Questions boards consider
- What is the future of the organisation?
- What is the status of the industry?
- What competition does the organisation face?
- What are the future challenges to the organisation?
- What is the financial state and future state of the organisation?
- What are the legal requirements the organisation must fulfil?
While the role of the board is to develop and confirm this strategic thinking, it is then up to the management team to implement it. Therefore, a strong working relationship between the two groups is vital.
A written plan
An agreed 3–5 year strategic plan and annual operating plan are critical. Taking time out of the day-to-day business to formulate the strategic plan and commit it to paper allows organisations to focus on what is important in the long-term and what they will need to do to achieve their long-term objectives. It allows the entire organisation to have a clear vision so management can align day-to-day activities to achieve this vision so sharing this plan with the wider organisation is an important part of the planning process. It also allows the board to monitor performance both against the overall strategic plan and the annual operating plan and budget.
Getting the right information
Board papers are the most important source of information for them to understand performance against the strategy. They should link to the strategy and keep the board fully aware of the company’s position and progress. For a complete picture of the state of the company the board will normally need information covering company operating data, financial results and financial position, market and sales data, competitor activity and benchmarking and industry trends. The board will also receive detailed information in relation to capital expenditure proposals to allow it to make wise investment decisions.