NEW YORK, May 9, 2018 /PRNewswire-USNewswire/ -- While boards of directors are increasingly forced to make judgment calls under tighter timelines and greater scrutiny, the processes boards are using to make their decisions have been underexamined, according to a new report from WomenCorporateDirectors (WCD) and the KPMG Board Leadership Center. In "Decision-Making in the Visionary Boardroom," released today at the 2018 WCD Global Institute, the WCD Thought Leadership Commission and U.S. audit, tax and advisory firm KPMG LLP explore the barriers to good decision-making – including data overload and a tendency toward groupthink – and what it takes to overcome these hurdles.
"The decision-making process is an untapped frontier for boards, and improving upon how the board deliberates and makes decisions can enhance the company's competitive advantage," says Susan Angele, senior advisor with the KPMG Board Leadership Center. "What the commission found, based on the experiences of a diverse group of corporate directors from around the world, were common blind spots and innate biases that present themselves in almost all decision-making processes. Boards that can spot these early and address them head-on are simply better positioned to make smarter decisions."
"There is a constant tension between taking time to understand and thoughtfully consider the factors around an issue and the incredible sense of urgency that many board decisions require," says Susan C. Keating, CEO of WCD. "Whether deliberating a company acquisition or pivoting to a new business model, or hiring or firing a CEO, the process for getting to the ultimate decision can hold as much consequence as the decision itself."
The report addresses multiple factors affecting board decision-making processes – from the biases directors bring to the table to "analysis paralysis" to a sense of "ownership" over an idea that leads us to overvalue it or hang on too long.
To combat these barriers to good decision-making, the WCD Thought Leadership Commission offers tips for boards to improve their decision-making processes, including, among others:
- Taking a "clean sheet" approach to optimize the quality and relevance of materials provided to the board
- Identifying cognitive biases and mental shortcuts – recognize the widespread influence of innate tendencies that lead to overconfidence, groupthink, and blind spots
- When evaluating significant business proposals, probing management's consideration of contrary views, alternative options, and critical risks
- After a major decision, evaluating the decision-making process as well as the result.
The 2018 report is the most recent release from the WCD Thought Leadership Commission, whose mission is to advance key boardroom issues beyond theoretical discussion to practical, actionable recommendations. Previous topics have included executive compensation, creating a visionary board, and developing a strong leadership strategy within a company.
Resources: Visit the WCD site to download the full report and watch the video discussing better strategies for decision-making.
2018 Thought Leadership Commission
- Susan Angele (KPMG - US)
- Kathleen Barclay (Chile)
- Maureen Breakiron-Evans (US)
- Marina Brogi (Italy)
- Phyllis Campbell (US)
- Connie Collingsworth (US)
- Julie Hembrock Daum (US)
- Nance Dicciani (US)
- Marty Evans (US)
- Jan Fields (US)
- Brenda Gaines (US)
- Christie Hefner (US)
- Monique Leroux (Canada)
- Leila Loria (Brazil)
- Mary Pat McCarthy (US)
- Paula Meyer (US)
- Jenifer Rogers (Japan)
- Herta von Stiegel (Kenya and UK)
- Gabrielle Sulzberger (US)
- Susan Tomasky (US)
- Maggie Wilderotter (US)
For more information about the WCD Thought Leadership Commission Report, please contact Suzanne Oaks Brownstein or Trang Mar of Temin and Company at 212-588-8788 or news@teminandco.com.
About WomenCorporateDirectors Education and Development Foundation, Inc.
The WomenCorporateDirectors Education and Development Foundation, Inc. (WCD Foundation) is the only global membership organization and community of women corporate directors. A 501(c)(3) not-for-profit organization, the WCD Foundation has 80 chapters around the world. The aggregate market capitalization of public companies on whose boards WCD Foundation members serve is over $8 trillion. In addition, WCD Foundation members serve on numerous boards of large private and family-run companies globally. For more information visit www.womencorporatedirectors.org or follow us on Twitter @WomenCorpDirs, #WCDboards.
About KPMG Board Leadership Center
The KPMG Board Leadership Center champions outstanding governance to help drive long-term corporate value and enhance investor confidence. Through an array of programs and perspectives – including KPMG's Audit Committee Institute and the WomenCorporateDirectors Foundation – the Center engages with directors and business leaders to help articulate their challenges and promote continuous improvement of public- and private-company governance. Drawing on insights from KPMG professionals and governance experts worldwide, the Center delivers practical thought leadership – on risk and strategy, talent and technology, globalization and compliance, financial reporting and audit quality, and more – all through a board lens. Learn more at kpmg.com/blc.
About KPMG LLP
KPMG LLP, the audit, tax and advisory firm (www.kpmg.com/us), is the independent U.S. member firm of KPMG International Cooperative ("KPMG International"). KPMG International's independent member firms have 189,000 professionals, including more than 9,000 partners, in 152 countries.
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SOURCE WomenCorporateDirectors Education and Development Foundation, Inc.
