In order to make the right decisions, boards need an array of information. This includes qualitative input (e.g. the impact a particular decision could have on the organization’s culture or which stakeholders it would affect) and also quantitative information (e.g. legal due diligence or a return on investment analysis). It is the responsibility of management to ensure that the proper people are gathering strategically analyzing and putting together the data for board decision making.

In order to make strategic decisions, it’s essential that the board of directors has a clear understanding of the current business activities. This will enable them to understand the risks and opportunities that are present in the near future of the company. This can be accomplished with the use of an internal board performance tracking system or by conducting post-completion reviews on important initiatives and projects.

When making a strategic choice it is crucial that the board has an awareness of its limitations and is prepared to delegate certain decisions to its committees. This is particularly important for issues such as conflicts of interest, community benefit as well as CEO evaluation and compensation.

The board should also be ready to be in a position of uncertainty. This will allow the board’s collective knowledge and expertise to be used while remaining attentive and patient rather than reacting. This can be accomplished through a variety of methods, including asking management to create an image or mental model about the decision, establishing an “red team/blue-team” process, which involves an expert panel with different perspectives, or by committing time to https://boardmeetingtool.net/what-is-a-strategy-and-why-it-is-important-for-any-field/ discuss a complex issue.