Contested proposals go first to the board committee best equipped to judge them, such as strategy or audit, whose chair then presents them to the full board with the committee's endorsement.
An example
Closing thirty of its one hundred twenty branches and reinvesting in digital lending was the plan the head of strategy at a mid-size bank had to get through a board she knew would split: several directors had long ties to the towns where the branches sat. She asked the chief executive to send it first to the board's strategy committee, whose three members had deep retail banking experience. Over two meetings the committee tested the plan, asked for branch-level profit data and customer transaction trends, and added a condition: an ATM and a part-time advisor in every town that lost its only branch. The committee chair, a former retail banking executive, presented the revised plan to the full board with the committee's unanimous recommendation. The board approved it with one director against.
Why it works
Committee endorsement makes the proposal look better to the full board, because it arrives having passed directors who are expert in the subject and did the detailed work. It makes approval easier, since directors who are not expert can rely on colleagues who are, and the committee chair carries a credibility the sponsor lacks. It depends on the right committee by charter and expertise, a real review, and a board that respects its committees.
The thinking behind it
James K. Sebenius James Sebenius's A Better Way to Negotiate: Backward (2004) argues that the order in which parties are approached can decide whether a coalition forms, and advises studying whom the hardest party defers to; in his examples, an early endorsement from a respected party raised the value of later approaches. Sending the branch plan first to the strategy committee secured that early endorsement from the directors the rest of the board was most likely to defer to on retail banking.
When it fits
Contested proposals that fall within a committee's remit, before a board that relies on its committees. You need the chief executive or board chair to route the item, committee members with real expertise, and time for the review. If the committee is weak, or routing to it would look like steering, the path does not help.
How to use it well
Choose the committee by charter and expertise, the one that would naturally own the question. Routing to a committee picked only because it is friendly will be seen for what it is.
- Ask the chief executive or chair to send it there through normal governance.
- Give the committee everything it asks for, including data that cuts against you.
- Expect changes, and accept those that improve the plan.
- Brief the committee chair on how the full board is likely to react.
Tell the full board that the committee is reviewing the item, so nobody is surprised when it arrives.
What it costs and where it backfires
Committee review adds time, and the committee may reshape or reject the plan. Directors outside the committee may feel the decision was made without them. Make the review real. Choosing a committee because its members are allies, or giving it partial information so it endorses quickly, will look like a decision cooked in advance, and the directors who notice will distrust the next one.
When it is used on you
Read the committee's minutes when a contested item arrives with its endorsement, and ask what it tested, what it asked for, and what it changed. If it lacked a view you represent, ask for the item to come back with your concern addressed.