The Board's Role in Strategy and Leadership - NACD BoardVision
On this edition of NACD BoardVision, Judy Warner, editor-in-chief of NACD Directorship Magazine, hosts Mary Ann Cloyd, leader of PwC's Center for Board Governance, and Ray Gilmartin, director, General Mills and NACD, as they discuss the board's evolving role in strategy in today's ever changing business world.
>> Welcome to this edition of Board Vision. I'm Judy Warner, the Editor and Chief of NACD Directorship. And I'm here today with 2 experts on our topic of Strategy and Leadership. Ray Gilmartin comes at this topic from 3 distinct vantage points as the former CEO of Mark and Becton Dickinson and a Director for General Mills and the NACD, and as an academic, as a Professor teaching Management Practice at Harvard Business School. Ray, thank you for joining us today.
>> Oh, you're welcome. It's a pleasure to be here.
>> I'm also joined by Mary Ann Cloyd, who is the leader of PWC's Center for Board Governance. So, Mary Ann, welcome.
>> Oh, it's great to be here. Thanks, Judy.
>> I think that we should agree that the CEO owns Strategy. And my question for both of you is how has the role of the Board in Strategy Development evolved and what does that entail today?
>> Well, as a former or a retired CEO, I certainly agree that the responsibility for Strategy becomes to the CEO, not only for developing the Strategy along with his management team or her management team, but also the execution of that strategy. At the same time, the Board plays an extremely important role in terms of oversight. And when 1 prepares for a Board Meeting, it's a great exercise to ensure that the logic that you've used to develop your Strategy holds together, because in today's environment a Board is going to be more challenging than they have in the past about how you've developed the Strategy, what assumptions you're making, and how you expect to be successful in implementing.
>> Yeah, you know, and Ray 1 thing when you said that reminded me when I was on PWC Board. I can remember sometimes some of our CEO's Leadership Team made the comment. He said, you know, don't underestimate the effect that you as a Board have, even in the way that we prepare and do our jobs. Because he said it's often our thought processes. What's the Board going to say about this? But I also think, Judy, that I've seen the way Boards are approaching their role. I think it's evolving. And I know what I'm hearing from a lot of Board Members is they feel like the way they are asking the CEO questions has changed.
>> One of the things I'm curious about is whether the speed of business is changing the formula for how Boards and Management arrive at Strategy.
>> I think that Boards are asking questions differently. And where I've heard some Board Members, Directors that I have a great deal of respect for, the way they describe it is, you know, because of the way things are happening and because of the pace, you know, as a Board you have an opportunity to be even more helpful to the CEO by being able to help them think, to help ask those questions, to challenge you as a CEO as part of helping you to be better at what you do.
>> I think that's absolutely right. And also I think how you ask the question's very important. And 1 of the important roles that a Lead Director has is when a Board and a Company and it's Management Team is in the midst of change, is to prevent that situation from turning into an adversarial relationship between the Board and the CEO where the questions can be more challenging, more like an interrogation rather than really seeking information. And so what's required is a great deal of trust between a Board and a CEO in terms of being able to work together effectively in the midst of change, because a CEO has to be confident to be able to say I don't have all the answers. And a Board has to have a relationship to say that what I know from my experience, I can't be prescriptive, but let's talk about how we can think about the problem.
>> So how do individual Board Members contribute to Strategy Development and overseeing its execution?
>> First answer to your question is I believe Strategy Oversight is a full Board responsibility.
>> I agree.
>> Now maybe there's elements of it, you know. And to me what committees do, is they help a Board discharge its duties. But when you're talking about the overall Strategy, I really think that goes to the full Board. And I think every Director on that Board has an obligation to participate.
>> Yeah, absolutely. I think also what Directors can bring is not only the experiences that they've had in their own professional or business lives, but also their judgment. I mean basically Directors have achieved their positions not only as Directors, but within their professions or within their businesses because of their ability to look at data and information, assemble it, see the patterns, and make judgments about that. And it's helpful to have a Board that gives you basically a wide spectrum of points of view, all the way from someone who's got more experience in the industry, someone who comes at it from more of a governmental experience standpoint. But I think all Directors have the common characteristic of judgment and the ability to really assess does this all hang together and make sense.
>> So Ray and Mary Ann, I want to thank you both for being here today. On behalf of the NACD, I would like to thank you for joining us and also encourage you to look for the current issue of NACD Directorship where a conversation between Mary Ann and Ray on Strategy and Leadership is featured. I am Judy Warner and this Board Vision.
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