The Board’s Role in Strategic Management1
Twenty years ago, boards of directors might have rubber-stamped their CEO’s strategic plan without involving itself in significant ways in its formulation. They were often content with rewarding profitability or mopping up after the occurrence of losses—all based on a rear-view mirror perspective of financial performance. The GM bailout, the global financial crisis, the BP oil spill and similar debacles clearly demonstrate that a hindsight view is not good enough to avoid catastrophes from occurring. That requires more meaningful involvement up front in “strategic planning.” Only when strategy involved acquisitions and mergers to accomplish growth, boards historically were deeply ...
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