Bringing Quality to Board Decisions

Board member accountability has intensified in recent years. Yet, too often board members are not effectively engaged in key decisions affecting corporate value. They only fulfill an approval role for management proposals, eventually leaving them with only two choices—to back management on key strategic issues or, if the board sees too many missteps, to replace management altogether.

Dr. Carl Spetzler of Strategic Decisions Group argues that boards should embrace a more collaborative approach to corporate strategy decision-making, which he calls the “Board Decision Quality” (BDQ) approach. Clearly, the board can only engage on a few truly strategic decisions in more than an approval mode. Therefore the board and CEO should agree on the strategic agenda at the beginning of an annual cycle and flag specific corporate strategy issues for the Decision Quality process with true board engagement; the rest are delegated to management and follow an approval process approach. A BDQ approach can then engage the board (or board committees) in a dialogue process to develop and weigh alternatives to a situation before a recommendation is developed. Dr. Spetzler lays out the four elements of this approach in an article that originally appeared in The Corporate Board.