In an extensive report on the challenges facing organizations last year, Deloitte outlined the question of strategy and the board’s role in questioning and shaping it. While many strategy skeptics claim that organizations should focus on flexibility and adaptability in today’s volatile economic and political climate, Deloitte’s report writers argued that strategy is more important than ever in order to create a coherent response to sudden changes. The board’s responsibility is to question management’s strategy and task management with rethinking areas of the plan that come up short, not taking a heavy hand in actually strategizing. However, it is necessary for directors to demand strategies as well as assessments of their risks, costs, and opportunities.
One of the report’s strongest recommendations was accurately evaluating the risks of maintaining the status quo and questioning management’s plans accordingly. It’s important that boards know how to probe management’s strategies, to expose shortcomings, and direct them to rethink their plan.
1. Ask if the organization has a plan and the resources to reach its goals, including an executive team and workforce with the skills to meet the challenges posed by today’s environment. If the organization’s resources come up short, is there a plan in place to acquire them?
2. Evaluate the organization’s attitude toward risk: is it too risk averse to become adaptable, or is the risk appetite so great that the organization is in danger of making a false step?
3. Are management and directors seeing eye to eye when it comes to strategy, and is the discussion between these two levels productive?
Boards need all of the tools at their disposal to engage with management effectively, which is why many are turning to technological solutions to solve communication problems. Board portals like Aprio have streamlined the way directors prepare for board meetingsand communicate with each other between meetings. By enabling out-of-meeting collaboration, discussion, quick access to archived materials, and even voting, portals are anessential technology for creating well-informed consensus and getting members “on the same page.”
It’s essential for directors to speak with unity and clarity when dealing with management, but equally important that dissenting opinions or criticism are not simply buried or never voiced. Survey and review tools offered by portals like Aprio make it possible to identify issues that need further debate and for chairpersons to hear unprejudiced criticisms. Features that track education requirements and make visible which users have accessed a document improve accountability and keep members informed and educated.
Organizations that struggle with good governance and effective relationships between management and the board should evaluate where the difficulties begin. Some of the solutions available at Aprio.net can help organizations solve communication problems between administrators and directors so that directors are better able to hold management accountable to the organization’s values and goals. Deloitte claimed only last year that strategy is more important than ever, and it’s the responsibility of an organization’s directors to knowledgeably question that strategy. Over the past several years, commentators have been using the term “VUCA World” (volatile, uncertain, complex, and ambiguous) to describe the challenges facing corporate, non-profit, and governmental organizations. Organizations that are guided by values and aspirations require clarity and agility to face volatility and uncertainty, and that requires clear, fast communication between an organization’s leaders.