The decision-making process of board management is among governance’s most complex and critical processes. Boards must determine what kind of risk they will accept and the level of expertise required to manage that risk. They must also consider the best ways to communicate with one another, and decide what they will do to make their decisions.

Effective boards avoid making binary decisions and spend significant time on the myriad of options and challenging assumptions. They also make sure that their decisions are documented in a manner that allows them to revisit their decisions and evaluate the effectiveness of implementation.

Leigh Weiss: For high-consequence decisions, also known as black elephant decisions, the most crucial factor is to engage an array of stakeholders in the framing of the ultimate binary decision and in the discussion surrounding it. Weiss: This involves the involvement of experts to help the board understand the implications and magnitude of the decisions. It also involves the board actually participating in the debate instead of leaving management to make https://boardmeetingtool.net/ a decision and then vote on it.

To ensure that the correct person is deciding, it is beneficial to have an outline of the committees, executive directors and/or the board as a whole should make specific kinds of decisions. This is particularly helpful when the board is making the possibility of a decision that could have a significant impact on the future direction of the organization. Boards should also decide the type of vote (simple majority, supermajority, or unanimous) to use for particular decisions.