The primary role of a director is to provide governance and oversight. There is a line that should not be crossed between governance and management. However, we should remember that board members are elected because of the experience, knowledge, and skills that they bring to the table. Limiting board members to governance and oversight roles may deprive the company of special skills, experience, and knowledge that can create value by guiding conversations around the company's strategy.
In my 20 years of experience as an executive in companies, which have ranged from start-ups to public companies and nonprofit organizations, I either served on the board or directly worked with it, and that line between governance and management was rarely ever crossed. On those occasions when it was, board members were accused of micromanagement. In many cases, company managers felt their autonomy to do their job their way was stripped from them, resulting in their sense of a lack of ownership and accountability and their blaming board members for poor company performance.
In 2000 I negotiated the sale of a small Silicon Valley technology company to a larger, public company with a market capitalization of $2.2 billion, where I eventually came to serve as a vice president. One day, one of the board members took a group of some 20 of the management team through a scenario-planning exercise that was focused on strategy development processes. I was amazed at the insight that came out of that event and by the value that the board member provided to the company, beyond governance and oversight, by facilitating this session.
When it comes to guiding scenario-planning conversations, a company can hire a consultant-facilitator to facilitate its strategy development and that person may have more experience than any board member in that company. However, there is a lot to be said for the personal involvement that a board member has in the company, giving directors the ability to facilitate better than an external consultant because they come to the table already equipped with customized, inside knowledge of the organization and the challenges it is facing.
Case in point: In 2002, while serving as a director of strategy of Texas Instruments, I facilitated a scenario-planning event at the company. At one point, we drilled down on the critical uncertainties facing the company, the factors that will split the future...