CICA 20 QUESTIONS Strategy - Institute of Chartered Accountants ...

With respect to ‘insight’, directors are there to add their experiencesand wisdom, not to second-guess management, but to supplement andenhance executive decision-making.As for ‘foresight’, the directors arethere to provide a perspective on the future that helps managementidentify those opportunities that are most worth pursing.Notwithstanding these traditional functions, the role of the Board ofDirectors is now changing (largely to compensate for recently identifieddeficiencies in Board corporate governance).This new role requiresdirectors to be much more active participants in the ‘high-level’ affairsof the organization. It requires them especially to be "constructivelyinvolved" in the development and approval of the organization’sstrategy. One way for this constructive involvement to beoperationalized is presented in Appendix 1.These new divisions ofresponsibility require a corporate culture and climate of mutualrespect and trust between the Board and senior management.The participation of directors in strategy must be seen ascooperative rather than adversarial.At the core of constructive involvement is the role that directorsperform through the questions they ask. By asking questions, directorsdetermine both the degree to which the corporation is charted on aproper course and whether it is being properly managed. But not justany questions will do. Directors need to ask the right questions ifthey are to perform their duties as engaged participants in helping thecompany find a future direction that ensures its long-term competitivesurvival. Indeed, doing so is the essence of all strategic planning effortsand the winning strategies that such planning efforts aspire to produce!While the process of developing an organization’s strategy requiresmanagements and boards to consider a wide range of stakeholders(including employees, customers and communities, etc.), whoseresponse to the strategy may be critical to the organizations’ success,Boards should always remember that their primary responsibility isto the owners (shareholders, members etc.) of the organization.“No wind favors the ship thathas no charted course.”Anon