Global Pharmaceutical Executive | Driving Commercial Excellence & Market Access Innovation | Transformative Leader in Growth, Turnarounds & Launch Strategy | Champion for Medicines Affordability
During stressful times, even the most capable leaders can make decisions that are not in the best interest of their companies. This is especially true for CEOs, who often face conflicting pressures and demands. These pressures can lead to poor choices, such as ill-advised stock buybacks. These cost-cutting measures are poorly thought out, or even more severe missteps like engaging in creative accounting or outright illegal activities. Companies like Nokia, GE, and IBM have all faced significant challenges due to such crises. However, a proactive and engaged board can act as a strong defence against these issues. The case of Nord Com illustrates the high cost of a disengaged board and how a newly appointed diverse board led a thorough investigation and strategic overhaul to restore the company's integrity. The new board chair was crucial in facilitating well-informed decisions and aligning the company's strategic direction. The example underscores the immense value of a well-engaged board in providing support and expertise to navigate strategic challenges and prevent crises. An effective board brings a high-level perspective and an outside-in view, essential for navigating complex business landscapes. Directors must devote substantial time and energy to monitoring and reflecting on management’s actions, ensuring that strategic decisions are well-grounded and forward-looking. Setting a new strategic direction involves accurately defining the company's challenges and understanding its core business model. Boards, with their wealth of experience, are well-positioned to sense dynamic external conditions and envision new possibilities. By extending their engagement beyond the CEO to other managers and specialists, boards can better understand the company’s strategic assets. This shared exercise in setting strategic direction can significantly enhance corporate outcomes, driving sustainable growth and resilience. I suggest reading INSEAD's article "Your Board is Your Best Insurance Against Turbulence" by Yves Doz and Keeley Wilson #Board #NonExecutiveDirectors #Strategy
