A friend who serves on a number of consequential public company boards came to my office not long ago to ask my opinion on something that had become a contentious issue across his boards. The question: What is the proper role of a board with respect to company strategy?
The Board’s Role in Strategy
If board members think setting strategy is their job, they should probably fire the CEO.
December 28, 2018
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Summary.
What is the proper role of a board with respect to company strategy? On some boards, the prevailing view is that strategy is their job. On others, the prevailing view is the extreme opposite: their job is to wait for management to come forward with its strategy and to either approve it or not. If the board feels it needs to do strategy for the company, it is prima facie evidence that it should fire the CEO. If a board that meets just a few days a year can do a better job of setting strategy than the CEO who is in the business 24/7, then the board has the wrong CEO. The right approach is an iterative process in which the CEO is in charge, because it is the CEO’s job to formulate strategy, but the CEO wisely gets the maximum amount of advice from the board – assuming that the board has useful insights.
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New!
HBR Learning
HBR Learning
Strategy Planning and Execution Course
Accelerate your career with Harvard ManageMentor®. HBR Learning’s online leadership training helps you hone your skills with courses like Strategy Planning and Execution. Earn badges to share on LinkedIn and your resume. Access more than 40 courses trusted by Fortune 500 companies.
How to develop a winning strategy—and put it to work.