When a board of directors makes a decision, they must ensure that the decision is supported by evidence and supports its goals in the long run. That means gathering information from a variety of sources, such as studies of the industry, employee surveys or competitor analysis as well as other information points that support the decision. It also involves weighing several alternatives against one another and determining which option is most likely to achieve the desired outcomes.
To do this, Board members should consider the ways in which a proposed course action is in line with the vision and mission of the company as well as any legal or regulatory requirements that may be required. Board members should be aware of the risks that may be associated with the decision, and ensure that the board’s appetite for risk is considered.
Boards are also able to benefit from strategies that are designed to avoid groupthink. These include brainstorming, Six Thinking Hats (a method to avoid groupthink), Disney Planning Method, and Delphi Technique. It’s also helpful to assign informal roles to particular Board members, such as “devil’s advocate” to challenge the views of other members and to help come up with an array of ideas.
Boards can also decide how and when to notify members of coming votes. This allows them to have the time they need to examine and discuss the facts prior to voting, as well as allows them to inquire about the decision and formulate alternative options. This method also helps to reduce the burden on boards. I’ve seen instances where boards were given urgent information before they were expected to vote, which could delay and disrupt the decision-making process.