The NYSE has just published the results of its 12th annual director survey. The survey, conducted by Spencer Stuart, makes for interesting reading. For example, strategy and performance features as a "perennial concern" of respondents—directors claim a strong interest in strategy. However, the responses do not bear this out. When asked to identify board actions that are critical to company performance, the top six responses from directors were:
Do you notice anything unusual these responses? Apart from reviewing the strategic plan (presumably developed by management), none are practices of strategic management at all! If the board is responsible for business performance, why isn't it directly involved in the development of strategy, or monitoring strategy implementation, or verification of business performance goals? Why don't these elements, which are crucial to any influence the board might exert on business performance (watch for my forthcoming research), feature at all?
Directors say they know strategy and performance is important. That's clear. So why, when directors are asked specifically, do 'monitor' and 'control' activities feature more highly? Ouch! Why are some director's actions inconsistent with their claims?
Thoughts on corporate governance, strategy and boardcraft; our place in the world; and other topics that catch my attention.