Strategy, Performance Measurement, and Risk Management

As we mentioned in Chapter 3, the Organisation for Economic Co-operation and Development (OECD) states that one of the primary responsibilities of the board is to “ensure the strategic guidance of the company.” The UK Corporate Governance Code recommends that the board “establish the company’s purpose, values and strategy, and satisfy itself that these and its culture are aligned.”1 Survey data from the National Association of Corporate Directors (NACD) indicates that directors consider strategic planning and oversight to be their most important responsibility—more than financial oversight, CEO succession planning, compensation, and shareholder relations.2

Consensus holds that strategic ...

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