Board decision processes: the decision model.

• Author: Ross, Nancy
• Position: Board of directors in rural electric cooperatives - Includes appendices - Part three of a three-part series

Part three of a three-part series

Responses to the last article in the series

Before Nancy and I get into our topic for this issue, let's take a look at what we heard from the field. If you read Part 2 in this series, you know that there was limited response to our first article. Not the case with Part 2. We received several responses commenting on what boards are doing to enhance their decision processes.

Keeping Minnesota directors informed

The most detailed response came from Roger Spiry, Manager, Beltrami Electric Co-op, Bemidji, MN. Roger made the point that, before a board can really participate well in open decision processes, each director must be informed, and an open atmosphere must exist in the boardroom. We agree.

Roger described several approaches that the Beltrami board uses to ensure that directors are well prepared and well informed. Here are four of them:

1. All directors receive the board agenda book no later than the weekend before each monthly meeting. This provides for sufficient lead time for directors to review materials so that there are no surprises in the board meeting. In addition, it acts as a catalyst to discussion, so that directors who have questions on details can call the manager before the meeting, often getting their questions answered in advance. This approach prevents the board from getting bogged down in minor details during the meeting, yet still keeps them well-informed.

2. Beltrami's board has an Audit Committee of three directors which meets an hour before each meeting. Membership of this committee rotates 3 times each year.

3. Each April, the last agenda item is a board tour of the co-op's physical plant. The board of nine is divided into three groups of three, each of which is led by a key staff person. The small group allows them to ask questions, and increases their comfort level with the physical plant. The following month, there is an agenda item for open discussion in which board members have the opportunity to comment, ask about what they have seen, in the format, "I wonder why . . . ." Beltrami has had this board tour each of the last five years. Roger says that it seems to encourage their sense of common purpose, to keep the operations of the co-op open to the board, and to pro-actively keep the board informed.

4. Beltrami Board Meetings are generally held in two parts. The board rarely takes any action during the first part of the meeting, when the focus is on sharing information and informing the directors. In the second part of the meeting, directors discuss issues in depth, make decisions, and take action.

And the real Bob from Indiana

We also received a response from Bob Barton, manager of Daviess-Martin County REMC, Washington, IN. (In case you wondered who "Bob from Indiana" was in the last issue, now you know.) Bob shared with us his comments on the second article:

"Many times we begin looking at possible solutions to a problem before we clearly understand what we are trying to achieve . . . Your way of clearly identifying what you want to achieve - criteria listing - has a lot of merit. We will be trying out your suggested approach in the near future.

"The test of good board relationships is whether all involved feel they have been treated well after problem solving, even if they did not agree. If the end result is tension, anger or anxiety, then one may dread the next encounter.

"We will be looking forward to your next article."

For those complex, hard-to-solve problems:

THE DECISION MODEL

Part two of this series focused on the use of the criteria listing approach as an aid to board decision processes. It pointed out that sometimes a better decision can be made when board members agree first on what a good decision would look like, and then evaluate specific alternatives against the agreed-upon criteria.

As we conclude this series of articles, we want to discuss how to integrate our previous topic, criteria listing, into a decision model process.

Sometimes criteria listing is not enough

Criteria listing focuses attention on the most important aspects of a good solution. It encourages the board and the staff to look for multiple possible solutions, and it is an especially good approach when there is no single right answer. The criteria become the standards by which potential solutions are tested.

Business decisions that involve choosing an outside resource - a software package, a computer system or vendor, a SCADA system - are good examples. You might compare criteria listing to the specs for a bid. The staff and board can determine both the minimum requirements and additional desired features. Those providers who can meet the minimum requirements remain in the running; those who cannot are eliminated. Then the contest turns on the additional desired features: the more optional features a provider can meet, the better that provider's chances of getting the business.

The next step

The approach that we will focus on in this article, the Decision Model, builds on the strengths of the criteria listing approach, by providing a complete decision-making process. It works best in these situations:

* When the problem is complex.

* When it involves critical technical aspects.

* When many stakeholders are involved.

* When it is important to arrive at the logically (not emotionally) best decision through consensus.

The model is a process for reaching consensus by focusing the attention of the board on the issue to be decided. A competitive market requires a deliberative process because boards will be making more...