DOI: 10.5176/2251-1970_BizStrategy13.29
Authors: Denis Mowbray, Coral Ingley
Abstract: The development of organizational strategy is a process that highlights the level of collaboration and agreement between boards and executive teams. For many organizations, strategy development can cast a dark shadow over the board – executive relationship. Boards feel left out of the process, executives believe that boards interfere too much or have limited knowledge; both groups may feel the other is being overly optimistic or pessimistic or not listening.
We suggest that these and other indications of disengagement and disempowerment in the dynamics between the board and executive result from a lack of certain key characteristics that exist between these two top teams. Drawing on recently completed research, we propose that it is the synergy, trust and confidence present between the board and executive while sharing a relational space, defined as the “third team” which defines whether the process of strategy development will be collaborative or confrontational.
Support for these propositions is drawn from various authors [e.g.1, 2-6] and concepts derived from empirical research (e.g. intellectual capital, leader-member exchange, team effectiveness, knowledge sourcing, and strategy development). Using fuzzy set qualitative comparative analysis which we applied to data from a set of corporate and not-for-profit organizations, we identified key differences in the cognitive and characteristic profiles of directors and executives of high-performing organizations compared to directors and executives in poor-performing organizations.
These key differences were found to be necessary for boards and executives to work effectively together in developing strategies that lead to superior organizational performance.
Keywords: High-performing; strategy; boards; executives; governance;
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