Does your Board operate with a decision filter? :
I sit on a local school Board of Trustees, which can be pretty straight forward when things are going well, and very challenging when they are not. Despite a school being very different from your typical SME, there are a lot of parallels between school boards and corporate boards and how they need to operate.
Despite my experience with corporate boards, I have learned a lot from five years working closely with a school, both from the smart people on the board and the complex situations that we have been faced with from time to time.
As part of our board processes, we have a regular board self-review, which is just a chance to reflect on how we have performed as a board, where we could do better and what we have done that worked well. A recent review session led us to reflect on some unanticipated consequences that had come from a recent important decision that we had made. While we still firmly believed that the decision we made was 100% correct, we had managed to unintentionally upset certain people, primarily because we hadn’t adequately considered their point of view. We also realised that we hadn’t managed to communicate our decision quickly enough to all interested parties, before it spread through the grapevine. While we ultimately ended up in the right place, our processes and execution had resulted in a lot of additional time and energy being spent tidying up the mess we had unintentionally created.
As a result of this review, I decided to try and implement a change to our board processes that would reduce the chances of the same problem occurring in the future. The result was the development of what I called ‘The Decision Filter’. It was a very simple document that the Board would refer to in the future when any board member felt the decision being made was in any way ‘material’ to our organisation or any of the stakeholders in our organisation.
The new approach firstly just requires us to pause and think before passing a material resolution. It then steps us through a methodical process involving the following:
- Every board member needs to confirm that they feel they have been given adequate information and adequate time to make an informed decision.
- Every board member is given the opportunity to raise any additional concerns and disclose any additional information.
- We then have a list of stakeholders in the organisation and we consider how they may be affected by our decision.
- Finally, we confirm that board members still believe that the decision being made is in the best interests of the organisation and is also in line with the mission, beliefs and values of the organisation.
If the resolution then proceeds, the final step is to put in place a structured and agreed communication plan regarding how and who to communicate the decision to.
While seemingly a simple and obvious process, too often I see or hear of boards of various organisations pushing through decisions without fully appreciating all the flow on implications. Often dominant board members can push through a decision without providing adequate information, or considering how a key stakeholder will be affected. By pausing and then giving all board members the chance to take a wider view and voice their opinions, the chances of making a poor decision are significantly reduced.
Hayes Knight’s expert advisers are able to help guide you through some simple best practice when it comes to ensuring your board operates smoothly – whether it’s a board for a profit or not-for-profit organisation, similar processes can be applied.