The primary task for all boards is to establish corporate direction. It is also the area in which boards find it most difficult to spend sufficient time and about which directors most frequently report the inadequacy of their knowledge.
Consider these results from a Harvard Business School survey: –
Having considered corporate and financial strategic options for the organisation, the board is then able to decide the direction for the organisation. Next is to ensure that business strategies and plans are developed to implement the corporate strategy.
These are likely to be the responsibility of the management – the people who have to deliver the results.
The role of the board is to approve the development process and to ensure that the strategies and plans are consistent with the corporate strategy.
This might be integrated with the organisation’s budgetary process and is likely to be iterative – depending on the extent to which the board needs to be involved.
Key considerations are: –
Are the business strategies and plans for different parts of your organisation determined and regularly reviewed by the board?