In the 1990s, Hewlett-Packard was one of the most dominant, industry-shaping technology companies in the world. It set the standard in printers, enterprise hardware, and corporate discipline.

Over the next 15 years, HP cycled through multiple CEOs. Each brought a different strategic direction: acquisitions, cost-cutting, software pivots, portfolio splits. Each of these decisions made sense in isolation. But collectively, they revealed something deeper: the board wasn’t providing strategy.

Direction shifted with each new executive. Their evaluations became entangled with strategic disagreement. By the mid-2010s, HP had split into two companies. Neither is industry-shaping today.

When a board does not firmly own strategy, strategy becomes personality-driven—usually a CEO’s personality. And that only lasts until it doesn’t.

What is our role with strategy?

Many, if not most, board directors are unsure of their responsibilities when it comes to organizational strategy. They know they should be involved but aren’t sure how. Should they approve what staff develops? Should they include staff at all?

Additionally, there are many types of governing boards. Some are composed entirely of independent directors. Others are staff or shareholders. Many are a combination. Regardless of structure, the board’s governance responsibility does not change.

This brings us to strategy. When done well, strategic planning is one of the board’s most powerful governance tools.

Done well, strategic planning provides direction for the executive team, creates a clear accountability mechanism, establishes the foundation for executive evaluation, and, less obviously, reveals the character and capability of both the board and the executive team.

As it relates to strategy, a governing board has four primary responsibilities:

1. Establishing a strategic framework
2. Developing measurable indicators of success
3. Establishing and updating policies
4. Evaluating progress toward strategic goals

Let’s walk through each.

Establishing a Strategic Framework

The board creates the strategic framework through which the executive team sets goals, makes decisions, and builds plans. This framework should not be vague or merely aspirational. It must provide clarity and direction.

A strong strategic framework includes three elements: operationalized values, a clear vision, and defined strategic priorities.

To illustrate, consider a flooring company. If you don’t work in flooring, that may not spark much of a mental image. That’s intentional. By the time a board is done defining its strategic framework, both directors and executives should clearly understand what the organization stands for and what it intends to build.

Operationalized values go beyond words on a wall. They describe what kinds of decisions and behaviors are acceptable.

Most organizations stop at labels like “Quality” or “Integrity.” Governance requires more. Values must be descriptive. Otherwise, they are open to interpretation—or simply ignored.

Instead of stating “Quality,” the flooring company might define it this way:

We deliver durable, code-compliant flooring and error-free service the first time, in every role, by following standard processes, honoring commitments, and resolving any customer-impacting issues within five business days.

Now the value is actionable. It applies across sales, installation, administration, and management. It becomes behavioral and measurable.

If Integrity, Safety, and Teamwork were defined with similar clarity, the board would have established a cultural foundation that meaningfully guides the organization.

Vision provides direction. It answers the question: What are we building?

The flooring company might define it this way:

We will become a $100M flooring leader by 20XX by doubling our impact—not just our revenue—expanding into new markets, elevating craftsmanship and customer experience, and building a high-performing team that treats every project like it’s our own floor.

With this clarity, governance becomes guiding rather than reactive. Decisions can be evaluated against whether they align with values and move the organization toward its stated destination.

Strategic priorities identify what must be accomplished within a defined time frame to move toward the vision in alignment with the values.

The flooring company’s three-year priorities might include:

• Entering two to three new markets and achieving profitability
• Reducing rework and callbacks by 50 percent
• Building a values-driven team through targeted hiring and training
• Developing key partnerships that generate recurring project flow

This is not yet a plan. It is the framework from which a plan is built.

At this point, the board can hand the framework to the executive team and say, “Show us how you will get there.”

Developing Measurable Indicators of Success

Governance requires objectivity. The board must define, in advance, how success will be recognized.

Values, vision, and strategic priorities must be tied to measurable indicators. Some are embedded in the examples above. Entering two to three new markets is measurable. Reducing callbacks by 50 percent is measurable. Resolving customer-impacting issues within five business days is measurable.

Other elements require clarification. What does “elevated craftsmanship” look like in measurable terms? How will a “high-performing team” be defined?

These are governance-level questions. They are not operational details, but they do require specificity.

When indicators are clear, conversations shift. The board evaluates performance against agreed-upon standards rather than opinion. The executive understands the criteria by which performance will be assessed. Strategy becomes an accountability mechanism, not an annual HR exercise.

Establishing and Updating Policies

Values and vision provide directions. Policies bridge the gap between high-level strategic language and day-to-day decision-making.

They provide guidance for management without pulling the board into management. They define boundaries and expectations in areas such as compensation philosophy, financial oversight and risk management, health and safety standards, customer commitments, and conflicts of interest.

It is the board’s responsibility to create or ensure the creation of policies that reflect the strategic framework.

When boards neglect this responsibility, they drift into either micromanagement or abdication. Clear policies allow governance to remain strategic while still shaping how the organization functions.

Evaluating Progress Toward Strategic Goals

Finally, the board must regularly evaluate progress.

If the strategic framework and indicators are well defined, evaluation becomes easy and obvious. During regular board meetings, directors should be able to review progress towards organizational priorities and review the finances. If the CEO is accomplishing their priorities and managing finances well—that’s most of what a board needs to know.

If your values are well defined, it is easier to evaluate if the CEO appears to model those both within and outside the organization.

Instead of relying on personality or subjective impressions, performance is assessed against clearly defined goals and metrics. That creates clarity and fairness for both the board and the executive.

The Often Overlooked Benefit

One additional benefit of strategic planning is frequently underestimated: the process itself drives growth.

Strategic discussions surface assumptions, tensions, and priorities. They reveal how executives respond to challenge and accountability and how directors handle disagreement. They expose whether there is trust and alignment or fragmentation and confusion.

This can be uncomfortable. Frankly, good board work will be at times. It is also where some of the greatest growth occurs—for both the organization and the leaders guiding it.

Conclusion

If a board treats strategic planning as a rubber-stamping exercise, it forfeits one of its most powerful governance responsibilities.

When done well, strategic planning provides direction, creates accountability, anchors executive evaluation, and strengthens the board-executive relationship. It clarifies what the organization stands for and what it intends to accomplish.

The board owns the strategic direction; management develops and executes the plan.

Take good care,

Christian