How to Improve Board Management Decision Making

As a body for governance, the board of directors makes strategic decisions based on unbiased information and determine the future of a business. The role of the board is to guide the company in its direction and make decisions that are aligned with the company’s mission, vision and objectives. A well-structured board is more than an administrative rubber stamp.

The composition of the board can have a significant effect on the board’s decision-making capabilities. Board members should have different capabilities and experience, so when they debate issues, they can draw on new perspectives, which allow for new paths to the business. Diversity in the composition of the board is one of the most effective methods to achieve this. A lack of diversity could result in a narrow view on the company’s role in society and its future direction.

Straw polls are a method to improve the quality of board decisions. This technique involves voting that isn’t counted, and then explaining your vote. This could help encourage the discussion to be more focused on the issue, and better inform the final, formal and binding vote.

Boards can also cut down on the effects of decision fatigue by restructuring their agendas so that they place important decisions at the start and pro-forma items that are less important at the end. This lets the board be patient and avoid the negative effects of decision fatigue.

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