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Things to be done to establish a culture of execution of Board decisions

The Board of Directors is at the apex of the decision-making process in a company. The Board, along with the management, takes a number of decisions relating to important items, such as strategy, annual budget, accounts of a company, succession planning and the like. Decisions, if not implemented, would remain only on paper. It is important for the Board to establish a culture of timely execution of decisions. Equally important is to hold the right set of persons accountable for the implementation and the outcome. 

Some of the important items to be considered for this are – 

  • Setting measurable goals – It is important for the Board to set measurable goals and targets for execution. For these goals to be realistic, it is important that the right information, complete in all respects, is presented to the Board. 
  • Communicating goals – The Board should clearly communicate to the management its expectations from the management team. Communication should be free from ambiguity, so that management does not delay implementation for want of clarity.
  • Delegating responsibility – Once decided, the Board should delegate the responsibility for completion of the task to the concerned management personnel. 
  • Accountability – Once the goals are communicated, and there is management buy-in, management personnel should be held accountable for the achievement of goals. One of the most effective ways of doing this is to have an Action Taken Report (ATR) as a fixed item in the agenda of each Board meeting and committee meeting. The ATR should list all the pending actions from earlier meetings, indicating the name(s) of the person(s) responsible for the items, and the status of implementation on the date of the meeting. Till action on an item is concluded, it should not be removed from the ATR. 
  • Mid-course corrections – In case mid-course corrections are required, the same can be attempted if there is continuous review. 
  • Adhering to timelines – Action, for it to be effective, has to be undertaken within the pre-decided timelines. Delay in adhering to timelines would hinder effective execution. 

Without proper execution, decisions of the Board would not be of help in furthering the business of the company. For Boards to be effective, execution of their decisions is critical.