Board members want to get more involved in where the CEO plans to take the company—and in making sure he stays the approved course. Do it now, but do it right. Plus: Read All About It Red Flags
Of all New Year’s resolutions made for 2006, one of the most likely to be still on your list is the determination to “get more involved in my company’s strategic planning.” Polls show that board members want to take a far more active role in shaping the direction of the business. In the 2005 survey of 1,100 directors done by Corporate Board Member and PricewaterhouseCoopers, for example, 59% said their boards should spend more time on strategy.
Many boards are beefing up their involvement and even codifying their new role. And for a few, it’s already familiar territory. At Becton Dickinson & Co., a medical-supplies company headquartered in Franklin Lakes, New Jersey, an annual strategic review was mandated in the 2001 statement of corporate governance principles. The meeting is an important part of the board’s three-step strategic-planning process. “It’s not just some mega-PowerPoint presentation that the board looks at and signs off on,” says chairman and CEO Edward J. Ludwig. At the annual all-day board meeting, held in Short Hills, New Jersey, in 2005, members of top management provide Ludwig and other directors with an in-depth look at the strategy for each of the company’s three businesses: biosciences, medical devices, and diagnostics. “It’s where we do our deep dive,” Ludwig says.
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