Too often boards of directors don’t understand when and how they should be involved in strategy. When earnings decline, a competitor makes a sudden move, or a merger or acquisition looms, they come to life. But often it’s too late. By not getting involved earlier in the game, directors deny executives and the company, in general, the value of their input. Stellar Boards do better. They don’t formulate strategy, but they maintain a clear focus on it. But keeping the board’s discussion at a strategic level plagues boards that have yet to develop Board Mindset™. Sitting or former senior executives on the board may not have an easy time moving their thinking to a strategic level from an operational one. Shareholders on the board can be focused on their own interests but ignore the strategic direction. Directors with Board Mindset™ consider the board a strategic asset, but this shift in thinking requires a de-coupling of the roles of the board and management.

Strategy formation, which should happen at the management level, forces leaders to make choices within a range of unknowns that affect the future. In order to make it less anxiety provoking, however, many boards many turn strategy developments into a process that results in a thick document that is really an operating plan. Stellar Boards don’t accept this weak substitute.