The Crucial Link Between The Board And Strategic Plans
The word ‘Strategy’ was rooted from the Greek work ‘Strategia’, which means ‘Generalship’ or ‘The art of leading an army’. Hence, it is not surprising that, in the dynamic and competitive world of business, strategic planning plays a pivotal role in shaping the direction of organisations. However, it cannot be overstated how crucial the link between the board of directors, the leaders of the ‘corporate army’, and the development and execution of strategic plans is. This article explores the significance of this connection and highlights the key role that boards play in driving organisational success through effective strategic planning.
Setting the Strategic Direction
The board of directors plays a fundamental role in setting the strategic direction of an organisation. They work closely with top management to define the company’s mission, vision, and long-term goals. By providing guidance and oversight, the board ensures that strategic plans align with the organisation’s values, objectives, and the ever-evolving business landscape. They bring a broader perspective and help shape the strategic direction by considering various stakeholders and market trends.
Ensuring Accountability and Oversight
Accountability and oversight are vital components of effective strategic planning. Boards are responsible for ensuring that strategic plans are well-defined, realistic, and aligned with the organisation’s resources and capabilities. They monitor progress, evaluate performance, and hold management accountable for achieving strategic objectives. By providing oversight, boards help mitigate risks and ensure that strategic plans remain on track. They also play a crucial role in ensuring transparency and ethical conduct throughout the strategic planning process.
Leveraging Expertise and Experience
Boards consist of individuals with diverse backgrounds, expertise, and experience. This collective wisdom is an asset when it comes to strategic planning. Board members bring a fresh perspective and challenge management’s assumptions, fostering critical thinking and innovation. Their expertise in various fields allows them to provide insights and guidance that can shape strategic plans and enhance decision-making processes. By tapping into the knowledge and experience of board members, organisations can gain a competitive edge and adapt to changing market dynamics more effectively.
Driving Organisational Change
Strategic plans often involve significant organisational change, such as entering new markets, adopting new technologies, or restructuring operations. Boards play a vital role in driving and supporting these changes. They provide leadership and advocate for the necessary resources and investments to implement strategic initiatives. Additionally, boards can leverage their networks and relationships to facilitate partnerships and collaborations that align with the organisation’s strategic goals. By actively driving organisational change, boards help ensure that the organisation remains agile and responsive to emerging opportunities and challenges.
Enhancing Stakeholder Confidence
Effective strategic planning, supported by a strong board, enhances stakeholder confidence. Shareholders, employees, customers, and other stakeholders rely on the board’s oversight and strategic direction to make informed decisions regarding their engagement with the organisation. A well-defined and communicated strategic plan, developed in collaboration with the board, instills trust and confidence in the organisation’s ability to achieve its goals, adapt to market changes.
Conclusion
The link between the board of directors and strategic plans is extremely crucial for organisational success. Boards, as the captains of the ‘corporate ship’, provide strategic direction, ensure accountability, leverage expertise, and drive organisational change. By actively participating in the strategic planning process, boards contribute to the long-term viability and growth of the organisation. Recognising the importance of this link and fostering effective collaboration between the board and management is essential for organisations to thrive in today’s complex business environment.
References
Hermanson, D. R., Tompkins, J. G., Valiyath, R., & Ye, Z. (2020). Strategic planning committees on U.S. public company boards: Axiomatic or paradoxical? Long range planning.
Morrill, R. (2013). Collaborative strategic leadership and planning in an era of structural change: highlighting the role of the governing board. Peer Review.
Stiles, P., & Taylor, B. (1996). The Strategic Role of the Board. Corporate Governance: An international Review.