A New Year board resolution?: “The board agreed, unanimously, not to repeat the bad decisions we made last year.”

decion picPicture: http://bdellium.com

How many decisions did your main or operating board or function team make in 2018? How many were good? How many bad? How can your board avoid repeating the errors of last year?

However, before answering those questions, can you all agree on what constitutes a good or bad decision? If your board decided to fire X, hire Y, spend A, not spend B or launch C are you sure you know who on your board agreed with those decisions and who didn’t?

Did you all vote? Did the CEO decide? Did the Chair hold sway? Did the CFO nobble the CEO? Did the GC even get a look-in? Might any of last years’ decisions land your organisation in legal trouble or onto the front pages next year?

Against what benchmark were those decisions judged? Short, medium or long-term? Were the decisions based on financial criteria only? Alternatively, were environment, society and governance (ESG) issues taken into account?

Who on your board is coming back from their Christmas break holding a silent and bitter grudge against a decision taken last year? Who has left your business who could damage it later? Do you know? If not why not?

Above all, even if the most forceful personality on your board took the decisions and you were too scared to speak up, does that person have anything approaching a decision-making process?

The theme for 2019 should be decision-making processes. If I were PM, I would pronounce 2019: “Decision-Making Process Year”. DMPY for short. Rolls off the tongue, doesn’t it?

In business, politics, sport and religion 2018 was an annus horribilis in decision-making terms.

A parliamentary report drew sharp criticism of KPMG, Deloitte, EY and PwC, saying they operated as a “cozy club incapable of providing the degree of independent challenge needed”; Parliament failed to take a decision on Brexit; perhaps Mr Wenger should have decided to leave earlier and the Pope missed a golden opportunity in Dublin to demonstrate, rather than assert, that the Vatican is serious about its corporate governance overhaul.

So what should your main or operating board, ExCo or function team do in 2019?:

Step 1: Acknowledge your default decision-making process, or change it

If your board doesn’t act as a board in the collective decision-making sense then why not just admit that? If one person makes all of the decisions, why not call that out at the start of the year? At least don’t pretend for another year. That would be dumb.

If you want to change to a proper collective decision-making process then do so, without delay, in January.

Step 2: Agree on a purpose, strategy and behaviour (PSB) plan against which your board will judge its decisions

If the purpose of your organisation is to maximise profits and screw everyone else, at least admit that, take responsibility for it and judge your decisions against that benchmark.

If on the other hand, you want to balance profit with the environment, society and governance issues then don’t pay lip service to those issues – agree, up front to what extent, ESG will figure in your decisions.

HBR gives CEOs a 20% weighting for ESG in their Top 100 CEO rankings. I believe this is as small as it is arbitrary. Why not 50%? Why not #ESGP?

Step 3: Appoint a Devil’s Advocate by rotation at each meeting

How many meetings did you attend last year during which you remained silent about an issue or a behaviour on which you felt strongly? How many times did you stand by and watch a colleague being bullied or wronged and didn’t speak up? How many times did you witness hard work go uncelebrated and failed to call it out? Or which business decisions did you disagree with, but didn’t feel able to fight?

A simple way of solving this problem is to appoint a Devil’s Advocate by rotation at each meeting who has permission to call out whatever he or she likes about whomever he or she likes, or not.

No chance, I hear you say, on your board.

If true, then expect next year’s decisions on your board to be as good or as bad as last year’s. Nothing will change unless you make it happen.

Why not start with small change? What would constitute a small change on your board?

#smallchange

Ciarán Fenton

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