Boards require a range of information to make informed decisions. This includes qualitative information (e.g. the impact a particular decision could have on the organization’s culture or which stakeholders it would have an impact on) and also quantitative data (e.g., legal due diligence and a return on investment analysis). Management’s responsibility is to ensure that the proper people are collecting, strategically analyzing and packaging this information to aid in board decision-making.
In order to make strategic decisions, it is essential that the board of directors has a thorough understanding of the present activities of the business. This will enable them to better understand the upcoming opportunities and risks of the organization. This can be achieved by implementing an internal board performance monitoring system or by conducting a post-completion analysis of major projects and initiatives.
When making a decision on a strategic plan it is crucial that the board is aware of its own limitations and is able to delegate certain decisions to its committees. This is especially https://boardmeetingtool.net/board-chair-responsibilities important for issues like conflicts of interest and community benefits, CEO evaluation and executive compensation.
The board should be prepared to sit in a place of uncertainty. This will let the board’s collective experience as well as expertise to be utilized while remaining attentive and patient instead of reacting. This can be achieved in a variety of ways, like asking management to develop an impression or mental model about the decision, establishing the “red team/blue-team” process, which involves experts with diverse perspectives, or committing time to talk about a difficult issue.