Ceo - Board Relationship in Strategy Process.
-
Upload
deborahrosati -
Category
Leadership & Management
-
view
281 -
download
1
Transcript of Ceo - Board Relationship in Strategy Process.
CEO-Board relationship in Strategy Process
Deborah Rosati, FCPA, FCA, ICD.DFederated Press-Strategic Panning for Boards
March 27&28, 2014
CEO-Board Relationships in Strategy
Overview role of the board
CEO’s strategic planning responsibilities
Best practices for interaction of the Board & the CEO
Basic Strategy Model
Generate/analyze strategic
alternatives
Preliminary strategic analysis
Strategy recommendation Implementation
plan
Recommended point of engagement with
BOD
Typical point of engagement with BOD
Reference: Great Companies Deserve Great Boards by Beverly Behan
Overview role of the board
...the directors’ duty of care requires the board to provide responsible oversight of risk, and the risks associated with the context for and choices made in the strategy are among the most significant....the board must understand the strategy well enough to:
• assess the inherent risks• offer advice• influence the direction if necessary• achieve confidence that the plan is sound &warrants board approval.
validation of products/service differentiation (independent customer interviews)
competitive analysis & business model benchmarking
strategy process audit (engage strategy consultants)
major strategic initiatives (engage external experts)
external strategy validation
stress testing through financial modeling
Tools to help boards to oversee strategic risk
Overview role of the board
Is the board prepared for events that could place directors on the front line of high-stakes strategic decisions....
take-over or merger offer
unexpected loss or removal of the CEO
Crisis beyond management’s experience
CEO’s strategic planning responsibilities
Clarifying the rules of engagement on strategy
Engaging the board earlier in the strategy process
Educating the board about key business issues
CEO’s strategic planning responsibilities
Get the Board out of the Boardroom
Strategy Implementation: updates & measure
Get the Board involved earlier in the strategy process
Best practices for interaction between the Board and the CEO
3 Questions to spur high-quality engagement
1.Does the board understand the industry’s dynamics well enough?
2. Has there been enough board-management debate before a specific strategy is discussed?
3. Have the board and management discussed all strategic options and wrestled them to the ground?
Reference: McKinsey Quarterly-Strategy Practice-Feb. 2013 Tapping the strategic potential of board
Best practices for interaction between the Board and the CEO
Board’s increased involvement in strategy development.....
introduces new voices & expertise to the debate and puts pressure
leads to clearer strategies but also creates alignment necessary to make bolder moves with more confidence and to follow through by committing resources to key decisions.
Emerging best practice...
to use the Corporate Social Responsibility (CSR) lens to find better business solutions. By looking at business problems or opportunities through multiple lenses from the start, ideas sometimes emerge that satisfy multiple goals at once: (environmental impact/shareholder value/community and economic development/brand and corporate reputation/employee impact/corporate competitiveness).
Reference/resources
Great Companies Deserve Great Boards by Beverly Behan
CPA Canada, 20 Questions Directors Should ask about Strategy
McKinsey Quarterly-Strategy Practice-Feb. 2013 Tapping the strategic potential of boards
CPA Canada, A Framework for Board Oversight of Enterprise Risk
Thank-you!