“If you don’t know where you are going, any road will take you there.”

This quote from the song “Any Road” by George Harrison sums up a company’s path when it doesn’t have a well-developed and well-thought-out board strategic planning process.

A strategic plan is a road map, the primary purpose of which is to move a company from its present position to a point where the owners and CEO want to take it. The irony, according to 

 is essential to creating this map and the course it charts, this function of the board typically receives little attention. Here, we explain why it’s essential to give board strategic planning its due, including:

The importance of the role of the board of directors in strategic planning

How boards can challenge — and complement — management’s point of view

Driving board-management alignment in strategic planning

A typical board strategic planning process

Board management best practices during strategic planning

Why should the board of directors have a role in strategic planning?

 is to create and successfully execute the strategic plan, the board’s role is equally vital in overseeing and developing the company’s strategy. There is a wide range of views about the preferred extent of a board’s role. A 

 of proper allocation of responsibility might be to ask, “If a board is handling the load of developing strategy, what is the CEO, the person most familiar with the company on a day-to-day basis, up to?” On the other hand, if the board plays no helpful role,‌ it may be time to find new board members.

At first glance, it sounds like a trivial observation that boards should be highly involved in corporate strategy. 

: Collectively, they rate long-term strategic planning as the top issue demanding their attention. 

 and management are increasingly relying upon their boards to take a more hands-on approach in setting company strategy, as today’s leaders face many new challenges:

Corporate strategy is becoming more critical to a company’s well-being.

 A combination of macroeconomic factors, including a 

downward trend in global investment and productivity

 and the disruptive effect of increasing technologically driven change, make it abundantly clear that simply extending historically effective strategies won’t suffice. 

External political forces are playing a more significant part in strategy

. Complex trade disputes, more pressing social expectations in areas like diversity, and rising 

 influence a company’s path to success and require more board oversight.

Immediate and frequently competing board commitments can crowd out longer-term efforts such as strategy

. A board’s legal priorities force more focus on 

 issues. Heightened regulatory challenges, including the 

, require a constant eye on compliance. New risks continue to appear, such as cybersecurity, data privacy and harassment.

The accelerating pace of change requires companies to review and reevaluate their underlying strategic assumptions continually. 

 and more have radically reshaped the business landscape. Pulled between strategy and day-to-day tasks, management may struggle to keep up with changes. Boards, on the other hand, are better positioned to stay informed.

Role of board of directors in strategic planning

The very nature of a board’s relationship with its company and the modern corporate environment itself dictate the factors that define a board’s role in strategic planning:

As mentioned above, a CEO, by necessity, lives in a day-to-day world, and shareholder pressure often ties the next big goal to the end of a quarter. Boards, on the other hand, exist apart from the company’s daily challenges. The board has the luxury of looking to the future and mitigating some of the negative impacts of short-term thinking. It is from this vantage point that strategy is best contemplated.

 external noncompetitive economic and political forces in annual reports. Board members typically have a wide range of 

 in various other political, business and industry settings, which can provide a window to important insights. Again, countering the necessary single focus of the C-suite, boards can and should leverage this connectedness to recognize and respond to emerging threats or opportunities.

We are witnessing a revolution in companies’ opportunities to expand or cross over industry boundaries quickly. High-technology companies such as Amazon, Apple and Google illustrate how dramatically new business models and technologies allow companies to explore and exploit new sectors and rapidly expand their customer bases. Detailed, sector-specific knowledge only carries a company so far. Board members can bring cutting-edge knowledge about new technologies and competitive opportunities to bear on company strategy and fill management’s skills or knowledge gaps.

 translates into strategy oversight. The rapid change and more complex challenges place a premium on effective oversight. Boards thus find themselves uniquely situated to test management’s strategic effectiveness in various ways, including regularly challenging key underlying assumptions and ensuring the effective execution of the strategy.

Creating and following through on an effective strategy plan isn’t for the faint of heart. It takes a lot of careful thought, questioning and courage to challenge the status quo, including:

Continually dedicating time to strategic planning

: One of the most significant challenges in the strategic planning process is getting everyone to slow down and take the proper time to do a thorough job. Strategic planning is a process. It wasn’t designed to be completed in the course of a meeting. Most boards find that they need several board or committee meetings to complete the process so that they have confidence in it.

Boards should consider doing a situation analysis and a SWOT analysis as part of their strategic planning process. They need to identify the goals and objectives they want to achieve over the short and long term and then outline the company’s strategies to achieve them. A situation analysis considers the economic, competitive, technical, regulatory and societal environment when the company is scheduled to achieve its goals and objectives. It’s essential to recognize the impact of these areas because boards and managers have little or no control over them. By considering the impact of these areas before identifying strategic action steps, the board and managers can adapt their plans to succeed despite any fluctuations in external departments or systems.

Thinking beyond strengths and weaknesses:

 It’s not enough to merely identify the company’s strengths, weaknesses, opportunities and threats. Boards should consider and record ways to build on their current strengths. In looking at weaknesses, they must analyze how to minimize the impact. They should consider how to take the best advantage of every opportunity and, perhaps most importantly, come prepared to discuss ideas about how to defend against threats.

After considering the strengths, weaknesses, opportunities and threats and considering the impact of all the areas included in the situation analysis, boards should develop new strategies to meet their objectives.

Don’t complete the strategic plan and then just throw it in a drawer. Strategic planning requires ongoing review. Boards and managers have the most experience, so they should keep the strategic plan handy and share their views on it continuously As they review it, they should ask themselves whether conditions have changed and, if so, whether the right strategies are still in place.

Challenging management’s ideas to form the best strategic plan

During strategic planning, board directorsmust remember that they must challenge the CEO’s and senior managers’ ideas. This isn’t easy, especially when the CEO is a strong leader with a powerful reputation and long tenure. The CEO’s reputation counts, but it’s not everything. Consider every idea based on its own merits. Don’t be afraid to reject ideas with a low chance of success,even if senior managers favor them.

Think about the risks that may accompany specific plans. Initiate discussions on whether those risks are worth taking and whether there are any ways to mitigate them. Also, engage in lively discussions about whether the strategies and risks fit with the company’s strategic direction.

Aligning management and the board of directors in strategic planning

How, then, can a board enhance its effectiveness as a strategic partner with management? What are some key best practices that reflect proper board strategic planning?

Educate management about the strategic process.

 A board can assist management in understanding and selecting the proper process to develop a strategic plan. For example, a good starting point might be a SWOT analysis to understand the company better. This will help you understand its strengths, weaknesses, opportunities, and threats.

Assure that any strategic plan addresses all the resources necessary to implement the strategy effectively. 

For example, identify where additional investment will be required for added personnel and 

Create strategic options for the board to discuss with management initially.

 Introducing options for discussion compels board participation and utilizes individual board members’ skills and expertise. As a by-product of maximizing the use of respective strengths, resulting discussions will foster understanding and long-term agreement;

Establish channels for regular communication between the CEO and the board

 to continually keep the board current on the state of strategic plan development and its execution; and

Identify at the outset and continually be alert for red flags and warning signs

 that indicate the strategy is not returning anticipated results and may need revision.

6 tips for effectively managing the board of directors and strategic planning

The strategic plan should be a living document with a plan to take the company from where it is now to where it wants to be over the short and long term. As such, 

 requires careful, ongoing oversight — especially if the board habitually lets management run the show.

Managing the board and strategic planning successfully requires:

Don’t be afraid to acknowledge the elephant in the room. If you don’t believe something will work, don’t just go along with the crowd. Others in the room may be glad that somebody finally called it out. Remember that you were chosen to be a board director so that you could offer up independent opinions and not just go along with everyone else.

Make sure that strategies are in place for every objective and that they will meet the desired end. Don’t be afraid to speak out about using the same approach the board has used in the past, which has never worked. If this is their first time working, why would anyone think they’d work the next time? Determine if there’s a better approach and whether the goal is reasonable.

Don’t be afraid to ditch a losing strategy altogether. Refocus your planning on things that will work. Factor in your competitors’ potential responses. They’re sure to have one which may impact your strategic plans. Stand ready to revise your plan if the competitor moves in a way that hurts your company’s progress.

Consider whether your current managers and leaders have the skills, experience and mindsets to carry out the strategic plan regardless of past performance. Don’t be afraid to get rid of people now who won’t be a good fit for fulfilling the strategic plan in the future.

Remember that the board’s role is advisory. All board directors should ask questions that stimulate thought and provide guidance. Assess the associated risks that may accompany your strategic plan. Ask openly, ‘What issues aren’t on management’s radar?’ It takes courage to raise some issues, and it’s the board’s job to demonstrate their valor.

The most efficient way to enhance board effectiveness is to utilize 

 technology. This technology can facilitate collaboration and secure communication and empower boards to make better strategic decisions. It’s the perfect tool for collaborating using a highly secure 

Streamlining strategic planning from the board down

To effectively engage in its role in strategic planning, the board must have a diversity of expertise and experience that brings a strong knowledge of not only the underlying industry but also the external economic, technological, and other factors that will impact the company in the future. Yet, expertise alone isn’t enough.

The board of directors must continually manage and examine itself to ensure that it cultivates alignment with management — an aim difficult to achieve without a board portal. Unifying board and executive collaboration in a single platform provides management with the type of meaningful strategy planning leadership that enhances short- and long-term collaboration — both keys to boosting financial performance and building shareholder value.

Explore Diligent Boards, part of the Diligent One Platform, today

 to future-proof your board strategic planning.

Board strategic planning: Roles, process & 6 tips to succeed with strategy

On the last day of Elevate 2024, 650 attendees gathered to discuss the future of governance, risk and compliance (GRC) in 2025 and beyond. Here are the top highlights from day three of the event, including how emerging trends are shaping the risk landscape, how software can help organizations stay ahead of risk and drive business success, and what we can learn from the 2021 IPO boom.

The future of GRC: Transformative and actionable insights

John Horn, Director, Cybersecurity Practice, Datos Insights

Michael Rasmussen, GRC Analyst & Pundit, GRC 20/20 Research

Philip D. Harris, CISSP, CCSK, Research Director, Governance, Risk, and Compliance Services and Software, IDC

Moderated by Amanda Carty, Managing Director, Strategic Market Solutions,

GRC is a translation exercise — you need to know your audience, speak their language and link everything back to business objectives. — John Horn, Director, Cybersecurity Practice, Datos Insights

The session explored the view of industry analysts on what they are seeing in the market and what future trends will drive the work we do in GRC. The session challenged conventional thinking and encouraged a deeper exploration of how emerging trends are reshaping the landscape.

Organizations are engaging in continuous compliance and are reaping the benefits by enhancing their security systems, reviewing their processes and boosting their overall knowledge base.

Risk professionals need to speak about risk management in terms that relate to business objectives and goals.

Organizations in North America are behind the GRC curve compared to their European counterparts, providing an opportunity to learn and see best practices.

Organizations need to see risk as interconnected, draw the connections and identify the gaps. Software consolidation is a big priority for GRC professionals and platform architecture is key.

Before an organization purchases or adopts AI technology, they need to have a plan. There is a lot of hype and noise in the market but make sure your organization has clear objectives and policies in place. People making mistakes come with risks.

Driving business success with Diligent Risk Manager

James Wade, Chief Information Security Officer, MCS, LLC

Elizabeth Simon, Risk Vice President, Compliance, Progress Residential

Samer Rahim, Director, Advisory & Consulting Services, Diligent

Jay Cameron, Director, Product Marketing, Diligent

One of the things that helped the most was having our process well-documented, so that we could send it over to the implementation team. By knowing what we wanted to do, and then having a comprehensive document they could work off, that was key to the success of the project.— Elizabeth Simon

A very common theme that we see across our customers is siloed departments. Everyone is doing great work, but people don’t want to share across departments. When departments collaborate and work together, they achieve better results, reduce duplicate work and bring value to the business. — Samer Rahim

This session looked at how to drive business success through Diligent Risk Management with firsthand accounts from industry leaders who have leveraged Diligent’s Enterprise Risk Management (ERM) and IT Risk Management (ITRM) solutions to enhance their commercial operations and automate their cybersecurity programs. It explored how organizations have optimized risk processes, bolstered decision-making and gained a competitive edge in today's dynamic market landscape.

It’s not enough to simply ask business owners what keeps them up at night when discussing risk profiles. While it’s an important question to start the conversation, the answer won’t give you the full picture. Rather, it will help you add to and compile your complete list of risks across the organization.

For a successful enterprise risk implementation, it’s critical to understand the requirements, your process and your methodology — defining what you’re trying to achieve is key. While it may take time, having a strong vision makes an immense difference and is crucial for success.

There’s very little visibility across the business into organizational risks, when your risk management and internal audits are built on spreadsheets. Moving to a platform like Diligent means everything is centrally stored and labelled; it saves time but also brings visibility up to the board level. By integrating with other data sources such as Bitsight, board members can see a holistic risk heat map and benchmark how their organization compares to others.

The IPO boom revisited: How it started, how it's going and what we can learn

Kevin Roy, Managing Director and Head of Issuer Solutions, S&P

Moderated by Jason Geeves-Booth, Shareholder Activism Editor, Diligent Market Intelligence

The U.S. is the envy of the world regarding capital markets and that is why many European companies are re-listing here. —Ryan Nagy, Regional Listings Lead, NYSE

Being a publicly traded company is not easy and adds an extra layer of complexity, so leaders need to make sure the time is right. — Kevin Roy, Managing Director and Head of Issuer Solutions, S&P

2021 was a watershed year for IPOs in the United States, with more than 1,000 companies going public. During this time, governance norms were shifting; SPACs outpaced traditional IPOs and shareholder expectations around ESGand board diversity were evolving. Over the next three years, shifting monetary policy, geopolitical conflict and the rise of generative AI would put these companies and their governance structures to the test.

The session explored the lessons the IPO class of 2021 taught us about the role good governance plays in building organizational resilience and creating value for shareholders.

: The U.S. market witnessed a record-breaking year for IPOs in 2021, with 1,026 companies raising over $100 billion. This surge was driven by low-interest rates, ample liquidity, and growing retail investor participation. The Covid-19 pandemic spurred interest in Information Technology and Healthcare sectors, reflecting themes of digital transformation and tech-enabled healthcare solutions. 

: According to research from Diligent, average earnings per share improved from -$1.96 in 2021 to -$0.33 in 2023, signalling a gradual move toward profitability. Additionally, these companies showed relatively stable earnings compared to broader market indices.

There was a co-relation between CEO tenure and market cap growth

: Diligent’s analysis revealed a strong positive correlation between longer CEO tenure and market cap growth, underscoring the importance of experienced leadership in driving performance.

Certain governance factors influenced success

: Sound financials and a clear and successful business model, a diverse and independent board structure, robust risk management practices, board members with IPO experience and good investor relations were key factors that contributed to a successful IPO.

In 2025, IPOs will include a broad mix of industries

: Renewable energy and AI tech companies are touted for the most growth. The election will likely influence company decisions on when to go public — government policy affects everything.

Defensible disclosures: Aligning boards, audit and ESG

Russell Dover, Principal Solution Designer, DIligent

Daniel Smith, Director, Product Marketing, Diligent

Heindrek Allen, ESG Manager, Magnit Global

Jason Radgowski, Senior Director, Advisory and Consulting Services, Diligent

If you’re doing single materiality, go ahead and do double materiality. It’s more stringent, it’s more expensive, but you’ll get much better data out of it. Doing a double materiality has given us a lot more to work with. – Heindrek Allen, ESG Manager, Magnit Global

Boards, sustainability teams and audit teams play a greater role than ever in sustainability oversight and reporting, working closely to create accurate and defensible disclosures. This session explored best practices these teams can follow to get — and stay — aligned and make meaningful, defensible disclosures that can stand up to shareholder, stakeholder and regulatory scrutiny.

: Early-stage governance and accountability are essential when aligning ESG disclosures. Being strategic from the outset ensures clarity in reporting and prevents issues later.

: Audit committees are increasingly focused on ESG-related risks, adding financial audit-like rigor to processes in order to avoid greenwashing accusations.

Technology and data integration are key to complianc

e: Leveraging technology like Diligent ESG helps cross-functional teams consolidate and interpret data, ensuring transparency and compliance with evolving regulations.

Start voluntarily reporting before you’re obligated to

: Even if not mandated, companies should begin voluntary reporting to ensure they are prepared for future requirements, as regulations are only becoming more common and more stringent. It also takes considerable time and internal education across your company to aggregate and interpret the relevant data needed for reporting. Starting before you are obligated to disclose ensures your organization is ready to comply when, inevitably, it is mandated to do so. 

As Diligent's 2024 Elevate event comes to a close, it’s clear that the insights and innovations shared over these three days will help shape the future of governance, risk and compliance. From thought-provoking discussions on AI's transformative role to the critical importance of transparency and collaboration, attendees leave empowered with practical tools and strategies to navigate the complex risk landscape ahead. Elevate 2024 highlighted not only the challenges but also the opportunities to drive more effective governance through technology and forward-thinking leadership at every level of an organization. We look forward to seeing how these ideas will inspire continued progress in the coming year.

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