Decision-Making in the Visionary Boardroom

In my experience in dealing with boards, very few decisions are actually made. All too often the focus is on the minutes, matters arising and the operational reports such as the MD report, and financials.

So, before a board starts worrying about whether they are “visionary”, the first step is to get into the rhythm of having robust discussions and then making well thought through decisions.

Gone are the days when “off the cuff”, or “around the dinner table” business decisions are good enough. Stakeholders are no longer just the shareholders and therefore no longer just the people sitting around the said dinner table.

Stakeholders now include the obvious ones such as staff, clients and suppliers, but also the less obvious ones such as local community, landlord, local environment, industry bodies, and many more. It is therefore critical that when making a decision in the best interests of the business that we are running, we consider a diverse range of perspectives, write things down and demonstrate that options were properly considered by minuting board meetings accordingly.

The "visionary" boardroom is the next level up, where the directors have a much better understanding of their role, their responsibilities and – most importantly – their blind spots.

In KPMG 's 2018 article on this topic, (written in partnership with Women Corporate Directors ), they discuss seven main priorities:

1. Understanding and Mitigating Decision Biases: Recognising the influence of inherent biases and mental shortcuts on decision-making processes is crucial. Visionary boards strive to minimise biases such as over-confidence, confirmation bias, and anchoring to ensure balanced and fair decision-making.
2. Seeking Comprehensive and Relevant Information: Visionary boards are committed to acquiring and utilising high-quality, relevant information to inform their strategies. This includes data analytics, understanding market trends, and recognising the importance of non-financial information such as organisational culture and stakeholder expectations.
3. Cultivating a Forward-Looking Perspective: Emphasis is placed on strategic foresight, with boards actively seeking to understand and anticipate future market trends, technological advancements, and regulatory changes. This proactive stance helps boards to navigate uncertainty and position their companies for long-term success.
4. Leveraging Board Dynamics for Quality Decision-Making: Visionary boards focus on optimising board dynamics, and promoting a culture that encourages open dialogue, diverse perspectives, and constructive challenge. This environment drives thorough exploration of strategic options and fosters innovative thinking.
5. Continuous Improvement through Evaluation: Visionary boards engage in regular, rigorous evaluations of their decision-making processes, board effectiveness, and individual director performance. These assessments are used to identify areas for improvement and ensure that the board remains aligned with the organisation's strategic goals.
6. Embracing Diversity and Inclusivity: Recognising that diversity (in terms of gender, race, expertise, and experience) enriches decision-making, visionary boards strive for a composition that reflects a broad range of perspectives and insights, enhancing their ability to address complex issues.
7. Commitment to Ethical Leadership and Governance: Visionary boards uphold the highest standards of ethics and integrity, ensuring that their decision-making processes not only comply with legal requirements but also align with ethical principles and societal expectations.

Overall, a "visionary boardroom" is characterised by its strategic focus, adaptability, inclusivity, and commitment to ethical governance, all of which are deemed essential for steering organisations towards sustainable success in an increasingly complex and uncertain global business environment.

How many of these aspects does your board need to focus more on to be truly visionary?