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Corporate Governance

Corporate strategy

Perhaps the most succinct and comprehensive definition of strategy was offered by a member of the Lead Director Network: “Strategy is answering the question, 'How are we going to beat the competition sustainably?'”

While board directors acknowledge differences in the particulars of a board’s role in strategy, they generally agree on the fundamentals:

  • Oversight of strategy is one of the board’s most critical duties.
  • Directors’ full expertise should be brought to bear in delivering this oversight.
  • Strategic oversight should be an ongoing, not episodic, activity.

With companies entering new markets, deepening existing ties to global markets, and competing with new or expanding firms, corporate strategy is increasingly focused internationally, where businesses see new growth opportunities and new risks.

Boards must understand the international risks and opportunities that are at the heart of corporate strategy. To fulfill that need, boards seek to attract, retain, and develop a group of skilled and diverse directors who are conversant in global markets and issues.

Explore this issue:

  • Strengthening the board-management dialogue on risk and strategy

    Bank directors are actively engaging with management to develop bank-specific approaches to improve risk governance and the link to strategy based on answers to fundamental questions about their firms' long-term direction, appropriate risk capacity, and resiliency under stress.

  • Engaging with strategy after the financial crisis

    Members discussed how they engage with strategy in a post-crisis, globalized business environment. The focus of their renewed strategic review is often international, where the excitement concerning impressive growth opportunities is tempered by distinctive risks. Ambassador Susan Schwab, the 15th United States Trade Representative, joined the meeting as a guest.

  • The board's role in corporate strategy

    During the financial crisis, the board's traditional level of involvement in corporate strategy increased from the remote, episodic review of the 1980s to a more continuous model of engagement. Some members predicted that the crisis would accelerate this trend.

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