How to Improve Board Management Decision Making

As a governance entity the board of directors takes strategic decisions based upon unbiased data and creates the future of a company. The board’s role is to guide the direction of the business and make decisions that are aligned with the company’s vision, mission and goals. However, a well-structured and organized board is more than an administrative rubber stamp.

The board’s decision-making ability can be significantly influenced by how it is assembled. Board members must be capable of bringing a variety of skills and experience to the table to provide new perspectives. This will open up possibilities for the business. One of the most effective ways to accomplish this is by encouraging diversity in the composition of the board. A lack of diversity in the boardroom could cause a narrow view of the company’s role in the world and a skewed future direction.

Straw polls are a method to improve board decisions. This method involves voting in a way that doesn’t count, and explaining your vote. This can help to stimulate a more focused discussion of the issue, and also better inform the final formal and binding vote.

Boards can also cut down on the effects of decision fatigue by restructuring their agendas to put crucial decisions at the beginning and pro-forma items that are less important M&A transactions at the end. This allows the board time to consider its options and avoids the debilitating effects of fatigue.