At the beginning of every year, Financier Worldwide gathers opinions from corporate advisory leaders to explore their insights into current and emerging trends. In his comments, Milliman principal and consultant Neil Cantle discusses the importance for boards of directors to properly challenge and support executive teams in the implementation of their strategies. On the one hand boards are required to bring "independence," and yet on the other hand they need to know sufficient detail of the daily operations that they can provide robust challenge and active support.
The recent turmoil brings a reminder that business drivers can change rapidly and unexpectedly and that revisiting business decisions more often than just annually during planning sessions may be necessary. How does the board satisfy itself that the picture portrayed by executives is accurate? How can they best provide useful support to executives in identifying the missing pieces?
These are challenging questions, but ones which boards are increasingly obliged to answer, as successive governance reviews make requirements more onerous. The board and executive team therefore need to create a risk framework which combines their collective insights to provide genuine understanding about the ongoing ability of the organization to deliver on its strategy at any point in time.