The role of the board of directors in strategic management can vary according to

Question

The role of the board of directors in strategic management can vary according to their involvement with management and other people in an organisation. They also play a role in the strategy-making process for the companies and shareholders. Below is some role that performs by these type of boards:

Approval of the corporate budget and resource allocation for strategic investment.

Periodic review of the strategic planning process.

Monitoring the chief executive’s role in the strategic management process.

To trigger a discussion on growth possibilities and alternatives.

Guiding the chief executive in formulating organisation level strategies.

Review of strategy implementation with respect to result or profitability.

Do you agree with these above mentioned or you would say they have more complex decisions to deal with?

Explanation / Answer

In adddtion to the roles mentioned above, the board of directors has follwing roles to play in running the organisation.

1. Use of collective expertise ( They are from various backgrounds and have experience in different domains) to tackle strategic issues faced by the company and come up with most appropriate solutions.

2. Safeguarding the interests of the shareholders by formulating, monitoring and correcting the policies as needed.

3. Ensuring complaince with the regulations and law of the land to prevent the violations and subseqent legal issues.

4. To act as watchdog of ethical practices within the company and intervene if needs arise.

5. To cast their vote and express their opinion with regards the strategic issues that affect the organisation significantly.

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