Why Boards Often Struggle with Timely Decisions

Why Boards Often Struggle with Timely Decisions

As the stewards of an organisation, Boards are entrusted with making decisions that facilitate enabling the shaping of the future of organisations. Yet, many Boards find themselves delaying action, even when urgency is evident. This article explores the key reasons behind slow decision-making and offers reflective questions and challenges to help directors critically assess and improve their Board’s decision-making appetite.

Information Overload and Asymmetry

Boards often receive voluminous, dense and complex Board packs, making it difficult to extract actionable insights. Additionally, management may filter or delay information, creating asymmetry that undermines timely decisions.

Reflective Questions

• As a Board are we receiving the right information at the right time, or just more of it?
• How do we as directors ensure that management knows what the Board needs and is informed about how it can best present balanced and unfiltered insights?
• As a Board do we have the appropriate governance architecture to help directors to challenge or verify the framing of key issues?

Common Challenges

• Achieving a simplification of the Board materials without losing the shades of meaning or expressions
• Ensuring that trust is enhanced or maintained with the CEO and management while focusing on encouraging transparency
• Creating the space for opportunities of appropriate pre-meeting briefings or deep dives without overburdening directors

Group Dynamics and Behavioural Factors

It can be easy to forget that Boards are social systems. Typical of groups is their consensus-seeking or groupthink and risk aversion all of which can slow decision-making, especially when directors fear conflict or reputational damage.

Reflective Questions

• As directors are we far more focused on achieving unanimity in our discussions rather than delivering direction informing timely action(s)?
• As a group do we have a culture that is open to and welcoming of healthy dissent and one that is strongly encouraging of diverse viewpoints?
• As directors, is there both an understanding of and an appropriate level of comfort involving the importance of balancing prudence with the need for decisive leadership?

Common Challenges

• Having a Board made up of directors that are comfortable operating with continual constructive conflict – demonstrating respectful exchange of different views, perspectives or interpretations and guided by a common aim of testing assumptions, surfacing risks and strengthening decision quality without undermining cohesion.
• Experience of a professional Board Chair who intuitively understands and lightly manages the group dynamics effectively.
• Having directors who are alive to the potential bias that is present in the Board and recognising and mitigating those cognitive biases in Board discussions.

Governance Structures

Given the history and evolution over decades of governance, Boards often operate within rigid governance frameworks. It is not unusual for many Boards to operate with infrequent or insufficient meetings and fragmented committee structures that can contribute to the delay in decisions, especially when there is a requirement for cross-functional input.

Reflective Questions

• At least annually, Boards ought to ask whether its governance processes are agile enough to respond to the current emerging issues?
• And while having Board committees is desirable, the question may usefully be asked if those committees collaborate effectively, or do they too often operate in a disjointed or loose connection with the Board’s responsibilities?
• Does the Board quickly and appropriately handle any of the decisions that fall between meeting cycles?

Common Challenges

• Revisit Board calendars and committee mandates regularly to ensure that they are fit for purpose.
• Empowering chairs, CEOs and/or executives to escalate urgent matters to be handled outside of scheduled meetings.
• Using technology to facilitate asynchronous decision-making.

Board Composition Issues

Despite all that is written about Board composition, many Boards are may still come together with less than desirable pathways. While not a guarantee of success, a Board’s ability to decide quickly so often depends on its diversity of expertise and balance of voices. Where a Board operates with a lack of relevant skills or over-reliance on dominant directors this in turn can significantly slow sound decision-making.

Reflective Questions

• Do we have the right mix of skills to understand and act on the organisation’s complex issues?
• Are all directors equally engaged, or do a few voices dominate while others are making up the numbers?
• How do we ensure newer or quieter directors contribute meaningfully?

Common Challenges

• Bringing a disciplined approach to recruiting of directors to ensure an appropriate balance leaning into cognitive diversity and not just the past usual technical skills.
• As appropriate enabling of rotating leadership roles to avoid bottlenecks.
• Providing a structured and professional onboarding of new directors and the possibility of renewal sessions for continuing directors along with offering mentoring to build the Board’s collective confidence and capability.

Psychological and Social Barriers

Many Boards are challenged as a consequence of their directors facing personal and reputational risks. If this is present within a Board it can potentially exert a strong impact leading to the existence of a status quo bias or escalation of clinging to a past commitment despite its continuing with a flawed strategy due to sunk costs.

Reflective Questions

• Are we too cautious due to fear of liability or reputational harm?
• Do we regularly revisit past decisions with fresh eyes or go with the flow of the past as it is easier to accommodate this approach?
• How do we create psychological safety for directors to challenge the status quo?

Common Challenges

• Clarifying legal protections and fiduciary duties.
• Normalising strategic pivots and learning from failure.
• Encouraging directors to speak up even when uncomfortable – nothing is considered out of bounds.

External Pressures

Increasingly, Boards are now required to navigate complex stakeholder landscapes and social media scrutiny, which can lead to directors seeking refuge in overly cautious decision-making.

Reflective Questions

• Are we balancing stakeholder interests or being paralysed by them?
• How do we prepare for reputational risks without delaying important and essential decisions?
• Do we have a clear framework for stakeholder prioritisation?

Common Challenges

• Developing stakeholder engagement strategies that support agility.
• Building reputational resilience through proactive communication.
• Ensuring decisions are values-aligned and defensible under scrutiny.

Final Reflection

Improving a Board’s decision-making appetite is not just about speeding up the approach. Other elements such as cultivating clarity, courage, and confidence are critical for all directors to embrace and operate with these as the Board’s embedded operating culture. Directors must reflect on their own behaviours, challenge structural constraints, and foster a culture where timely decisions are both possible and valued in our VUCA world.

DISCLAIMER: This article is general only in nature and is not advice.