Governance Challenges 2020: The Board’s Role in Strategy Development and Execution
In brief: While strategy creation is in the hands of management, the board has an important role to play in approving, monitoring, and correcting the course of the company’s strategy. Yet more than 60 percent of public and private company directors say they want to improve their oversight of both strategy development and execution.
To help our members solve this challenge, NACD has produced the 2020 edition of Governance Challenges in collaboration with our five strategic-content partners—Heidrick & Struggles, the KPMG Board Leadership Center, Marsh & McLennan Companies, Pearl Meyer, and Sidley Austin LLP. The board’s role in strategy remains a key fiduciary duty that may require more time and conversation than in prior years due to the increasing complexity of businesses, emerging risks, and a new post-coronavirus operating environment. Directors should use the tools within this document to help them to transition the company’s strategy from the “old normal” to the new.
Boards can use this resource to:
- Enhance strategic oversight through board-meeting process, composition, and culture.
- Facilitate boardroom conversations on strategy through challenging underlying assumptions, aligning the work of committees, and recalibrating as conditions change.
- Improve the board’s agility during a crisis, and use that agility to adapt the long-term company strategy.
- Identify how the board can successfully move strategic business goals forward with compensation plans.
- Evaluate the company’s strategy like an activist, and challenge management’s assumptions underpinning the company’s prevailing wisdom.
Most relevant audiences: Board chairs/lead directors, CEOs, general counsel, compensation committee members, nominating and governance committee members, risk committee members