Having and following a well-documented decision-making process will improve a board’s efficiency and responsibility.
The process itself should be written down and kept close at hand for quick reference at board meetings.
The actual decisions that are made should also be mentioned in the minutes taken at board meetings.
A rational decision-making process
Your board should be making rational decisions – ones that use facts, analysis and a step-by-step process to arrive at decisions. In an organizational setting, making decisions based on intuition and emotions are much more likely to lead to bad decisions.
This is especially true for important decisions, such as ones that effect the direction of your organization, involve large expenditures and create widely-felt impacts
Here’s an example of a rational decision making model your board could use:
- Clearly define the decision that needs to be made and why
- Identify the decision criteria
- Allocate weights to the criteria
- Develop the alternatives
- Evaluate the alternatives
- Select the best alternative
For less important, less complex decisions, or ones where precise decision criteria are hard to determine, be sure your process includes a pre-defined mechanism for making a final decision in these circumstances. Examples: simple majority vote, two-thirds majority vote, consensus, etc.