The Board's role in Value Creation

In the last couple of days, I've been involved in a very significant discussion with a panel of governance experts from three countries (Canada, USA, New Zealand). We've been exploring the notion of value creation and the role that boards of directors could (should?) be playing in creating value and building wealth. This has been a timely discussion, because it has come not long after my latest research piece which explored this very topic! So, what role should governance boards play in value creation and the development of strategy? Here's a summary of the three main insights from my research:

• Company performance and the level of board involvement in strategy development appear to be linked (active involvement is better)
• The quality of strategic boardroom decisions are highest when proposals are directly linked to agreed strategy
• An open and direct communications style amongst directors (including vigorous debate) is conducive to effective decision-making
  

I expanded on these points in the group discussion so won't bore you here. Suffice to say, the Board and executive management should work together to identify and agree core purpose (what and why), goals (metrics to measure progress) and strategic imperatives (the big things to be done to achieve the core purpose). Why is doing this together important? It helps with buy-in, with alignment, with the speed and quality of decision-making and, crucially, with the Board taking an active (and accountable) role in creating and building value.

The panel explored a wide range of related topics, some of which are country-specific. You can read the full discussion here (it's a long and rich discussion—86 posts—but well worth the read). If you'd like to discuss this topic further, or explore how to improve value creation in your context, please contact me.