If a board makes a decision, they must ensure that the decision is backed by evidence and supports the organization’s goals in the long term. This requires obtaining information from multiple sources, such as surveys of employees, industry reports and competitor analysis to back up the decision. It also involves weighing the various options against one another and determining which one is most likely to yield the desired results.
Board members must be aware of the alignment of a proposed course with the company’s mission and vision, as well as any legal or regulatory requirements. In addition, Board members should be aware of any risk associated with the decision and ensure the board’s risk appetite is considered in the process.
It is also beneficial for boards to employ methods designed to avoid groupthink, like brainstorming, Six Thinking Hats, Disney Planning Method and Delphi Technique. It’s also helpful to assign informal roles to certain Board members, such as „devil’s advocate” to challenge the opinions of other members and to help come up with an array of ideas.
Boards can also decide on how and when to M&A transactions notify members of forthcoming votes. This allows them to discuss and read information before voting. They can also ask questions and formulate alternatives. This method helps to reduce the level of fatigue experienced by board members. In the past, I’ve been a part of situations in which urgent information was provided to boards prior to when they are expected to take a vote which could interfere with the decision-making process, and delay the decision-making process.