As a governance institution, the board of director’s makes strategic decisions based on reliable data and decides on the future for an enterprise. The role of the board is guide the direction of the company, and to make decisions that are aligned with the company’s overall objectives, mission, and vision. However, a well-structured and organized board can be more than just an instrument for management.
The board’s decision-making ability will be greatly affected by the way it is constituted. The board members should possess a variety of abilities and experiences, so that when they are discussing issues, they can draw on new perspectives, which allow for new paths to the business. Diversity in the board composition is among the most effective methods to achieve this. A absence of diversity in the boardroom can lead to a narrow vision of the company’s place in society and optimal future direction.
Another way to improve the quality of board decisions is by the use of straw polls that aren’t binding. This is a technique that involves taking votes that don’t count and then describing why you voted as you did. This will stimulate more focused discussion of the issue and help to inform the final, formal and binding vote.
Boards can also help reduce decision fatigue by rearranging the agenda to place important decisions earlier and less important pro-forma items at the end of the meeting. This lets the board take its time and avoids the negative effects of decision fatigue.