Running head: BOARD INVOLVEMENT IN STRATEGY DEVELOPMENT

Board Involvement in Strategic Involvement

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Institution of Affiliation
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Board Involvement in Strategic Involvement

Organizations assign the role of strategy development to executives. However, the board

of directors could bolster the organization’s strategic competitiveness by getting more involved

in the strategic development, implementation, and oversight. This involvement in strategy varies

depending on the environment and context that the company works in. The increased

involvement of the board would broaden the skills and expertise applied in a firm. (Judge and

Talaulicar, 2017). In an ever-changing environment, an organization would do better with a

board that strategically helps the senior leadership manage the daily business activities. The

board can articulate corporate governance by formulating specific guidelines to enhance the

balancing of expectations of the firm’s stakeholders.

The board’s involvement would also promote accountability as the CEO would not

execute strategies based on his sole judgment but rather on the collective decision made by the

board. It ensures that a company remains to be stable even after the resignation or change of the

CEO. Inadequate involvement of the board could bring problems in the strategic competitiveness

of a company, as seen in Enron, which was one of the largest and most admired corporations in

the United States. When Jeff Skilling, the company’s CEO, resigned, one of the biggest

bankruptcy in U.S. history unfolded. The board of directors was heavily criticized for lack of

oversight, and the Sarbanes Oxley legislation was enacted to increase board involvement in the

strategic affairs of companies (Hendry and Kiel, 2004). However, the board ought to maintain an

optimum level of strategic control to avoid excessive involvement and being counter-productive.

In a study done by Saleem and Zafar (2017), it emerged that there is at least one board member

in all Fortune 500 firms that try to micromanage the senior executives, thereby jeopardizing

proper strategy development and implementation. Therefore, board involvement can be

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beneficial or counter-productive to an organization’s strategic competitiveness based on the

scope of participation.
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References

Hendry, K., & Kiel, G. C. (2004). The role of the board in firm strategy: Integrating agency and

organizational control perspectives. Corporate Governance: An International Review,

12(4), 500-520.

Judge, W. Q., & Talaulicar, T. (2017). Board involvement in the strategic decision making

process: A comprehensive review. Annals of Corporate Governance, 2(2), 51-169.

Saleem, I., & Zafar, J. (2017). Boards that lead: when to take charge, when to partner, and when

to stay out of the way. Pakistan Business Review, 18(4), 1063-1068.