Condensed decision-making checklist for company Boards of Directors
By Chisom Obiudo *
Part of the role of a board is to continuously exercise the duty of care, skill and diligence before exercising its collective decision-making powers.
Here is my list of non-exhaustive factors to consider and questions that boards or governing bodies should ask before making a decision:
Do we as the board have the power to decide on all issues presented at the table?
Are we acting within the scope of our mandate?
Have we looked at our company’s constitution?
Is our proposed decision in conformity with the relevant laws and regulations in our country of operation?
2. INFORMATION GATHERING:
Having established our authority to make this decision, are we satisfied with the information from management? Is it sufficient to enable us to apply our minds and arrive at a strategically informed decision?
Is this a credible source of information?
What would be the strategic implication of our decision on this matter?
Do we require expert advice on this matter?
Have we been adequately briefed on the risks and possible consequences of this decision?
Are we ready to be held accountable should something go wrong?
Have we consulted our key stakeholders who are impacted or likely to be impacted by our decision?
3. POLICY REVIEW:
Do we have a board policy to guide us on this decision? If so, are we following it?
Are we comfortable with the policy directives for this kind of decision?
If we don’t have a policy addressing this decision, do we develop one if it is a recurring issue?
Have we provided sufficient time for our stakeholders to provide their views on this issue before we make our final decision? How best can we explain the process of arriving at our decision?
Finally, always remember that great questions in the boardroom lead to better choices and decisions.
“To make a decision, all you need is authority. To make a good decision, you also need knowledge, experience, and insight”. Denise Moreland.
* Chisom Obiudo is a legal and governance professional with a passion for helping governing bodies embed a culture of good governance through her thought leadership and corporate governance training. She is currently a member of the Institute of Directors South Africa and serves as the Deputy Chairperson of the Governance Committee at Namibia Investment Fund. She holds an LLB degree and a Masters degree in corporate governance and specialised certificates in compliance, non-executive directorship and legislative drafting. She writes in her personal capacity. Reach her at [email protected]