If you need to make a decision fast, you don’t want to rely on email threads to get buy-in from the board. There’s too much risk: an unsecured email going astray; people responding to earlier versions of the messages; and duplication of effort and feedback.
One of the main functions of the board is to make informed, intelligent decisions. Whether it is a decision on business strategy, a merger or acquisition, financial statements, risk management, budgets or executive pay, those decisions will be scrutinised by the public and employees alike.
Regular decisions – business planning, budgets, remuneration and so on – can be scheduled into the board’s calendar. It is helpful, of course, to provide (securely) any information the board needs to review in advance, so that by the time they meet, they are already prepared to make the decision.
But some decisions will need to be made quickly. In a crisis or business-critical situation, for example, you need a fast, secure way to communicate and make a decision with directors wherever they are in the world. There may be outsiders who need to be brought in, quickly, to the process in order to manage the situation. You’ll certainly need to get your board the information they need to stay abreast of events and to make decisions as a crisis develops. And you need that infrastructure in place before the crisis breaks.
Either way, collaboration holds the key to effective decision making. While the final decision in any company will always rest with the CEO (who will, ultimately, be held accountable), collaboration in board decisions is becoming more commonplace. The Institute of Leadership and Management points to the trend of a more collaborative approach to decision making in companies, and away from the traditional model of a single decision from the CEO. It quotes Professor David Collinson, from Lancaster University Management School:
To make an informed decision, it is important to have all the relevant information available to you, and to review the impact of previous decisions in similar situations. As Michael Useem says in his article How Well Run Boards Make Decisions in Harvard Business Review: “Decision-making norms take shape in a common-law fashion, incorporating lessons learned from previous applications.”
IT giant, Cisco, talks about ‘decision driven collaboration’ as a three-stage process:
- Collaborate to Engage:Identify key contributors, solicit input, share ideas.
- Collaborate to Evaluate:Shape the matter to be decided, consider viable alternatives.
- Collaborate to Execute:Make a clear decision, align relevant parties, put it into practice.
It says this process is about “bringing together the elements to increase the intelligence of every decision. It requires clearly defined leadership, but focuses on locating and consulting people and information helpful to the outcome.”
Technology will enable you to bring together those elements to collaborate on important issues. A digital board portal – such as the solution provided by Diligent – will help facilitate better, quicker decisions, by allowing you to share ideas with your key contributors, evaluate the alternatives, and vote on the final options to arrive at a clear decision, fast.
In order to collaborate effectively, you should be able to use technology to:
- Give your board access to all the information they need to make informed decisions, based on having all the facts at their fingertips. That information might include the impact of past decisions; competitive analysis of similar issues; research showing the likely outcomes of the decisions; and all the data available.
- Schedule conference calls or meetings that you have to have in person; and set clear deadlines for making the decisions.
- Annotate every stage of the process. Having a single place to annotate documents and share notes is helpful, particularly where there are dissenting voices among your board members.
- Make sure your data is absolutely secure. This is particularly true when you’re making decisions about sensitive information (that might include details of M&As, confidential plans or how to proceed in a crisis). Unsecured email just won’t cut it. Use a secure, encrypted and password-protected communication system to keep information safe, and limit access to the people who really need it.
- Reduce duplication. Collaboration means that you’re all working from the same information in real time, no matter where you are physically. The last thing you want is 10 replies to an email with contradictory views. Having a single area where a unified discussion can take place is a much more efficient way of making a decision.
- Update information live, as the situation changes. Whether you have new information, or updated data, you should ensure that all parties involved in the decision have access to the most recent and relevant information in order to make the decision.
- Vote on important decisions. You don’t have to be together in person to do this; a mechanism for voting within your collaboration tool will allow you to collect the views of your board (and document them) wherever they are in the world.
A decision can only be as good as the information you have available to you at the time you make it. But with the right collaboration tool, you can mitigate risk by ensuring you have all the tools and information available to you ahead of the final decision being made.
Charlie Horrell, Managing Director EMEA, Diligent