Boards require a variety of information to make informed decisions. This includes qualitative input (e.g. the impact a decision can affect the company’s culture or which stakeholders it would have an impact on) and also quantitative data (e.g. legal due diligence, a return on investment analysis). It is the job of management to ensure that the appropriate people are collecting this information while strategically analyzing and packaging it for board decision-making.
It is also essential for the board to have a thorough understanding of what the business is currently doing in order to make informed decisions on strategic issues. This will enable them to understand the risks and opportunities that are present in the future of the business. This can be accomplished through an internal monitoring of board performance system or through a post-completion review of major projects and initiatives.
When making a major decision it is essential that the board is aware of its limitations and is prepared to delegate certain decisions to committees. This is particularly important source https://boardmeetingtool.net/financing-mergers-a-guide-to-modern-methods/ important for issues such as conflicts of interest, community benefit, CEO evaluation and executive compensation.
The board should be prepared to face a moment of uncertainty. This will allow the board to use its collective wisdom, experience and abilities while remaining patient and active, rather than reacting. This can be accomplished through a variety of methods, including asking management to construct an image or mental model around the decision, creating the «red team/blue-team» procedure, which involves experts with different perspectives, or dedicating time to discuss a complex issue.