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What strategies can be employed to encourage boards to focus on long-term strategy rather than getting drawn into operational matters?

Many directors, especially newer ones and ones who have more recently had an executive role, often find it easy to be drawn into operational issues.

Setting clear expectations as to the role of the board and how it differs from the role of management is essential. This will ideally be done well during induction and continually reinforced by the Chair with the support of the CEO in board and committee meetings.

Driving strategic discussions at board meetings becomes more manageable when the organisation’s strategy and the board’s priorities are consistently highlighted in the board pack. Regularly connecting agenda items to the broader strategy reinforces this focus. Ensuring that all directors are aligned with the board’s key priorities helps keep the discussion centred on what adds the most value—primarily the execution of the organisation’s strategy. This alignment minimises distractions and ensures that day-to-day management issues receive minimal attention, allowing the board to focus on long-term, strategic matters.

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The board ensures the organisation’s long-term sustainability by integrating sustainability into the organisation’s strategy, operations and culture. This involves setting long-term goals for environmental, social and economic performance, overseeing the implementation of sustainability initiatives and monitoring progress toward these goals. The board also engages with stakeholders to understand their expectations and concerns regarding sustainability and ensures that the organisation is positioned to thrive in a changing environment.

The board’s role in corporate governance is to provide oversight, guidance and accountability for the organisation’s management and operations. The board sets the organisation’s strategic direction, establishes governance policies and ensures that the organisation operates in a manner that is ethical, transparent and compliant with legal and regulatory requirements. The board also monitors the organisation’s performance, holds management accountable and takes corrective action when necessary.

A board manages conflicts of interest by establishing clear policies and procedures that require directors to disclose any potential conflicts, recuse themselves from discussions or decisions where a conflict exists and act in the best interest of the organisation. The board should also provide regular training on conflicts of interest and ensure that directors are aware of their obligations to avoid situations that could compromise their objectivity or loyalty to the organisation.

The board ensures effective stakeholder engagement by developing a clear strategy for engaging with key stakeholders, including employees, customers, investors, regulators and the community. The board sets the tone for stakeholder engagement by promoting transparency, open communication and responsiveness to stakeholder concerns. The board also monitors stakeholder feedback and uses it to inform decision-making and improve organisational performance.

In crisis management, the board’s role is to provide oversight, guidance and support to management during a crisis. The board ensures that there is a crisis management plan in place and that the organisation is prepared to respond effectively to potential crises. During a crisis, the board monitors the situation, reviews management’s response and makes strategic decisions to protect the organisation’s interests. The board also ensures that lessons learned from the crisis are used to improve future preparedness.

Board independence is significant because it ensures that the board can provide objective oversight and make decisions that are in the best interest of the organisation, free from conflicts of interest. Independent directors bring an unbiased perspective and are less likely to be influenced by management or other stakeholders. This enhances the board’s ability to hold management accountable and make decisions that prioritize the long-term success of the organisation.

A board contributes to organisational sustainability by integrating environmental, social and governance (ESG) considerations into the organisation’s strategy and decision-making processes. The board ensures that the organisation operates in a manner that is sustainable and responsible, balancing the needs of current stakeholders with those of future generations. This includes overseeing sustainability initiatives, setting long-term goals and monitoring progress toward achieving them.

In mergers and acquisitions (M&A), the board’s role is to provide oversight and ensure that any transaction is in the best interest of the organisation and its stakeholders. The board is responsible for reviewing and approving the strategic rationale for the transaction, conducting due diligence and evaluating the financial and operational implications. The board also oversees the integration process after the transaction to ensure it delivers the expected benefits.

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