Decision making by the Board is one of the most important, complex procedures in governance. Boards must make a decision regarding the kind of risk they’ll accept, and the level of expertise required to manage it. They must also decide https://boardmeetingtool.net/what-is-a-strategy-and-why-it-is-important-for-any-field the best ways to communicate with each other, and decide the best way to make decisions.

Effective boards steer clear of the use of binary decision-making and invest significant time in the multiplication of choices, as well as challenging assumptions. They make sure that their decisions are recorded in a manner that allows them to evaluate and review the effectiveness of their decisions.

Leigh Weiss says that for high-risk decisions, or what I call black elephants, it is important to involve a diverse group in defining the ultimate binary question, and in the discussion surrounding it. Weiss: This includes having outside experts help the board understand the implications and complexity of the decisions. And it involves the board actively engaging in the debate instead of waiting for management to make a pre-made decision and then allow the board to vote on it.

To ensure that the right person is in charge of making a decision, it is helpful to establish a matrix identifying which committees, executive directors and/or the entire board are required to make specific decisions. This can be especially helpful when the board is considering an important and significant decision that could impact the organization’s future. Boards must also decide on the voting procedure to use (supermajority or simple majority unanimous) for specific decisions.