In order to make the right decisions, boards require the right information. This includes qualitative input (e.g., the impact that a decision might have on the organization’s culture or which stakeholders it would affect) as well as quantitative data (e.g. legal due diligence, a return on investment analysis). Management’s responsibility is to ensure that the appropriate individuals are collecting, strategically analyzing and packaging this information for board decision making.

It is also essential for the board to have a solid understanding of what the company is currently doing to make informed decisions on strategic issues. This will allow them to better understand the risks and opportunities of the organization. This can be achieved through an internal board performance monitoring system or by conducting a post-completion evaluation of major projects and initiatives.

When making a strategic decision it is crucial that the board is aware of its limitations and is prepared to delegate certain https://boardmeetingtool.net/financing-mergers-a-guide-to-modern-methods/ decisions to committees. This is particularly important in cases of conflicts of interest, community benefit CEO evaluation, and executive compensation.

The board should also be prepared to accept uncertainties. This will allow the board’s collective wisdom of expertise, experience, and knowledge to be used while remaining active and patient instead of reacting. This can be achieved through different ways, such as asking management to create a mental model or impression of the decision, or creating the “red team/blue-team” procedure, which involves a panel of experts with different perspectives, or taking the time to discuss an intricate issue.