If the CEO sets the vision, what value does the board add?

Over the last three years, I have been banging a drum: that boards of directors need to lift their game. They need to get serious about their contribution to company success. Boards hold the delegated responsibility for the overall performance of the company, in accordance with the wishes of the shareholders. Therefore, important tasks of the board would appear to include setting vision (having understood the shareholders' wishes); determining strategy; and, oversight of management to ensure that the strategy is implemented effectively. Increasingly, directors are starting to think along these lines. For example, most of the delegates on each Institute of Directors Company Directors Course that I facilitate say that the board needs to set the vision and be involved in the setting of company strategy. However, when I watch boards in action, those that spend quality time on vision and strategy seem to be in the minority.

A case in point is Microsoft. I was interested to read that Satya Nadella, the recently appointed CEO, has shared his first vision—an outline of Microsoft's direction under his leadership. His comments provide some early signals of where Microsoft wishes to head. Such guidance is helpful for staff, customers and investors. However, the article ascribes ownership of the vision to Nadella. There is no reference to the board, which is odd because the research suggests that there is a link between boards that set vision and get involved in the strategy development process, and improved company performance outcomes. This begs a rather obvious question: If Nadella and his managers are setting vision and strategy, what role is the Microsoft board performing (apart from adding cost)? Microsoft has a long and proud history of innovation, yet the very group charged with realising the wishes of the shareholders—the board—appears to be silent and adding no value. Could this be the case? I hope my assessment is wrong.