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Berkonomics

A good board deals with what and why, not how.

Who is responsible for the vision that drives the company? This is arguably the primary job of the CEO, with agreement from the board.  Many entrepreneurs after taking outside investment defer to their board for matters of direction that include setting the vision, as well as executing the plan.

Here is a general rule:  The CEO sets the sails and points the ship, creating the vision for the company.   The board provides input into that vision, testing it against their experience and reason, and challenges it as a part of its duty to protect the shareholders and care for the corporate asset. The board then assures that management receives or has resources to affect the vision, monitoring progress at each step.

[Email readers, continue here…]  The board does not get involved in how the job is done, but rather why it should be done and perhaps when it should be completed.  Once the members, unless invited in a consulting role, involve themselves in execution of the plan, management is robbed of its principle responsibility – execution of the plan approved by the board.  When that happens, even a good CEO will pause and defer to the board before making strategic operational decisions, slowing the progress, perhaps endangering the company, by allowing competition to gain ground, and sometimes ceding some control to board members who are remote from the operation and may not be the wisest of advisors in each situation.

  • Dave this is good advice to follow throughout an organization. From the board level, to the senior team to the management team level…the wisdom applies. Once the strategic direction is set, including the “when,” it is turned over to the management team to tactically deliver the vision…including the “how”.

    Helps me to remember to be supportive, however “stay out of the way” when need be!

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