BUS 17 Lecture Notes - Lecture 37: Listing Rules, Risk Management, Financial Statement
Document Summary
Dynamic process: formulation of strategy policy making and planning, with the board then monitoring and supervising executive performance before providing accountability, which forms the basis for reviewing the strategy. Need to be clear but succinct indication of the core purpose and core values of the enterprise. In a board with many executive directors: likely to be much involved, small and family firms. Challenge: missing critical perspective, non-executive directors can offer alternative insights etc. In a board with majority of independent outside directors: in large us and uk firms, strategy is driven by top management, top management undertakes a strategic review and produces a set of strategic proposals for the board"s approval. Formal approach: create long-range plans, extends the annual budgeting process over a longer strategic time horizon, forces board to focus on long-term. Limitations: approach fails to take a strategic perspective, does not recognize the changes in relevant technology etc, planner is inside the organization looking out.
