The Board's Role in Trial Go/No-Go Decisions
A Phase III go/no-go decision can commit a company to spending $100 million or more over several years. It can determine whether the company survives. And yet many biopharma boards handle these decisions with the same process they use for approving the annual budget — a management presentation, a few questions, and a vote.
This is a governance failure, and it happens because boards haven't defined their role in clinical decisions clearly enough.
The Governance vs. Management Boundary
The board does not design clinical trials. The board does not interpret biostatistics. The board does not negotiate with the FDA. These are management functions, and a board that tries to perform them is overstepping in ways that create real harm.
But the board absolutely has a role in the decision to proceed. That role is governance, not science. Specifically, the board should be asking:
Is the evidence sufficient to justify the capital commitment? Not "is the data good?" — that's a scientific question. Rather: given the data we have, the capital required, and the alternatives available, is proceeding the best use of shareholder resources?
Has management presented the decision honestly? Every management team wants to advance its lead program. The board must assess whether the case for proceeding reflects genuine conviction or optimistic interpretation of ambiguous data.
What is the downside scenario and can the company survive it? If the trial fails, what happens? Does the company have other assets? Enough runway to pivot? A board that approves a Phase III without understanding the failure scenario isn't governing — it's rubber-stamping.
The Information Asymmetry Problem
The deepest challenge in clinical governance is that the people making the recommendation — the CEO, the CSO, the CMO — understand the data far better than the board members evaluating it. This asymmetry is structural and unavoidable.
Effective boards address it through several mechanisms. They engage independent scientific advisors who report to the board, not to management. They require management to present the bear case alongside the bull case. They ask the CSO to identify the single data point that would change the recommendation, because this forces intellectual honesty about the strength of the evidence.
Structuring the Decision Process
The best governance approach I've seen for major clinical decisions involves separating the process into distinct phases. First, an education session weeks before the decision point where management presents the data without a recommendation. Second, an independent assessment period where the board — with or without external advisors — forms its own view. Third, a decision meeting where management presents its recommendation and the board tests it against its independent assessment.
This process takes more time. It requires more preparation. But when you're committing $100 million of shareholder capital on a binary outcome, the governance process should reflect the magnitude of the decision.
The Courage to Say No
Perhaps the hardest part of clinical governance is being willing to say no. Boards develop relationships with management teams. They've invested years in a program. The entire company's identity may be wrapped around advancing this asset. Saying no feels like betrayal.
But the board's duty is to shareholders, not to the program. Sometimes the most important governance act is declining to proceed when the data doesn't support the investment — even when everyone in the room wants to believe it does.