Making Good Decisions

Successful decision-making by a board (or management committee) is the responsibility of the President (or Chair). This doesn't mean the President has the authority to make decisions for the board, but it does mean they have to facilitate the best decisions possible. In meetings, this means:

• deciding how much discussion to devote to decisions;
• ensuring all items on the agenda are dealt with;
• ensuring all viewpoints are heard, including the minority viewpoints;
• ensuring the board has the information it needs to make timely responsible resolutions; and,
• ensuring that the Board is clear about the decisions they have to make (e.g. to approve, or not to approve, the purchase of paper clips).

To make the President's role easier, and meetings less stressful, the board needs to agree on its preferred decision-making method. Many NGOs seek 'consensus' decisions without fully understanding what consensus means. A textbook definition would be 'an ultimate position that represents a unified viewpoint after differences have been resolved'. A board that makes a decision without dissent has not necessarily made a consensus decision - quieter board members may secretly disagree with a decision. For this reason, the President must take pains to ensure that the decision is indeed unanimous. This might require him or her to directly ask each board member whether they agree or disagree on each decision, or ask out loud 'does anyone disagree?' and wait for a response, before the decision is minuted.

If you adopt consensus decision-making, you will still need a back-up system if the board becomes locked on an issue. In this case the President could put the resolution to a vote. To be true to the spirit of consensus, if the decision is found to be split 50/50, you can put it in your constitution, rules of association or board policy that the President does not have a casting vote and the proposal is deemed to be lost.

Some constitutions or rules of association may provide for certain important decisions of the board or management committee to be passed by special majority - i.e. by three quarters of the board/committee members present and entitled to vote at the meeting. Such decisions could relate to matters such as creating a charge over the association's property, issuing proceedings in court against another party, entering into contracts to purchase real estate, or any other matter considered important.

If the board would prefer a basic voting system, board members need to understand that if they 'lose' a vote, it does not help the organisation's interests to attempt to undermine the decision's implementation. Nor is it helpful to criticise the decision publicly or to staff - this is a symptom of a weak or divided board.

If a board member strongly disagrees with a decision, there are a number of options they can take, for example:

• ask that the reasons for their dissent from the decision be minuted;
• ask to bring a further proposal to the board suggesting another approach; or,
• insist the board monitor the effects of the decision closely and review it by a certain date.

If a board member finds that they have constant problems with the kinds of decisions the board is making, it may be time for them to consider whether they are the right 'fit' for the board. A separate interview, outside board meetings, with the President may also help in clarifying the directions the board is taking.

In the case of a company incorporated under the Corporations Act 2001, if members feel decisions of a corrupt or fraudulent nature are being made, they may have rights to apply to the court to have the fraudulent or corrupt behaviour stopped and also to obtain orders for compensation to be paid if they have suffered any loss or damage due to such fraud.

The member, along with others, could also seek to hold an extraordinary general meeting with the whole company membership to question the board further about certain decisions. Further advice can be sought from the Australian Securities & Investments Commission, or the Australian Institute of Company Directors.


Back to Boards: Duties of Board Members

This website does not constitute legal advice. ACTCOSS does not warrant or guarantee the currency, accuracy or completeness of information contained on this website. For further information, read our disclaimer.