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How a Board Makes Decisions

Decision-making models, processes and mechanisms.

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​

Having and following a well-documented decision-making process will improve a board’s efficiency and responsibility.

The process itself should be written down and kept close at hand for quick reference at board meetings.

The actual decisions that are made should also be mentioned in the minutes taken at board meetings.

A rational decision-making process

Your board should be making rational decisions – ones that use facts, analysis and a step-by-step process to arrive at decisions. In an organizational setting, making decisions based on intuition and emotions are much more likely to lead to bad decisions.

This is especially true for important decisions, such as ones that effect the direction of your organization, involve large expenditures and create widely-felt impacts

Here’s an example of a rational decision making model your board could use:

  1. Clearly define the decision that needs to be made and why
  2. Identify the decision criteria
  3. Allocate weights to the criteria
  4. Develop the alternatives
  5. Evaluate the alternatives
  6. Select the best alternative

For less important, less complex decisions, or ones where precise decision criteria are hard to determine, be sure your process includes a pre-defined mechanism for making a final decision in these circumstances. Examples: simple majority vote, two-thirds majority vote, consensus, etc.

Your browser does not support the video tag.Transcript

Text on screen: Title- “A Strong Foundation for Your Housing Project: Decision Making Process”

(Visual: Lamppost with tree)
Narrator:
Having a well documented process on how your organization makes important decisions will help you be more efficient and accountable.

Formal, written procedures that outline everyone’s role in the decision making process will keep everyone “on the same page” when it comes to expectations and issues.

(Visual: English Narrator)
Text on screen: “Written Procedures” “Decision Making Process” “On the Same Page”
Text on screen: Title- “Implementation”

Narrator:
A constitution (or terms of reference) should be established early on to determine how important decisions will be made. It should be clearly written, and include information such as; is a decision to be made by vote, by consensus or by unanimous agreement?

Text on screen: “Decisions Made By:” (Bullets: Vote, Consensus, Unanimous Agreement)
Text on screen: Title- “Monitoring”

Narrator:
During a meeting where decisions are made, document all information and follow any prescribed steps to keep everyone accountable. It must be clear, with each board decision, who is responsible for the follow-up on an item or activity. A board, committee or staff member should follow up, and make sure to see that action is taken.

Text on screen: “Document All Information”, “Keep Everyone Accountable”, “Follow-up”, “Make Sure Action is Taken”
Text on screen: Title- “Reporting”

Narrator:
Keeping a board member’s handbook that contains essential documents can help new members understand responsibilities and maintain consistency in decision making. The individual assigned responsibility for the activity should provide regular status reports to the Board. Board approved minutes should be signed in a timely manner by the President or whomever has authority.

Text on screen: “Documents” (Bullets: Minutes & Agendas, Agreements & Contracts, Budgets & Financials, Policies & Bylaws), “Provide Regular Status Reports”
Text on screen: Title- “M’akola Group of Societies, Victoria, British Columbia”

Opening: (Visual: M’akola housing)

David Seymour:
We found a way to make sure the board became efficient and could do its job. We broke up decisions, the big decisions, into what we call the “Three-Phase Process”. We said that what we should bring to the table was first the idea, second, what is it going to look like? And then third, is the final decision.

(Visual: Interview of David)
(Text on screen: David Seymour- Vice President)
(Visual: B-roll of M’akola housing, board meeting about housing plans)

Kevin Albers:
I believe the Three-Phase Decision Making Process is probably the most critical success factor of M’akola. It gives the Board of Directors three different opportunities to engage in a conversation, to ask good questions, to be involved in the decision-making process. By the time we get to phase three, they’re so informed and they’re so knowledgeable about what it is that they have a great level of comfort to be able to give the project either the “go” or “no-go”.

(Visual: Interview of Kevin)
(Text on screen: Kevin Albers- Chief Executive Officer)
(Visual: B-roll of Board of Directors meeting, discussion of housing plans)

David Seymour:
The Three-Phase process allows us the time and energy to inject comprehensive discussions and the appropriate cultural component that necessarily makes the project a good project.

(Visual: Interview of David)
(Visual: B-roll of M’akola housing, Kevin discussing with resident in her home, Judy Bourne memorial plaque)

(Text on screen: Want More Information? Visit CMHC.ca/Affordablehousing to learn more about the governance of your organization.)
(CMHC logo on screen)
(Canada wordmark)
(Social Media Icons)

(Music ends)

​

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Date Published: September 27, 2021

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