Chapter 6 - Functions of the Board The Functions of the...

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Functions of the Board The Functions of the Board - Board responsibility to look inwards at the enterprise and outwards to the firm’s external situation Strategy Formulation - One of directors primary duties is to ensure that their enterprise is heading in the right direction - Strategy formulation may involve senior mgmt and consultants, but certainly involve the board members - Written mission statements are at best a bland public relations exercise and at worst and exercise in futility - Traditional approach to strategic planning long range planning - Long range planning: o The annual budget process is rolled forward over a longer strategic time horizon o Forces the board to focus on the longer term o Planner is inside the information looking out o Fails to take a strategic perspective Perpetuates the existing business rather than recognizing potential strategic changes in technology - SWOT o Focus attention on the existing business o Limitations: Failure to identify what is driving change in the market fail to react accordingly
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Chapter 6 - Functions of the Board The Functions of the...

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