision regarding the potential risks, these issues require a large amount of qualitative input. It is important that this degree of detail is well controlled to ensure that the decision-making process isn’t become bogged down or overly time-consuming. The majority of these decisions can be addressed in more focused board meetings, or perhaps in a workshop specifically designed for the purpose, which can reduce time and energy spent on other discussions of strategic importance that a board must engage in.

One of the most important aspects of good decision-making is making sure that the appropriate people are in the room when board members debate an issue. The tendency of groupthink and boards to rubber stamp decisions can have serious consequences. It is best to have boards be able to analyze every important source formal decision they get to determine if the decision is appropriate for the situation at hand.

To accomplish this it is beneficial for boards to consider the different models of decision-making that are available. They vary in extent, but they all have strengths and weaknesses. An excellent exercise for a board of directors is to discuss the pros and cons of these frameworks with their management teams in order to decide which one is most suitable for a specific task.


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