Why boards end up rubber-stamping decisions

A board says it wants early sight of major bets - acquisitions before they are fully formed, strategic concerns before they become crises. This is reasonable. But in many of the same boards, when early thinking arrives, it's met with the question it cannot answer: 'Have you fully thought this through?'

Management learns the lesson quickly. It comes back when the thinking is done. The board gets late information, fewer real options, and a feeling that it's only 'rubber stamping' decisions.

When a management team brings an early idea into the boardroom - something not yet fully formed, still carrying uncertainty - a common board response is to comment on the proposal rather than on the thinking behind it. Directors state their view before they have asked a question. They render a verdict on an acquisition before they have explored assumptions underneath it.


Many directors do it believing they're doing what they were appointed to do: challenge, probe, protect. The problem is not the intent. It's the timing, and tone. Rigour applied to a half-formed idea does not strengthen it. It just teaches those who brought it never to bring something half-formed again. Management comes back later, when the thinking is complete and the position is unassailable, every objection anticipated, every caveat folded in, the presentation is thorough and logic airtight.

Somewhere in all of that, the board loses the one thing it most needs to assess: management belief and conviction in the idea. The board asked for rigour and got it. But what it is now looking at is a late-stage proposal where all the thinking is baked in and work is done - and little change is possible.

Unfortunately, at this stage, some proposals get passed with the board feeling it has no choice but to approve them. Others get rejected with management feeling that its work and judgement are not valued.

The starting point is a set of directors, a working group or committee convened for that purpose. Major decisions - acquisitions, strategic pivots, significant capital commitments - are worked through side by side by management and this group before they reach the full board. When this topic arrives in the boardroom, it's not new to everyone in the room. Some directors have examined assumptions, asked the hard questions and helped shape the thinking.

This group must be formed of directors seen by the rest of the board as the right custodians of the matter under discussion. Where the group does not include the chair, appropriate and timely consultation with latter is necessary. We have seen many a board where the committee did not engage the chair (especially a key shareholder) and the acquisition was not okayed. However, having this working group is not sufficient. A few other things help:

Chair must facilitate When a director states a position before asking a question, or when the tone shifts from inquiry to verdict, the chair must name it and redirect. This requires a specific kind of confidence: willingness to interrupt a senior director mid-meeting, without confrontation, and reorient the conversation.

The intervention that works is rarely a challenge. It's a question that resets the room: 'I have a reaction, but let me hold it. What's the assumption this rests on that's hardest to defend?' Not every chair does this. Ones who do, change what management feels safe bringing into the room.

Educated and informed An educated board understands the business - its economics, competitive position, strategic logic - well enough to have a real view on the assumptions. An informed board is current. It knows what has happened since the last meeting, what competitors have done and where pressure is building.

External PoVs This can be a valuable way to add to management thinking and advise the board. A few boards use a 'red and blue team' approach. One external adviser proposes why the decision makes sense, while another presents why it does not. This provides board members with valuable perspective. Where the working group has done its work and these behaviours exist, a different kind of conversation becomes possible. Better decisions get made.

A board that only sees finished, defended work will keep feeling it's rubber-stamping decisions. Because, in effect, it is. The fix is not to ask management for better proposals, but to change what the board does when an unformed one arrives. A board gets the thinking it makes safe to share.

Mariwala is chairman, Marico, and Khemka is senior partner, Egon Zehnder