The role of the board and management in developing strategy

One of the topics at a recent governance workshop we delivered to the sport and recreation industry on behalf of the Department of Local Government, Sport and Cultural Industries looked at the respective roles of the board and management in developing an organisations strategy. At one extreme is a primarily management driven strategy with limited board involvement while the other end is a predominantly board driven approach. We asked the audience to think about their own boards and as expected, there was a diverse range of responses from about 80% management driven to 80% board driven. Pleasingly everyone reported some level of involvement from either party.

So what is the right mix? Well the exact mix will be different for each organisation however an iterative approach that involves both the board and management is likely to deliver the best outcome. While the board is ultimately responsible and accountable for the organisations strategy and subsequent performance, the CEO should be the key driver and use the board to test ideas, gain advice and insights and present different possibilities for feedback from the board.

In the not-for-profit environment, boards that have a diversity of skills, age, gender, background, experience etc. will be best placed to help test and challenge the ideas and strategies that are presented by the CEO. By working closely throughout the process, a strategy that is developed with a board and CEO in alignment will provide everyone with a clear understanding of the key challenges and how they are to be addressed.

If you have any thoughts on this or would like to share your experience of how you have seen the board and management work together in developing strategy please let me know.