What's the board's role in strategy development?: A strategic reference framework for the board

Authors: Jonk, Gillis J; Schaap, Jan

Source: Strategy and Leadership, Volume 32, Number 5, 2004 , pp. 38-44(7)

Publisher: Emerald Group Publishing Limited

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Abstract:

Advice for senior management and board members on how to properly assess the future value creation potential of the company through strategic plans and initiatives. The number and variety of complex strategic maneuvers - such as, outsourcing, off-shoring, supply chain pooling, contract manufacturing, co-developing, co-branding, co-marketing, licensing and joint ventures - strains the existing strategic corporate governance processes at most firms. The risks of these long-term initiatives cannot be captured in quarterly performance data. Corporate governance would be made more effective by defining explicit ways the board could use to evaluate new strategic opportunities and new sources of business risk. An innovative but practical solution is to create a strategic reference framework for the businesses segments. Executives and boards would turn to the framework to quickly evaluate strategic initiatives and assess strategic business risk in much the same way as they use financial reference frameworks to evaluate financial performance.

Keywords: Senior Management; Corporate Strategy; Market Value; Management Accountability

Document Type: Research article

DOI: http://dx.doi.org/10.1108/10878570410557651

Publication date: 2004-05-01

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