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Six questions board members should ask about strategy
A board of directors is responsible for developing and implementing a company’s strategy. However, to fulfil this role effectively, board directors need to ask the right questions about strategy. So, what are the questions board members should ask about strategy? Here are six to consider.
1. What is the company’s vision and mission statement, and does the strategy support it?
A company’s vision and mission statement is the foundation of its strategy, and the board of directors should ensure that the strategy supports it.
The board should ask questions about what the company hopes to achieve, its core values, and how the strategy will help it achieve its goals. The board of directors should also ensure that the strategy is realistic and achievable and that it considers the company’s resources and capabilities.
By asking these questions, the board can help ensure that the company’s strategy is aligned with its vision and mission and has a good chance of success.
2. What are the strategy’s main goals, and are they achievable within the set timeframe?
Any company’s board of directors should be focused on the organisation’s strategy and whether it is achievable and time-based. The first question that should be asked is what are the strategy’s primary goals.
All too often, boards focus on short-term goals and objectives instead of thinking long-term about what the company wants to achieve. This can be especially difficult when there are shareholders to answer to who may want to see results sooner rather than later.
However, directors need to take a step back and consider the company’s overall goals and whether they are achievable within the timeframe that has been set out. Boards should also consider how to develop a strong company culture to support the strategy and how to measure success.
Once the goals have been identified, the board can assess whether the current strategy will likely lead to their achievement. If not, it may be necessary to reconsider the strategy or set out a new one altogether.
By taking these steps, boards of directors can guarantee that they are focused on the right things and that the company’s strategy is more likely to lead to success.
3. How will the strategy impact employees, customers, and other stakeholders?
One of the most critical questions a board of directors can ask is how the strategy will impact employees. Will it involve layoffs or job cuts? Or will it require new skills and training? What kind of impact will it have on morale and motivation?
The answers to these questions can help the board decide whether or not to support the strategy.
They should also consider how the strategy will impact customers. Will it improve customer satisfaction or cause disruptions? How will it affect the company’s reputation?
Finally, they should consider how the strategy will impact other stakeholders, such as suppliers, partners, and investors.
By asking these questions, boards of directors can better understand the potential risks and rewards associated with a given strategy.
4. Is there a risk assessment in place to identify potential roadblocks or challenges that could occur during the implementation of the strategy?
Before approving any new strategy, a board of directors must ask about the risks involved. What could go wrong during implementation? Are there any potential roadblocks preventing the strategy from being executed effectively?
By taking the time to identify these risks upfront, boards can help to ensure that their organisations are prepared to handle any challenges that might arise.
In addition to asking about risks, boards should also inquire about the resources needed to implement the new strategy. Do we have the necessary workforce? The financial resources? The equipment?
By ensuring that all of the necessary resources are in place, boards can help set their organisations up for success.
5. Who is responsible for each implementation step, and what resources will be needed to make it happen successfully?
When crafting a strategy, boards of directors must be clear about who will be responsible for executing each step of the plan and what resources will be needed to make it happen successfully.
This means clarifying roles and accountability at the outset and ensuring everyone understands their objectives. It also requires identifying potential bottlenecks or duplication areas and providing adequate resources for each stage of the process.
By asking these questions at the outset, boards can ensure that their strategy is executed effectively and efficiently.
6. What happens if the strategy fails – is there a backup plan in place?
One key question is what happens if the strategy fails. Is there a backup plan in place? What are the risks and potential impacts of failure? These are essential things to consider, as they can help identify potential problems before they occur. It is also necessary to ask how likely the strategy will succeed. What are the critical success factors? What could potentially go wrong?
By asking these questions, boards can ensure that they understand the risks and opportunities associated with the company’s strategy.
All board members should be familiar with corporate governance
- The board’s role is to provide oversight and guidance to the company, and corporate governance is a critical skill in any board of directors.
- Corporate governance includes a set of principles and practices that are designed to promote transparency, accountability, and responsibility in the way that a company is managed.
- Boards need to understand corporate governance well to make informed decisions about the company’s best interests.
- Build confidence in your corporate governance skills with the Corporate Governance Institute’s Diploma in Corporate Governance.
- This online program provides a comprehensive overview of the principles and practices of corporate governance. It is designed to help you build the skills and knowledge you need to be an effective board member.