So you’ve been elected to a position on a Board. Congratulations! Now, take a deep breath, a seat in a comfy chair and take a few moments to understand what is one of the most important responsibilities of your Board.
You are now a part of a select group of individuals who is ultimately responsible for the governance of your organization.
Firstly, what’s a good blog without some well-chosen quotes!
Terry Kilmister of BoardWorks International defines governance as:
“The exercise of establishing and monitoring necessary controls and strategic direction setting so that the organization is equipped to respond to the changing circumstances and situations in the external and internal environments in order to meet the expectations and demands of the owners and other stakeholders”
Speaking directly to the process of strategic planning, Henry Bosch. ‘The Director at Risk.’ Melbourne: Pitman Publishing, 1995 said:
“The board’s first responsibility is to ensure that the organization has clearly established goals; objectives and strategies for achieving them; that they are appropriate to the circumstances and that they are understood by management.”
Now that we’ve established the relationship between governance, strategic planning and the board, lets explore the role of the board a little further.
The Board develops the strategic direction and plan in partnership with the CEO and staff of the organization and select key stakeholder groups. Regardless of how the plan is developed, it is ultimately ‘owned’ by the board. Once adopted, only the board, in consultation with the CEO, can alter the goals and long-term targets.
The process of creating the initial strategic planning content and the ongoing adjustments made to these ‘high level’ planning elements in response to the operating environment is referred to as strategic thinking. The board should routinely spend time conducting systematic strategic reviews during board meetings to ensure the plan remains contemporary.
All further plans, often referred to as ‘Operations Plans’ should be consistent with the strategic direction and ideally create links that cascade down from the organizations goals and long term targets. We call these Cascading or Lineal plans.
The development of these ‘lower planning elements’, (operations plans), is the responsibility of the CEO and their executive team. Having established these ‘boundaries’ the board should play no part in developing operational plans. The board should however constantly evaluate progress made towards the achievement of the desired outcomes defined in the higher ‘strategic’ elements of the plan.
Strategic planning is central to organizational direction setting and arguably the most important responsibility of the Board. Done correctly with the ability to engage staff, respond to changes and monitor progress, an organization will move forward as a united team.