Board Resources
 

Messages to the Reader

         
       
       
         
    book  

The Board's Role In Strategy, Risk Assessment, And Corporate Renewal....

As you travel with us, we hope to convince you that:

     
   
  • The board can have a big impact on long term outcomes if it focuses properly on the right forward-looking issues.  Boards can bring discipline to the value creation process.
  • Most boards can do a much better job of overseeing strategic planning, risk assessment, and renewal.  This creates opportunities for superior boards to enhance value.
  • Boards are responsible for ensuring that the company has a viable vision and strategy.  Many companies do not.  Look at the failures that litter thecorporate landscape.  Boards can learn from the mistakes of others.  The warning signs are always there!
  • The solution is a board involved in active oversight, leading up to direct participation where necessary, but never micromanagement.  The board must make sure there is a suitable process for developing the vision and strategy.  If not, it must prompt management to hire appropriate resources, or replace management.  If the overall team of the board and senior management fails to develop an adequate vision and strategy, the board is ultimately responsible for the failure.  Board members CAN make a difference.
  • Board oversight responsibilities include ensuring that management is assessing risk and renewing the strategy and the business model when performance benchmarks are not achieved.  These activities can make the difference between success and failure.  Unfortunately, success can sometimes be a prelude to failure.  Just as success breeds confidence, confidence can sometimes erode into hubris.  Warning signs go unheeded, and the organization loses its ability to respond to impending crisis.  If poor performance has weakened the organization, one adverse event can topple the firm.  Perversely, failure can be a prelude to success.  It may prompt the board to reawaken and become more aware of the risks.  Aggressive renewal efforts frequently succeed in bringing a company out of the dark. We can all learn from our own mistakes.
  • Great corporate leaders are given credit for producing outstanding results.  However, they do not do it alone.  Even in the best corporations, the leaders must have a process for continual renewal and improvement.  It is the board's role to see that an effective process is in place. The effective board uses oversight of the strategic planning, risk assessment and renewal process to evaluate, select, and coach the leadership team. This activity can pave the way for great corporate leaders to produce the outstanding results for which they are known.
  • Because every organization is different and unique we offer a set of 12 principles to guide directors (and management) toward a more effective oversight role. The 12 oversight principles are a guide to directors to help in their oversight of strategic planning, risk assessment and renewal.  These principles should represent a practical take-away for the readers.  Some readers may be concerned that there is not a cook-book of strategic planning that can be put into the director's pocket for just-in-time review.  In fact, the problem is deeper for a director and for management teams.  While there are principles that can be applied, the process requires a tremendous amount of hands-on effort by management.  They have to gather enough information about both the internal and external business environments that the face.  They have to formulate strategic alternatives and evaluate them as to risk and benefits. Further, they have to bring the board into the process, so that the board can satisfy itself that the process is "doing right by the company."  All of this requires customization of the process for the company itself. 

While the customization will always be necessary, we see the principles and many of the other short-cuts and suggestions that we are including in the book as helping to prepare the director to become productively involved in the process.  Also, because readers will gain a better understanding of the role of the director in the planning process, readers will be better equipped to avoid the opposite pitfalls of micromanaging or abandoning the strategic planning process.