What a board should ask before a major change

A major change usually reaches the board as a finished proposal. Management has done the work, the case is made, and the paper asks for approval. The board's job at that point is not to redo management's work. It is to make sure the change has been thought through well enough to justify the disruption it will cause.

That is a narrower job than it sounds, and a more important one. A restructure, a new system, or a change of leader shapes the business for years. The board approves it in a single meeting. The questions it asks in that meeting are among the most useful it will ever ask.

Five are worth asking every time.

1. What problem does this solve?

It sounds obvious. It often goes unanswered.

A major change can take on a life of its own. A new system is proposed because the old one is dated. A restructure is proposed because the organisation chart looks untidy. The change may be sensible, but the board should be able to name the specific problem it fixes and say how the business will know when it is fixed.

If the answer is vague, the change will be hard to judge later. A board that cannot say what success looks like before the change cannot say whether it happened afterwards.

2. What else did management consider?

A proposal that presents one option has usually discarded others on the way. The board should know what they were and why they were set aside.

A board that cannot say what success looks like before the change cannot say whether it happened afterwards.

This is not an invitation to reopen every choice. It is a check that the choice was real. If management considered doing nothing, doing less, or doing it differently, and has sound reasons for preferring the proposal, the board can approve with confidence. If no alternative was considered, the board should ask why.

The option most often left unexamined is doing nothing. A change proposal assumes change is needed, so nobody prices the alternative. Sometimes the cost of staying put is lower than it looks.

3. What does the business have to stop doing?

Every major change draws on the same people and the same hours as the business it is changing. A plan that adds a change without taking anything away assumes the business has capacity to spare.

The board should ask what will be paused, slowed, or dropped to make room. If the answer is nothing, the board should be sceptical. The likely result is that the change moves more slowly than planned, or that the daily running of the business suffers while it happens.

4. How will we know if it is going wrong?

Changes rarely fail all at once. They drift. Deadlines move a little. Costs rise a little. Good people start to leave. Each sign on its own looks manageable. Together they mean the change is off course.

A board that agrees in advance what the warning signs are, and who reports them, is far better placed to act early. The question is specific. What would we expect to see in the first few months if this were not working, and how would it reach us?

A good answer names measures, dates, and people. A weak answer promises regular updates.

5. Who answers for it, and do they have what they need?

A change needs one person who answers for it. That person needs the authority to make decisions, the time to do the work, and the cooperation of the people the change depends on.

Boards often approve a change without checking any of these. The accountable person is named, but they also have a full-time job. They have responsibility but not authority. Or the change depends on another part of the business that has not agreed to it.

The board should put the question to the accountable person directly. The answer, and the way it is given, tells the board a great deal.

Asking well

These questions are not meant to slow a good proposal down. A well-prepared proposal has the answers ready, and asking gives management the chance to show the depth of its thinking.

They are meant to catch a proposal that has not been tested. A change that cannot answer these five questions is not ready for approval, however strong the case appears. It is far cheaper for a board to send a proposal back for more work than to spend the next two years managing the consequences of one approved too soon.

A board's most useful contribution to a major change is often the questions it asks before it says yes.