Dynamics of the board

Principles of sound decision making

General principles of decision making reflect the legal issues relating to the governance and leadership of a sports organisation, including the requirements that board members must:

• act within their powers;
• make decisions, and act, in the best interests of the organisation, in the present and for the future;
• be appropriately informed of relevant factors relating to a significant proposal under discussion;
• not be swayed by personal interests or factors that are irrelevant;
• be able to defend their decisions in terms of their legal duties and powers; seek and follow professional advice and guidance where necessary; and
• develop a clear and transparent process by which decisions are made.

By following these principles, board members can be confident that they are fulfilling their duties in accordance with good practice; can demonstrate the professional manner in which decisions are made; reduce the opportunity for perceived or real conflicts of interest to cloud decisions, and inspire confidence within interested parties and that the organisation is acting transparently. Board members should be entirely familiar with their statutory duties as company directors and/or trustees of a charitable organisation.

Effective boards make decisions in a way that meets the requirements of all relevant legislation and the organisation’s governing document. These will include:

• constitutional directions regarding the conduct of meetings and decision making;
• collective responsibility;
• respecting the conditions attached to the use of delegated powers, including the monitoring of the use of such powers; and
• recording.

Board members should be able to demonstrate that they exercise their powers by drawing on relevant and sufficient evidence. This will generally be different for each decision, depending on the situation and circumstances involved. On occasion, it may involve seeking expert advice from a suitably qualified professional or sub-committee of stakeholders, community members or other diverse populations whose perspective can be of value to the board. Where such advice is sought, it would be beneficial to have appropriate records of the reasons for seeking that advice, the advice received and the actions taken by the appropriate decision-making forum as a result of that advice.

Good decision making can be facilitated by:

• ensuring participants are given enough time to prepare for meetings;
• provision of high-quality board packs;
• obtaining expert opinions when necessary;
• allowing time for debate and challenge, especially for complex, contentious or organisation-critical issues;
• achieving timely closure;
• providing clarity on the actions required, including timescales and responsibilities;
• openness and a willingness to challenge, constructively, during discussions; and
• not revisiting decisions

Boards can minimise the risk of poor decisions by investing time in the design of their decision-making policies and processes, including the contribution of committees.

Boards should be aware of factors which can limit effective decision making, such as:

• a dominant personality or group of individuals on the board which can discourage contributions from other board members;
• lack of diversity;
• insufficient attention to risk and treating risk as a compliance issue rather than as part of the decision-making process, especially in cases where the level of risk involved in an activity could endanger the stability and sustainability of the organisation;
• failure to recognise the reputational implications of decisions and the actions arising from those choices;
• a reluctance to involve board members, or viewing the board meeting as a ‘rubber stamp’ to approve decisions already made;
• complacent or intransigent attitudes;
• weak, ethical/reflective organisational culture or a strong narrow/myopic culture; and
• inadequate information or analysis.

Many of the factors which lead to poor decision making are predictable and preventable for those that are not, additional precautions can be taken to avoid decisions that could damage an organisation or its reputation.

Flawed decisions can be made with the best of intentions. Competent individuals can believe passionately that they are making a sound judgement when they are not. Factors known to distort judgement include conflicts of interest, emotional attachments and inappropriate reliance on previous experience and decisions. For significant decisions, therefore, a board or committee may wish to consider extra steps, for example:

• Including in meeting packs a description of the process that has been used to arrive at and challenge the proposal before presenting it to the meeting. This allows participants not involved in the project to assess the appropriateness of the process as a precursor to assessing the merits of the project.
• Where appropriate, putting in place additional safeguards aimed at reducing the risk of distorted judgements. Safeguards may include:

• • commissioning an independent report,
  • seeking advice from an expert,
  • challenge from an appointed ‘devil‘s advocate’ within the board meeting,
  • establishing an ad hoc committee, or
  • arranging additional meetings.

Some chairs favour, for example, three separate discussions for important decisions: concept; proposal for discussion; proposal for decision. This gives senior managers more opportunity to put the case forward at the earlier stages, and all meeting participants the opportunity to share concerns or challenge assumptions well in advance of the point of decision.

Boards can benefit from reviewing past decisions, particularly those with poor or unanticipated outcomes. A review should not focus just on the merits of the decision itself but also on the decision-making process.

Culture

All those involved in decision making have a responsibility to maintain confidence in the organisation by upholding high standards of integrity and honesty, and supporting the chair and senior managers in embedding the appropriate culture, values and behaviours in the decision-making forum and beyond.

To help ensure your board has a positive impact on the culture of the organisation, it may be useful to establish a system where agenda items and reports are explicitly linked to the organisation’s strategic goals, vision and mission. This can help shape a culture that provides the best environment for achieving those objectives. For more on this topic, check out our report on organisational culture in sport.

Strategic leadership

To assist boards and committees in obtaining the right balance between strategic decision making and compliance monitoring, your sports organisation might like to consider making the following information available (in addition to that already mentioned):

• trends in performance, in terms of finance and organisational development, quality and the experience and satisfaction of participants, members, spectators and other stakeholders;
• forecasts and anticipated future performance issues;
• information about the external operating environment;
• a focus on the most important measures of performance, highlighting exceptions; and
• comparative performance with that of similar organisations.

Now that we have covered important aspects of your board size, capacity, and composition, as well as considered dynamics of board interaction, we can begin to understand how to develop evaluation tools to measure the effectiveness of your board and work to improve your board’s performance systematically and constructively.