{"id":2342,"date":"2022-10-12T14:06:24","date_gmt":"2022-10-12T13:06:24","guid":{"rendered":"https:\/\/www.praxonomy.com\/blog\/?p=2342"},"modified":"2022-10-12T14:14:20","modified_gmt":"2022-10-12T13:14:20","slug":"the-boards-role-and-impact-on-strategic-management","status":"publish","type":"post","link":"https:\/\/www.praxonomy.com\/blog\/the-boards-role-and-impact-on-strategic-management\/","title":{"rendered":"The Board\u2019s Role and Impact on Strategic Management"},"content":{"rendered":"\n<p>The impact of the board on strategic management might seem obvious. But there can be areas of ambiguity specifically surrounding its role in the crafting of strategy and how it should be managed. This is because it can overlap with management\u2019s strategic functions.<\/p>\n\n\n\n<p>In this article, we:<\/p>\n\n\n\n<ul><li>clarify the board\u2019s role in strategic planning and implementation<\/li><li>provide ideas on how strengthen the partnership with management<\/li><\/ul>\n\n\n<style>.wp-block-kadence-advancedheading.kt-adv-heading_325209-a7, .wp-block-kadence-advancedheading.kt-adv-heading_325209-a7[data-kb-block=\"kb-adv-heading_325209-a7\"]{font-style:normal;}.wp-block-kadence-advancedheading.kt-adv-heading_325209-a7 mark, .wp-block-kadence-advancedheading.kt-adv-heading_325209-a7[data-kb-block=\"kb-adv-heading_325209-a7\"] mark{font-style:normal;color:#f76a0c;padding-top:0px;padding-right:0px;padding-bottom:0px;padding-left:0px;}<\/style>\n<h2 class=\"kt-adv-heading_325209-a7 wp-block-kadence-advancedheading\" data-kb-block=\"kb-adv-heading_325209-a7\"><strong>1. Board vs. Management: Role and Impact on Strategic Planning and Implementation<\/strong><\/h2>\n\n\n<style>.wp-block-kadence-advancedheading.kt-adv-heading_2dff53-46, .wp-block-kadence-advancedheading.kt-adv-heading_2dff53-46[data-kb-block=\"kb-adv-heading_2dff53-46\"]{font-style:normal;}.wp-block-kadence-advancedheading.kt-adv-heading_2dff53-46 mark, .wp-block-kadence-advancedheading.kt-adv-heading_2dff53-46[data-kb-block=\"kb-adv-heading_2dff53-46\"] mark{font-style:normal;color:#f76a0c;padding-top:0px;padding-right:0px;padding-bottom:0px;padding-left:0px;}<\/style>\n<h3 class=\"kt-adv-heading_2dff53-46 wp-block-kadence-advancedheading\" data-kb-block=\"kb-adv-heading_2dff53-46\">a.) Two schools of thought for the development of the strategic plan<\/h3>\n\n\n\n<p>There are two prevailing schools of thought when it comes to developing the <strong>strategic plan<\/strong> of the organisation. The first one advocates for the board of directors to set it. The second requires management to develop the strategic plan and for the board to approve it.<\/p>\n\n\n\n<p>There is no right answer for how it should be done. As always, context is important: companies who are about to embark on a wide-scale, transformational strategic plan might require hands-on board involvement. But an organisation with highly-experienced, capable executives might take on the task of laying down the strategic framework, engaging the board, and presenting the strategic plan for approval.<\/p>\n\n\n\n<p>The issue that all parties should agree on, however, is that there needs to be a plan. Organisations should choose and decide on the approach that suits them best.&nbsp;<\/p>\n\n\n\n<p>What is clearer, however, is that<strong> strategic conversations<\/strong> will often ultimately end up under the purview and ownership of the board of directors \u2014 regardless of how the strategic plan was initially conceived and developed. When it comes to strategic direction, it is the board who must be prepared to field questions from shareholders, regulators, and other stakeholders.<\/p>\n\n\n<style>.wp-block-kadence-advancedheading.kt-adv-heading_2d535b-b5, .wp-block-kadence-advancedheading.kt-adv-heading_2d535b-b5[data-kb-block=\"kb-adv-heading_2d535b-b5\"]{font-style:normal;}.wp-block-kadence-advancedheading.kt-adv-heading_2d535b-b5 mark, .wp-block-kadence-advancedheading.kt-adv-heading_2d535b-b5[data-kb-block=\"kb-adv-heading_2d535b-b5\"] mark{font-style:normal;color:#f76a0c;padding-top:0px;padding-right:0px;padding-bottom:0px;padding-left:0px;}<\/style>\n<h3 class=\"kt-adv-heading_2d535b-b5 wp-block-kadence-advancedheading\" data-kb-block=\"kb-adv-heading_2d535b-b5\">b.) The role of the board in strategic management<\/h3>\n\n\n\n<p>The board can be involved in strategic activities in a number of ways, including:<\/p>\n\n\n\n<ol><li>Ensuring the strategic plan is aligned with the company\u2019s mission, vision, and culture and that they allocate the resources to support it<\/li><li>Including the periodic review and re-evaluation of strategy in the board meeting agenda<\/li><li>Tracking management\u2019s process on strategy execution through defined Key Performance Indicators (KPIs)<\/li><li>Identifying and assessing risk thresholds that impact the company\u2019s long-term strategic plan<\/li><li>Providing feedback or asking management questions on issues relating to the execution of the plan<\/li><li>Explaining how key <a href=\"https:\/\/www.pwc.com\/us\/en\/governance-insights-center\/publications\/assets\/pwc-the-boards-role-in-strategy-getting-the-process-right.pdf\" target=\"_blank\" rel=\"noreferrer noopener\">\u201cdecisions directly link to strategy, [such as] why investing in certain technologies will help with growth, how ESG issues play a role in the long term-value creation plan\u2026.and how the company\u2019s executive compensation plans incentivise the achievement of strategic goals.\u201d<\/a><\/li><\/ol>\n\n\n<style>.wp-block-kadence-advancedheading.kt-adv-heading_949655-19, .wp-block-kadence-advancedheading.kt-adv-heading_949655-19[data-kb-block=\"kb-adv-heading_949655-19\"]{font-style:normal;}.wp-block-kadence-advancedheading.kt-adv-heading_949655-19 mark, .wp-block-kadence-advancedheading.kt-adv-heading_949655-19[data-kb-block=\"kb-adv-heading_949655-19\"] mark{font-style:normal;color:#f76a0c;padding-top:0px;padding-right:0px;padding-bottom:0px;padding-left:0px;}<\/style>\n<h3 class=\"kt-adv-heading_949655-19 wp-block-kadence-advancedheading\" data-kb-block=\"kb-adv-heading_949655-19\">c.) The role of management in strategic management<\/h3>\n\n\n\n<p>Senior leadership \u2014 or the CEO\u2019s role, in particular \u2014&nbsp; is more tactical in nature. It involves:<\/p>\n\n\n\n<ol><li>Accountability for the execution of strategic plans<\/li><li>Articulating the organisations\u2019 overall strategic story to internal and external stakeholders<\/li><li>Reporting on progress towards the board\u2019s strategic priorities, major initiatives and projects, and other board-level matters<\/li><\/ol>\n\n\n<style>.wp-block-kadence-advancedheading.kt-adv-heading_8900be-22, .wp-block-kadence-advancedheading.kt-adv-heading_8900be-22[data-kb-block=\"kb-adv-heading_8900be-22\"]{font-style:normal;}.wp-block-kadence-advancedheading.kt-adv-heading_8900be-22 mark, .wp-block-kadence-advancedheading.kt-adv-heading_8900be-22[data-kb-block=\"kb-adv-heading_8900be-22\"] mark{font-style:normal;color:#f76a0c;padding-top:0px;padding-right:0px;padding-bottom:0px;padding-left:0px;}<\/style>\n<h2 class=\"kt-adv-heading_8900be-22 wp-block-kadence-advancedheading\" data-kb-block=\"kb-adv-heading_8900be-22\"><strong>2. COLLABORATING WITH MANAGEMENT ON STRATEGIC ACTIVITIES<\/strong><\/h2>\n\n\n\n<p>Strategic planning, management and implementation can be a complex, ongoing, and evolving process. Collaboration is key. As boards provide management with guidance regarding the overall direction of the company, it needs to keep the board apprised of its progress. There has to be alignment between the parties, otherwise the activities and long-term objectives of the organisation become muddled.<\/p>\n\n\n<style>.wp-block-kadence-advancedheading.kt-adv-heading_86353e-35, .wp-block-kadence-advancedheading.kt-adv-heading_86353e-35[data-kb-block=\"kb-adv-heading_86353e-35\"]{font-style:normal;}.wp-block-kadence-advancedheading.kt-adv-heading_86353e-35 mark, .wp-block-kadence-advancedheading.kt-adv-heading_86353e-35[data-kb-block=\"kb-adv-heading_86353e-35\"] mark{font-style:normal;color:#f76a0c;padding-top:0px;padding-right:0px;padding-bottom:0px;padding-left:0px;}<\/style>\n<h3 class=\"kt-adv-heading_86353e-35 wp-block-kadence-advancedheading\" data-kb-block=\"kb-adv-heading_86353e-35\">a.) The value of board and management strategy sessions<\/h3>\n\n\n\n<p>Dedicated annual strategy sessions (outside of board meetings) can be extremely helpful to \u201creview and refresh aspects of the strategic plan and risk appetite\u201d of the organisation. These sessions can be a venue to reflect upon the current position of the company and evaluate it against prevailing market opportunities and threats, competition, and the current regulatory landscape. It facilitates a dialogue between management and the board to determine if any strategic levers have to be tweaked or recalibrated.<\/p>\n\n\n<style>.wp-block-kadence-advancedheading.kt-adv-heading_1df7dd-b6, .wp-block-kadence-advancedheading.kt-adv-heading_1df7dd-b6[data-kb-block=\"kb-adv-heading_1df7dd-b6\"]{font-style:normal;}.wp-block-kadence-advancedheading.kt-adv-heading_1df7dd-b6 mark, .wp-block-kadence-advancedheading.kt-adv-heading_1df7dd-b6[data-kb-block=\"kb-adv-heading_1df7dd-b6\"] mark{font-style:normal;color:#f76a0c;padding-top:0px;padding-right:0px;padding-bottom:0px;padding-left:0px;}<\/style>\n<h3 class=\"kt-adv-heading_1df7dd-b6 wp-block-kadence-advancedheading\" data-kb-block=\"kb-adv-heading_1df7dd-b6\">b.) How board management software supports strategic management<\/h3>\n\n\n\n<p>As boards work closely with CEOs and senior executives on strategy, both parties will need to have access to technology that will allow them to collaborate securely and efficiently, in between board meetings or strategy sessions.&nbsp;<\/p>\n\n\n\n<p>This is where board management software \u2014 or <a href=\"http:\/\/www.praxonomy.com\/board-portal\" target=\"_blank\" rel=\"noreferrer noopener\">board portals<\/a> \u2014 can help.<\/p>\n\n\n\n<p>A board portal, such as <a href=\"http:\/\/www.praxonomy.com\" target=\"_blank\" rel=\"noreferrer noopener\">Boardlogic<\/a>, is a highly-secure, centralised hub that manages board-level meeting workflows, documents, and activities. It is also an effective, seamless communication platform where board members and executives can collaborate, communicate, and sign-off on documents <a href=\"https:\/\/www.praxonomy.com\/blog\/board-portal-communications-vs-email-and-pdfs\/\" target=\"_blank\" rel=\"noreferrer noopener\">devoid of the risks associated with using email and PDFs for board-level communication.<\/a><\/p>\n\n\n\n<p>Note that the files, documents, and conversations between board members and executives can contain sensitive information such as trade secrets, confidential competitor information, strategic product roadmaps, etc., all of which \u2014 if compromised \u2014 can affect the company\u2019s performance and reputation. From this security standpoint, there is much at stake. With the use of a board portal, <a href=\"https:\/\/www.praxonomy.com\/security\" target=\"_blank\" rel=\"noreferrer noopener\">data is kept private and secure<\/a>. <\/p>\n\n\n\n<p>Unlike <a href=\"https:\/\/www.praxonomy.com\/blog\/reasons-why-team-collaboration-software-cant-replace-board-portals\/\" target=\"_blank\" rel=\"noreferrer noopener\">mass collaboration tools and platforms such as Google Workspace or Microsoft Sharepoint\/Teams<\/a>, it supports the unique workflows of boards and their collaborative process with senior executives. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>To sum it up<\/strong><\/h2>\n\n\n\n<p>The PwC paper linked to above highlights the role and impact of the board in setting forth the organisation\u2019s strategic direction:<\/p>\n\n\n\n<p>\u201cIt\u2019s important [for directors] to outline the company\u2019s plan for today, as well as its plan for where it wants to go \u2014 the company\u2019s optimisation and reinvention stories.\u201d<\/p>\n\n\n\n<p>But these stories will not be set in motion without management.&nbsp;<\/p>\n\n\n\n<p>Boards and management need to work lock-step to ensure the organisation\u2019s strategic objectives are met. Strategy is a long-game, and effective collaboration leads to a tale of success.<\/p>\n<!-- AddThis Advanced Settings generic via filter on the_content --><!-- AddThis Share Buttons generic via filter on the_content -->","protected":false},"excerpt":{"rendered":"<p>We discuss the board&#8217;s \u2014 and management&#8217;s \u2014 role in strategic management and the impact of collaborative tools on strategic planning, oversight, and success.<!-- AddThis Advanced Settings generic via filter on get_the_excerpt --><!-- AddThis Share Buttons generic via filter on get_the_excerpt --><\/p>\n","protected":false},"author":2,"featured_media":2343,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[5],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.4 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>The Board\u2019s Role and Impact on Strategic Management - Praxonomy Blog<\/title>\n<meta name=\"description\" content=\"Learn about the board&#039;s role in strategic management. 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