Boardroom strategic thinking and the value it creates

Boardroom strategic thinking is essential for directors, who will know that for good corporate governance, they need to manage several crucial responsibilities at once. 

The old view of boards just checking boxes on compliance is changing fast. Boards are now expected to be much more hands-on in shaping company strategy, which is often complex, fuelled by unpredictable factors and varying stakeholder expectations. As a director, you can’t hold your hands up and say that the job is too big for you; you need to navigate those challenges, helping create a strong vision for your company’s future.

The answer lies in levelling up your strategic thinking abilities. This guide will explain what’s what about them.

In a nutshell: It’s more than just operational oversight – monitoring progress, noting successes and passing off challenges to employees. The true meaning is engagement, analysing tricky situations,  weighing up different paths, and making smart calls for sustainable, long-term value creation. 

It goes without saying that this needs a ‘big-picture’ view, because you must be able to see how everything connects, especially if you’re on the board of a big business, where those connections are crucial but not always obvious. Big picture thinking involves blending insights on market trends and competitors with a clear view of the company’s own capabilities.

Many directors will come into their role, told that their primary function is to sign off on management’s decisions. That’s true… in theory, but the real-world life of a director is a lot more than that. Stakeholders expect you to critically analyse that strategy, and ask questions about anything which doesn’t make sense, or which you would do differently. In reality, this is true compliance.

Good boards will often ask questions about whether the strategy truly aligns with the company’s purpose and the realities of the market. Getting the strategy right upfront is key; as one expert puts it, “flawless execution of a flawed strategy only compounds problems”. This means getting involved earlier, discussing rough ideas, not just polished plans. This CEO board strategic partnership builds stronger strategies.

Setting the strategy isn’t the end game. Boards must track progress, looking at both financial results and other important factors like ESG goals. Crucially, they need to keep asking: Is this plan still the right one? How are we adapting to changes? This ongoing conversation ensures the organisation stays agile. Checking the alignment between business and people strategy is also key.

You can’t separate strategy from risk. Smart board risk oversight needs to be part of every strategic conversation. Boards are ultimately responsible for understanding and managing key risks – from market shifts to ESG concerns – ensuring they fit the company’s risk appetite. This integration of risk into strategic decision-making helps avoid pitfalls while pursuing growth.

The board’s own culture matters hugely. An environment where directors feel safe to speak up and challenge ideas constructively leads to better strategic decisions. Boards also champion the company’s ethical tone, making sure the strategy fits the corporate purpose and values. Making purpose and ESG regular agenda items shows they’re taken seriously. Embedding corporate purpose requires reflective engagement with stakeholders.

To be effective strategists, directors need specific skills:

• Foresight: Looking ahead to anticipate changes.
• Critical Analysis: Questioning assumptions and evaluating information objectively.
• Systems Thinking: Seeing the connections across the business and its environment.
• Curiosity & Learning: Staying informed about external trends.
• Communication & Listening: Sharing views clearly and hearing others out.
• Decision-Making: Making sound judgments, often with incomplete information.
• Self-Awareness: Recognising personal biases.
• Strategic Leadership: Guiding vision, resources, and change.

A board with a good mix of these skills is far more effective.

It wouldn’t be a guide to strategic thinking without mentioning the common barriers. Ultimately, it’s important for directors to know the signs of an environment where strategic thinking might be hampered. Fortunately, these issues are easy to spot as long as you have the right amount of independent thinking on your board. 

Your board may have too little (or sometimes too much) information in its decision-making process, or suffer from a lack of time to adequately consider crucial information before making a decision. 

Culture can also be a huge strategic roadblock. We’re not talking in the cross-border, international sense, but rather the corporate culture that permeates the boardroom and governs how directors interact. If this culture discourages challenges, open discussion, and encourages groupthink, you have a problem. 

This overlaps with the issue of cognitive biases, which can harm decision-making if left unchecked. Bias is a tricky thing because people often don’t know it impacts their thinking, or simply refuse to believe it. You often need to rely on others to point it out, whether directly or indirectly.

Strong board strategic thinking isn’t just a governance exercise; it directly drives better performance and long-term value creation. It ensures focus, builds resilience, sparks innovation, and manages risk smartly.

Modern corporate governance strategy also means looking beyond just shareholder returns to consider employees, customers, and society. Integrating Environmental, Social, and Governance (ESG) factors into the core strategy is now vital for long-term success and managing risk. This ESG strategy integration is fundamental, not optional.

The message is clear: boards need to be strategic partners. This requires directors with the right skills, effective processes, and a culture that supports open, strategic dialogue. When boards step up to this challenge – dedicating time to strategy, honing skills, using helpful frameworks, and demanding transparency – they become invaluable assets. 

They help steer their organisations towards sustainable success in a complex world. Strong leadership from the CEO and Chair is essential to make this strategic partnership work.