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The strategic role

Introduction

A fundamental role of any board is that of strategic governance, namely:

  • To set the strategic direction of the organisation;
  • To help plot the organisation’s path through an uncertain future;
  • To ensure the organisation achieves what it should.

(Refer Nine Steps to Effective Governance, SPARC (now Sport NZ), 2004. p.56)

These requirements are continuous and ongoing. Strategy should not just be confined to an occasional strategic retreat or an impromptu discussion.
In the Crown sector there are also a number of specific requirements for a board to follow in respect to strategic planning. These are noted below.

Risk awareness

Before formulating or confirming the strategic direction, a board should have an effective system in place to help it identify potential barriers to success. A board should regularly review the main strategic and operational risks facing the organisation.

Strategic direction

Having a strategic direction requires an answer to the following core questions:

  • What is our purpose?
  • What is our vision?
  • Is it still relevant?
  • What is the “spirit” of this organisation?
  • What is important to us?
  • Where is the organisation at, at present?
  • Where do we want to get to?
  • What do we want to become?
  • How do we want to react with each other and the outside world?

(Refer Nine Steps to Effective Governance, SPARC (now Sport NZ), 2004).

Crown governance requirements

Under a separate topic heading we have identified a number of strategy-related mechanisms for the Crown sector. These include the strategic requirements of the entity’s own legislation or enabling document, the Crown Entities Act 2004, and Statements of Intent and related documents.

Strategic partnership

Sometimes boards will abdicate their role in strategic planning and leave it entirely up to management. The only involvement such a board may have is to act as a ‘rubber stamp’. At the other extreme is a board with total dominance of the planning process and which freezes out any management input. In practice, strategic planning should be a partnership between a board and management.

"Management needs the board to set the direction and confirm the design of the business. The board needs management to develop the second tier strategies and to design the operational framework for the implementation of the (strategic) direction." Strategic Planning is a Partnership, Good Governance #53, October 2006.

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Updated on 6th March 2017