Comments on: The Board’s Role In Corporate Strategy

By: Ed Konczal

Ed Konczal — Wed, 01 Jul 2009 13:01:24 +0000

Justin,

Thanks for commenting. Seems this is related to the financial crisis. BOD’s are wising up and starting to realize their role is more than to :rubber stamp” the strategic plan. You might also be interested in this
http://www.kslaw.com/library/publication/LDN_ViewPoints_2.pdf

Keep those comments coming.

Best wishes,

By: Lucy

Lucy — Wed, 01 Jul 2009 12:17:51 +0000

Justin, thanks for your comment – I agree with you. Did you see an interesting McKinsey article and survey from February (here) about the potential need to shake up the board’s process and style of interaction?

An outside perspective can help, and this is at least part of the non-executives’ role, surely – to bring their expertise gained elsewhere to this company. But, as anyone who has done any committee work at any level will know, it is all too easy to let group-thinking take over. A strong chairman is needed to avoid that – but not so strong that no-one feels they can dissent! It’s a difficult balance…

By: Justin Lison

Justin Lison — Wed, 01 Jul 2009 03:08:33 +0000

I really think that this post is spot on. Especially for its value in the proper way to manage a top down corporate strategy. With blame resting upon the senior management, for many of the issues which our corporations face, it is increasingly important that the board of director be not merely head nodders leaving important strategic management decisions in the hand of senior management entirely.

On issues involving a need for strategic thinking, as mentioned in the article, bringing in an outside perspective can have drastically helpful effects. If the board members contribute their individual perspectives in a way that really give large contributions to strategic internal analysis and external analysis then the business can avoid some largely avoidable capital allocations to research projects and consulting fees.

Board members as huge stakeholders must realize they have the power to command the authority to give feedback about long term objectives unparallel to any one else. If they lack the will to provide feedback at meetings then they will lose a degree of their ability to resonate a meaningful message into the senior management. The lack of feedback seem from any senior manager from the board will only give the senior manager an ability to take strategic management tactics entirely into his or her own hands, for better or for worse.