Boards require a variety information to make informed decisions. This includes both qualitative information (e.g. the impact that the decision could have on an organization’s culture, or the stakeholders affected) and quantitative information (e.g. legal due diligence, return on investment analysis). It is the responsibility of management to ensure that the right people are gathering this information, strategically analyzing it and packaging it for board decision-making.

It is also important for the board to have a solid knowledge of what the company is currently doing in order to make informed decisions on strategic issues. This will allow them to comprehend the risks and opportunities that could be present in the organization’s future. This can be achieved by using an internal performance monitoring system or through a post-completion review of major initiatives and projects.

It is important to ensure that, when making a strategic choice the board is aware of its own limitations. It must be prepared to delegate some decisions to its committees. This is especially important for issues such as conflicts of interest, community benefit, CEO evaluation and executive compensation.

The board must also be ready to be in a position of uncertainty. This will let the board’s collective experience of expertise, experience, and knowledge to be utilized while remaining patient and active instead of reacting. This can be accomplished in different ways, such as asking management to develop a mental model or impression about the decision, establishing a “red team/blue-team” process, involving an expert panel with diverse perspectives, or committing time to discuss an intricate issue.

M&A transactions

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