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Men in Suits

Decisions in the boardroom: the elements to excellent structure and discourse

Boardroom decisions are the basis of a director's responsibilities, but you must ensure that they are made correctly.

There is a place for debate in the boardroom. If it didn't, the directors are either unqualified for their duties or failing to live up to their responsibilities. A moderate amount of back and forth is desirable.

But, when the board becomes entangled in debate, it is necessary to proceed properly.



Here are some suggestions for navigating the boardroom arguments.


Culture

Before sitting at the table, you should adopt a positive boardroom culture.

It is a culture that does not emphasise disputing or describing strategy decisions as victories or defeats. Healthy culture derives from the dialogue.

Ensure that you come to the table with a readiness to listen to other's perspectives and, more importantly, a willingness to weigh them against your own, so setting the road for an educated compromise.


Topics

Anything you speak in the boardroom should pertain to the board's mandate, be detailed, and address the concerns of stakeholders.

There is no use in entering the boardroom if, as a group, you have no idea what will be discussed. Every conversation should have a distinct objective. If you are unclear about this objective, do not panic; instead, halt, assess the situation, and then proceed.


Preparation

Boardroom decisions should be as well-informed as possible, and while board members are generally appointed because of their experience, it is always beneficial to conduct research or, at least, to brush up on facts before a meeting.


Attitude

Crucial strategy choices are made in the boardroom, thus it should never be surrounded by negativity.

Always use common sense and solid communication skills. Even if you disagree with your coworkers, you will always maintain a professional degree of respect.

If you're beginning to question your attitude, the solution may be as simple as monitoring the words you use. These could have a significant impact on your mindset.


Good Housekeeping

While an agenda will often include the issues discussed in the boardroom, it will not include what was said or who voted. So, the minutes are essential.

The formal record of why a board acted as it did is included in the minutes. In the future, directors, management, and other stakeholders will frequently rely on this document.


Here are some suggestions for keeping boardroom discussions brief:

  • Use a template so that the minutes are structured from the start.

  • Provide copies of items that were distributed at the meeting.

  • Whenever a debate happens, it is generally sufficient to summarise what was said. Do this objectively. Only record who raised concerns if local laws or organisational procedures require it.

  • When the board votes on an issue, be explicit about what has to be recorded. Sometimes it's only the result; other times it includes the number of votes each alternative received. Occasionally, it includes who voted and how.

  • Avoid omitting conversations from the minutes due to sensitivity concerns. Typically, the board can request this collectively, although this is poor practice.

  • Be certain the chair signs the minutes.


In summation

Excellent culture, pertinent themes, adequate preparation, engaging attitudes, and thorough documentation.

These are the components of a productive environment for decision-making, and it is always a good idea to review them before your next boardroom meeting.


Our Directors’ Institute- World council of Directors can help you accelerate your board journey by training you on your roles and responsibilities to be carried out in an efficient manner helping you to make a significant contribution to the board and raise corporate governance standards within the organization.


Our ESG Expert certification will help you to amplify your understanding of corporate governance in a detailed manner paving a way for you to become a globally recognized ESG leader.


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