Board Affairs

Understanding the role of the board in value addition

What is the role of the Board?

The board’s mandate is to provide strategic guidance that includes strategic direction and strategic oversight. Strategic direction is to identify the strategic bullseye – the ambition of the organization. While strategic oversight is about risk management and compliance for effective monitoring and control. A strategy is a plan of action designed to achieve one or more overarching long-term organizational goals and aims. For the board, you need to focus more on the process and not the outcome. It is important to note that plans are nothing. Planning is everything. So, having a strategic plan is not the end of the story. The real work is in the implementation. The board must understand the planning process so that you don’t stop at the planning process.

What is the board’s strategic mandate?
  1. Drive the growth of the organization and set its strategy
  2. Providing strategic direction for the organization i.e. identifying the vision, mission, and goals.
  3. Setting the strategic agenda through a clear corporate strategy
  4. Providing strategic oversight especially monitoring strategy implementation

To win you must stretch and also win against something. That is the vision. What is your vision? The board must define the vision clearly. As leaders, we must examine our vision for its validity. Is it still relevant? Is the vision abstract or clear to everyone? As an organization, we are in this to win. Running a business is like participating in a competitive game like a marathon. Every player goes in to win. So, who are you winning against? Those who win have clarity of who to win against? The board must keep management on its toes. But how does it do it?

To provide strategic guidance, the board helps in the following:

  1. Ensure planning involves key stakeholders to achieve consensus, e.g. transformation vs incremental stratey, new products, etc.
  2. Mission to drive the vision – neither static aspiration nor mirage
  3. Strategic plan for effectiveness to adopt to emerging strategies The board must challenge management to implement the strategy. This means that all stakeholders must have been involved in its documentation.

Take an example of a competitive football game in action. For that particular game, the Board is the football manager. During the match, the manager sits on the football pitch and watches the players – carefully observing which player is walking, where they should have been running? The player making lousy passes costing the team dearly. Which player is doing the best or which one is in a wrong spot? Any player not delivering to expectations is identified instantly and substituted.

How does the board gain clarity of the business just like a football manager gains clarity of the team and makes an instant decision? Ideally, the CEO should have a clear presence in the players’ on-going.

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