Recruiting and educating a board that can add value to strategy

Abstract

Purpose

Most strategists would likely agree with the statement that company boards need to have a good understanding of corporate and business unit strategy in order to contribute to and oversee decision making. Recent McKinsey research suggests, however, that a majority of senior executives do not believe the board members adequately understand company strategy. This paper aims to investigate what is the best way to educate a board so it will be knowledgeable about strategy.

Design/methodology/approach

The paper compares and contrasts two sets of best practices for educating a board so that its members can add greater value to strategy making – advice in the current McKinsey Quarterly and that of David Nadler, author of Building Better Boards.

Findings

The paper concluded that the prescriptions of the McKinsey authors Dennis Carney and Michael Patsalos‐Fox are helpful, but consultant David Nadler offers a more comprehensive explanation in Building Better Boards.

Practical implications

Some key practices worth considering: raise strategy's profile in board work. Surprisingly no US company has a board committee devoted to the formulation and review of strategy; populate the board with at least three to four members who have industry expertise in the core business and market conditions the company faces; and reform board processes. To keep pace with change, CEOs should lead regular strategy updates at least every other board meeting.

Originality/value

By synthesizing the practical suggestions from the two sources, companies can put together a package of best practices.

Citation

Early, S. (2006), "Recruiting and educating a board that can add value to strategy", Strategy & Leadership, Vol. 34 No. 6, pp. 54-55. https://doi.org/10.1108/10878570610711305