Does everyone agree on what strategic planning is?

 What is the purpose of this article?

• This article enables a discussion about your company’s strategic plan and strategic planning process.
• The audience for this article includes: boards of directors, CEOs, the C-Suite, individual investors, and institutional investors. The article applies to all companies, regardless of size.
• This article does not provide tax, legal or financial advice. You must do your own research and fact-based analysis using current and relevant information.

What are the critical learnings in this article?

• There is no broad agreement regarding the definitions of: strategy, strategic plan, strategic planning process
• There is no broad agreement regarding the components and metrics of a strategic plan.
• There is no broad agreement regarding a strategic planning process.

 How do you read this article?

• This article is a collection of quotes defining strategy, strategic plan, and the strategic planning process.
• The quotes are from publicly available articles from the some of the world’s leading strategy consulting firms and business schools.1
• I have not read every single strategy article published by these organizations. I have not included every single strategy quote.

You can download  PDF of this article from: Does everyone agree on what strategic planning is

Are there common definitions of: strategy, strategic plan, and strategic planning process?

There are no common definitions.

A few of the many definitions of strategy are:

• “profitably differentiate a company from it’s competitors”
• “an integrated set of actions designed to create a sustainable advantage over competitors”
• “the ability to foresee the future consequences of present initiatives”
• “a strategy expresses the logic of success for the organisation”
• “explaining what enables firms to enjoy sustainable performance advantages over their competitors”

A few of the many definitions of a strategic plan are:

• “allocate resources to critical capabilities”
• “a road map of how to get to the desired destination”
• “output of the planning process”, “set of plans”, “which describe objectives and alternative strategies”

A few of the many definitions of a strategic planning process are:

• “a comprehensive process for determining what a business should become and how it can best achieve that goal”
• “the ongoing organizational process of using available knowledge to document a business’s intended direction”
• a process to “accomplish the enterprise’s desired outcomes”, “plan for action with clear and measurable goals linked to these outcomes”
• “anchors a company’s vision, aligns resources, and drives impactful decisions”
• “explicit written process for determining the firm’s long-range objectives, the generation of alternate strategies….and a systemic procedure for monitoring results”.

Is there a broad agreement on the components and metrics of a strategic plan?

There is no broad agreement on the components and metrics of a strategic plan. A few of the many examples of possible strategic plan components metrics are:

• “the size of the profit pool available in each market”, the pool’s potential growth”, “the company’s likely portion of that pool”
• “demonstrates how any changes in end markets, competitors, prices, and other external variables will affect a company’s profits, cash flow, and valuation if no action is taken”
• “market growth, segment size, customer needs, competitor strengths and weaknesses, and technological trajectories”
• “operations costs”, unit costs, total volume costs, and lifetime costs.
• “concise sentence describing the reason the organization exists”
• “what success looks like for the organization over a three-year horizon”, “two external tangible outcomes and one internal improvement in capability”
• “return on investment of stockholders”, “stability, good wages, and good benefits for employees”
• “90-day priorities for everyone in your organization”
• “Measures that allow them to understand whether their companies are outgrowing the market and taking share from competitors”
• Explicit stakeholder objectives “listing of all groups that contribute to the organization”, “creditors, stockholders, retailers, and the local community”

Is there broad agreement on the strategic planning process?

There is no broad agreement on the strategic planning process. A few of the many examples of what comprises a strategic planning process are:

• First step: “describe the organization’s mission, vision, and fundamental values”, “understand the current and future priorities of targets customer segments”
• First step: Align on the strategic challenge”, “embedding strategy into plans and budget”
• Answer the question: “is uncertainty properly defined and accounted for?”
• First step: “Systematically scan the environment for opportunities and risks”
• Answer the questions: “How are the priorities and options of leading-edge customers changing?”, “Where are today’s profit pools, and how are they likely to evolve or be disrupted?”
• First step: “Define your purpose” to create customer and employee value.
• Answer the question: “What would it take to be the Google, the Apple, or the Walmart of this market?”
• “Quantify various types of threats” using “AI and machine learning tools”
• Answer the question: “Where can we continue to improve and create value for our customers?”
• “Define stakeholder expectations and establish compelling objectives for the business”

How many strategies does your company need?

The articles from the 9 organizations identified more than 19 different strategies your company might have. ²

I am unclear from the 9 organizations about:

• How many strategies does your company need?
• Who makes the decision about whether or not a strategy is required? What will be the value of each additional strategy?
• Who makes the decision regarding your company’s overall planning and management process, which includes your various strategies?
• How does your company coordinate the various strategies: e.g. assumptions, facts, decisions about resource allocations, decisions about timing etc.
• Who approves the process for each strategy? Process includes: the questions to answer, the people involved, technology used, the types of analysis done, etc.,
• Who is accountable for documenting each strategy process?
• Does each strategic plan document start with a slide that says “Asking for the approval of….”. Do the minutes of the meeting document exactly what was approved?

What are your next steps?

• Define the words/concepts/data you’re using, in a glossary. I’ve seen major confusion when the same words mean different things to different people.
• Collect the facts regarding your current strategic planning situation, by using answering questions 2) to 6) from the above section “How many strategies does your company need?”
• Benchmark your company’s historical results with your direct competitors and the broader market.
• What are implications of the above?

Footnotes:

¹ Bain, BCG, McKinsey, Harvard, INSEAD, MIT, Stanford, University of California – Berkley, and Wharton

² I’ve listed here only 19 of the many strategies from the 9 different organizations: AI strategy, AI agent strategy, AI prompting strategy, brand strategy, corporate strategy, corporate finance strategy, crisis management strategy, customer insights strategy, data strategy, go-to-market strategy, innovation and entrepreneurial strategy, international and emerging markets strategy, investor relations strategy, M&A strategy, operating model strategy, operations and supply chain strategy, portfolio strategy, pricing strategy, transformation and change strategy,

What further reading should you do?

Your company will fail. Koor and Associates

https://koorandassociates.org/avoiding-business-failure/your-company-will-fail-v1/

Is your company planning to fail? Koor and Associates

https://koorandassociates.org/avoiding-business-failure/is-your-company-planning-to-fail/

Traditional strategic planning dooms your company to failure. V2

 What is the purpose of this article?

• This article enables a discussion about your company’s approach to strategic planning.
• The audience for this article includes: boards of directors, CEOs, the C-Suite, and investors. The article applies to all companies, regardless of size.
• This article does not provide tax, legal or financial advice.
• You must do your own research and fact-based analysis using current and relevant information.

You can download a PDF of this article from: Traditional strategic planning dooms your company to failure. V2

What are the critical learnings in this article?

• TSP (Traditional Strategic Planning) evolved in a slow changing world. The future could be forecast, and decision (and decision-making processes) were expected to be valid for several years.
• The result of TSP was that few companies survived and most delivered poor financial results.
• Today’s world is totally different: future is impossible to forecast, multiple sets of fast changes, multiple unpredictable crisis.
• Strategic planning must be rethought to determine which decisions and decision making processes have a lifetime longer than a year.

 When did strategic planning become popular?

Traditional strategic planning became popular in public companies in the late 1970s.  Many of the strategic planning concepts and methodologies are many years, or decades, old.  What were some of the characteristics of the old world?

• Slow changing.
• Infrequent crisis.
• Forecasting the future 3 years out was often possible.
• Capital was very hard to get.
• Talent appears to be easy to get.

What did many strategic plans look like?

• The format was executive summary, vision, mission, values, goals, objectives, multi year strategic initiatives, KPIs (Key Performance Indicators,) past and future financials, and assumptions and strategic initiatives.
• Supporting analysis include SWOT (Strengths, weaknesses, opportunities, threats)

What were the results of traditional strategic planning?

Few companies survive

Most public companies will not survive. ³

• A Fortune 500 company will survive an average of 16 years.
• The typical half-life of a North American public company is 10 years.
• Global public companies with $250 million+ market cap have a typical half-life of 10 years.
• 50% of all U.S. companies survive for 5 years.

 Few companies generate significant value.

McKinsey analyzed the world’s 2,393 largest corporations from 2010 to 2014. The top 20% generated 158% of the total economic profit (i.e. profit after cost of capital) created by those corporations.  This was an average economic profit of $1,426 million per year. The middle 60% generated little economic profit, an average of $47 million per year. The bottom 20% all generated negative economic profit, with an average loss of $670 million per year.⁴

Most public companies have performed poorly⁵

• 6% of all public companies have had negative returns over their entire life.
• The median annual return for public companies (in existence for a least 1 year) has been -0.74%
• 10% of the above public companies in had annual returns of at least 22%
• 10% of the above public companies had annual returns of -58.24%, or less

But the world in 2026 is totally different.

• The future is impossible to predict
• There are multiple sets of crisis and turmoil at the same time and appearing unpredictably
• Technology, customer needs, and competition changes in months.
• Capital is now unlimited.
• Talent is very scarce and very expensive. Elite employee (non-C-Suite) can reach into the millions or 10s of millions per year.
• Two recent McKinsey articles outline: Monthly board and management meetings to discuss strategy; and weekly review of strategic KPIs by CEO and C-Suite, with intent to make any required corrections.

It is time to fundamentally rethink and recreate strategic planning.

• What decisions can last for more than a year?
• What decisions may be obsolete within a year?
• What new decisions may your company need to make next month?

Your next steps.

#1 Define the words/concepts you’re using, in a glossary.  I’ve seen major confusion when the same words mean different things to different people. Critical definitions include: strategy, strategic plan, decision (i.e. what is a decision and the implications of a decision)

#2 Describe your potential external business environment over the next 3-5 years e.g. geopolitical changes, technological, capital and talent availability? Describe your external environment in 2020.

#3 What will your company look like in order to survive and prosper?

#4 What decisions will not need to be rethought over the next three years. Document your current decisions and decision-making processes. Some possible decisions are:

• The processes to select, assess, develop, and exit talent at all levels of the company, including board of directors, CEO, C-Suite. This might include the role of values, morals, and ethics.
• Talent allocation
• Capital allocation
• Decision making principles.
• Board of directors approved policies.
• Processes to launch and shut down projects lasting more than 6 months.
• Risk appetite

#5 What decisions will need to be rethought during the next 3 years.  Document your current decisions. These could include:

• Talent allocation
• Capital allocation
• Exiting certain customer segments.
• Shutting down certain solutions.

 Footnotes

¹ Renée Dye and Oliver Sibony, “How to improve strategic planning”, McKinsey Quarterly, August 2007, https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/how-to-improve-strategic-planning

² Martin Reeves, Julien Legrand, and Jack Fuller November 14, 2018 BCG website, https://www.bcg.com/en-ca/publications/2018/your-strategy-process-needs-a-strategy.aspx

³ “Corporate Longevity”, Credit Suisse, February 7, 2017

⁴ Chris Bradley, Martin Hirt, and Sven Smit, “Strategy to beat the odds”, McKinsey Quarterly February 2018, https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/strategy-to-beat-the-odds

⁵ Hendrik Bessembinder, W.P. Caret School of Business, Arizona State University

Analysis of CRSP database of U.S. public companies, Dec 2025 to Dec 2023

https://www.scribd.com/document/924363269/2024-Which-U-S-Stocks-Generated-the-Highest-Long-Term-Returns-Hendrik-Bessembinder

What further reading should you do?

Does everyone agree on what strategic planning is?

https://koorandassociates.org/strategy-and-strategic-planning/does-everyone-agree-on-what-strategic-planning-is/

Your company will fail. Koor and Associates

https://koorandassociates.org/avoiding-business-failure/your-company-will-fail-v1/

Elite talent – what is it? Koor and Associates

https://koorandassociates.org/creating-business-value/elite-talent-what-is-the-purpose/

What is the corporate governance ecosystem? V2

 What is the purpose of this article?

The purpose of this article is to enable a discussion and action planning among owners/shareholders, boards of directors, CEOs, C-Suite, and advisory boards regarding the company’s governance ecosystem

This article does not provide tax, legal or financial advice.  You must do your own research and fact-based analysis using current and relevant information.

You can download a PDF of this article from: What is the corporate governance ecosystem V2

What are the critical learnings in this article?

• The corporate governance ecosystem is the same as your company’s ecosystem.
• Your company’s ecosystem can enable your company’s success or destroy your company.
• Like natural ecosystems, the firms involved in business ecosystems compete for survival with adaption and often extinction.

What is corporate governance?

“Corporate governance involves a set of relationships between a company’s management, board, shareholders and other ecosystem members.  Corporate governance also provides the structure and systems through which the company is directed and its objectives are set, and the means of attaining those objectives and monitoring performance are determined”.¹

What is the corporate governance ecosystem?

The corporate governance ecosystem is the same as your company’s ecosystem

What is your company’s ecosystem?²

A corporation’s ecosystem is the network of people and organizations, (including the board, management, shareholders, employees, regulators, suppliers, partners, competitors, the media, rating agencies, communities, NGOs (Non-Governmental Organizations), other third parties, organizations that create and commercialize new technology and society) directly and indirectly involved in the operation of the business through both competition and cooperation.

The idea is that each entity in the ecosystem will affect and is affected by the others, creating a constantly evolving set and nature of relationships in which each entity must be flexible and adaptable in order to survive, as in a biological ecosystem.

The actions and behaviours of the ecosystem vary, depending upon what attribute of the corporation is considered. For example, the ecosystem has different behaviours when regarding the second-to-second corporate delivery of products or services versus when the corporation is dealing the event of personal information of hundreds of millions of users being hacked.

Like natural ecosystems, the firms involved in business ecosystems compete for survival with adaptation and often extinction.

In today’s rapidly changing business world, a company creates its own ecosystem or comes up with a way to join an existing ecosystem by providing an advantage that is currently lacking in that ecosystem.

Why do you need to understand your company’s corporate governance ecosystem?

• Your company’s ecosystem can enable your company’s success or destroy your company.
• You cannot manage what you don’t understand.
• McKinsey has written “..each company must earn the ‘social license’ to be in business..”³
• Understanding of the governance ecosystem can be a competitive advantage, or disadvantage. A global McKinsey survey showed that less than 20% of executives had frequent success in influencing government policy and the outcome of regulatory decisions.⁴
• Influencing your ecosystem starts with listening to the ecosystem members. Then you begin a variety of communications approaches with key members of your ecosystem.
• Governance requires management of the conflicts of interest among your company’s ecosystem members.⁵
• Your company’s scenario planning must include scenarios regarding what your future ecosystem will look like, who the key members will be, and how ecosystem members might interact with each other and your company

What are your next steps?

Define the words/concepts you’re using, in a glossary.  I’ve seen major confusion when the same words mean different things to different people.

Questions for your board and CEO/management to consider. Ask the following questions and document the agreed upon answers, as well as points of disagreement.  Remember, the Supreme Court does not always have a unanimous point of view.

• Who are the key members of the governance ecosystem? Which members assess the performance of the company?  Which members believe they should have some sort of involvement in the objective settings and planning to meet the objectives?
• Who is managing the relationship with each key ecosystem member? Board?  CEO, C-Suite?  Employees?  Contractors? What is the nature of the relationship? (observing, communicating, meetings, working together or working against)
• Which members, if any, have you decided not to have relationships with?
• What is your process for setting objectives for the board and management? How do the relationships impact setting the company’s objectives? What are the various interests of the ecosystem members?  How does the board and management deal with the many conflicts of interests and expectations?
• What is your process for determining how the board and management meet their objectives?
• How do you assess the performance of the board and management, in creating long term value and in meeting their respective objectives?
• How are the members of the ecosystem involved in the setting of objectives, plan preparation, and performance assessment?
• How do you communicate the objectives, plans, and performance to the members of the ecosystem?
• What are the different perspectives among ecosystem members as to how to monitor and assess the company’s performance? How is the board’s, and CEO’s performance measured by different components of the ecosystem?
• Based on the answers to the above questions, what is the action plan, if any, for the board and for management?

Footnotes

¹ Based on “G20/OECD Principles of Corporate Governance”, 2023  Page 6. I changed “stakeholders” to “other ecosystem members”, https://www.oecd.org/en/publications/2023/09/g20-oecd-principles-of-corporate-governance-2023_60836fcb.html

² Adapted from Investopedia 2023

³ Jim Brennan, Greg Kelly, and Anne Martinez “Tough choices for consumer goods companies” McKinsey Dec 2013, https://www.mckinsey.com/industries/consumer-packaged-goods/our-insights/tough-choices-for-consumer-goods-companies

⁴ John Browne and Robin Nuttall, “Beyond corporate social responsibility: Integrated external management”, McKinsey Quarterly, March 2013, https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/beyond-corporate-social-responsibility-integrated-external-engagement

⁵ Professor Didier Cossin and Abraham Hongze Lu, “The four tiers of conflict of interest”, IMD, Global Board Center, https://www.imd.org/research-knowledge/articles/the-four-tiers-of-conflict-of-interest-faced-by-board-directors/

What further reading should you do?

What is corporate governance?

https://koorandassociates.org/corporate-governance/what-is-corporate-governance/

Your company will fail.

https://koorandassociates.org/avoiding-business-failure/your-company-will-fail-v1/

 What does society thinks of institutions and corporations “56% companies that only think of themselves will fail”, “60% CEOs are driven more by greed than by a desire to make a positive difference in the world”,2018  Edelman Trust Barometer Global Report, https://cms.edelman.com/sites/default/files/2018-01/2018%20Edelman%20Trust%20Barometer%20Global%20Report.pdf

Jeffrey Sonnenfeld, Melanie Kusin, and Elise Walton “What CEOs really think of their boards”, Harvard Business Review 2013 April, https://hbr.org/2013/04/what-ceos-really-think-of-their-boards

Professor Didier Cossin and Estrelle Metayer “Does your board really add value to strategy?”, IMD Global Board Center, https://www.imd.org/research-knowledge/articles/board-strategy/

What is corporate governance? V4

 What is the purpose of this article?

The purpose of this document is to enable founders, CEOs, management, investors, shareholders, boards of directors, advisory boards to create a shared understand of their company’s corporate governance.

This article does not provide tax, legal or financial advice. You must do your own research and fact-based analysis using current and relevant information.

You can download a PDF of this article from: What is corporate governance V4

 What are the critical learnings in this article?

• Corporate governance is broader and deeper than just the board of directors.
• Discussion around governance is often very silo based and depends upon the specific background of the governance advisors. After company management, its board, and its shareholders have heard from several different advisors, there is often a confusing and disjoint picture of governance with limited shared understanding.
• You need a shared understanding of the definition of corporate governance, the purpose of corporate governance, and the purpose of the corporation to avoid confusing and conflicting decisions and behaviours.

What is corporate governance?

“Corporate governance involves a set of relationships between a company’s management, board, shareholders and other ecosystem members.  Corporate governance also provides the structure and systems through which the company is directed and its objectives are set, and the means of attaining those objectives and monitoring performance are determined”.^{1  (}See the Further Reading section for a link to the article “What is the Corporate Governance Ecosystem?)

Based on the above definition, there are five aspects to corporate governance:

• The focus is on relationships among different types of people.
• Directing the company. Appendix 1 provide a sample definition of directing.
• Setting objectives. People set objectives.  The board directors, company management, shareholders, stakeholders and third parties all have different interests and personal objectives.  The conflicts of interest need to be understood and managed to agree upon objectives for the board and for management.
• Determining how to meet objectives. People have to develop plans which reflect what they will do to achieve the objectives.  Both the board and management have objectives and plans.
• Monitoring performance. The performance of people (the board and management) is monitored. Everyone needs to understand the personal consequences of not achieving objectives.

Also implied in the above definitions:

• Who can make decisions and how are those decisions made?
• What are the consequences for decision makers who make poor decisions?
• Who has the authority to act on behalf of the corporation and in what specific situations?
• Who is accountable for behaviour and outcomes?
• How are those people who are accountable for execution involved in decision making?

 What are the challenges of understanding corporate governance?

Discussion around governance is often very silo based and depends upon the specific background of the governance advisors e.g.

• Lawyers often start with the Business Corporations Act. Sometimes the legal framework is a social purpose corporation, such as a B Corp., a partnership or a joint venture.
• Regulators often start with financial risk management guidelines.
• Accountants often start with quality of financial statements.
• Consultants have a variety of different points of view.
• IT (Information Technology) governance advisors have an IT-centric perspective.
• Private corporations may have unanimous shareholder agreements, which limit the decision making and accountability of the board of directors by reserving certain decisions for the shareholders.
• Any corporation could have a voting trust comprised of some or all of the shareholders.
• Financing agreements may have terms and conditions which constrain the company’s decision making and may even provide the financers with decision making authority in certain situations.
• Values, morals, ethics, company purpose and culture are a critical, but often overlooked, part of corporate governance.

Often there is a legal perspective of acting in the best interests of the corporation or the shareholders or other members of the company’s ecosystem.  What does this actually mean? Two example questions, for which I don’t have the answers:

• If climate change is real, should the company reduce or eliminate its impact on global warming, even if that reduces company profits, shareholder dividends, and compensation for the board of directors and C-Suite?
• Should the company lobby governments to reduce or eliminate environmental laws and standards in order to increase company profits?

After company management, its board, and its shareholders have heard from several different advisors, there is often a confusing and disjoint picture of governance with limited shared understanding.

Sometime there is confusion between a fiduciary(i.e. decision-making board )vs an advisory board. 

• The decision-making board has the authority to make decisions and is accountable for the results of those decisions.
• The advisory board has no authority to make decision and is not accountable for the actions of the board of directors, C-Suite and others in the company.

 What is the purpose of the corporation?

What is the purpose of your corporation?  Is it solely to make money for shareholders and the C-Suite? Does the purpose of your corporation help attract and retain the right kinds of employees?

Why have societies and governments put in place the legal and regulatory framework for corporations?  Is it to enable the creation of financial wealth for shareholders and the C-Suite?  Is it so a “business can thrive and sustain growth while enhancing the wealth of its stakeholders and the well-being of societies in which it operates?”²

The U.S. perspective on the relationship between the corporation and society has changed radically since 1981

 In 1981: “Corporations have a responsibility, first of all, to make available to the public quality goods and services at fair prices, thereby earning a profit that attracts investment to continue and enhance the enterprise, provide jobs, and build the economy.” “Business and society have a symbiotic relationship: The long-term viability of the corporation depends upon its responsibility to the society of which it is a part.  The well-being of society also depends upon profitable and responsible business enterprises.”³

In 2016: “Core guiding principles: The board approves corporate strategies that are intended to build sustainable long-term value.”⁵ There is no mention of responsibility to society.

Larry Fink, in his 2018 letter to CEOs, said “To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society. Companies must benefit all of their stakeholders, including shareholders, employees, customers, and the communities in which they operate…..Without a sense of purpose, no company, either public or private, can achieve its full potential…..And ultimately, that company will provide subpar returns to the investors”⁴

 The purpose remains fixed while operating practices, cultural norms, strategies, tactics, processes, structures, and methods continually change in response to changing realities. ⁵

 What is the purpose of corporate governance?

The purpose of corporate governance is to enable the achievement of the purpose of the corporation, consistent with the corporations’ values, morals, and ethics.

Corporate governance manages the broad set of conflicts of interests which arise. The OECD governance definition starts with relationships: within corporate leadership, as well as stakeholders and third parties.  Any relationship has the potential for conflict of interest, because company ecosystem members may have different or conflicting interests.  For example, how should both profits and costs be allocated among the ecosystem members, including: CEO, C-Suite, shareholders, employees, and society. This conflict become acute in cases of poor profits or losses.

Perhaps the greatest conflict of interest is deciding the degree to which the corporation extracts value from society versus creating value for society. An example is the decision on whether to whether to replace local community employees with lower-cost offshore staff which may benefit the off-shore communities or retain the employees in order to sustain local communities.

What are some of the different contexts for a board of directors?

• A two-tier board (a management board and a supervisory board) in Germany, and some other European countries
• A certified B Corporation in the United States
• Crown corporations in Canada
• Corporations with a Golden Share
• Multi-class shares
• Shareholders voting trust
• Unanimous shareholders agreement in a private company. Etc.

What are your next steps?

Define the words/concepts you’re using, in a glossary.  I’ve seen major confusion when the same words mean different things to different people.

#1 Survey the board of directors, C-Suite, advisory board(s), and key other members of your company’s ecosystem to determine what they perceive to be:

• The purpose of your corporation.
• Your company’s corporate governance.
• The purpose of your company’s corporate governance.
• Your board of directors’ decision-making model.

#3 Analyze the surveys to identify the implication on value creation.

#4 Agree upon: the purpose of your corporation, your definition of corporate governance, the purpose of corporate governance, and the board’s decision-making model.

#5 Review and revise corporate governance documents, processes, and technology to align with #4

#6 Review other governance within your company, to align with #4 and #5 above,

 Footnotes:

¹ Based on “G20/OECD Principles of Corporate Governance”, 2023  Page 6. I changed “stakeholders” to “other ecosystem members”, https://www.oecd.org/en/publications/2023/09/g20-oecd-principles-of-corporate-governance-2023_60836fcb.html

² Dr. Didier Cossin, Boon Hwee Ong, Sophie Coughla, “Stewardship fostering responsible long-term wealth creation”, IMD, Global Board Center 2015, https://www.imd.org/globalassets/board-center/docs/stewardship_2015.pdf

3 Ralph Gomory and Richard Sylla, “The American Corporation”, April 2013, page 6, The Wall Street Journal http://online.wsj.com/public/resources/documents/50b74ca9c91e6TheAmericanCorporation11292012.doc.pdf

⁴  https://www.blackrock.com/corporate/investor-relations/2018-larry-fink-ceo-letter

⁵ Page 17 The five most important questions you will ever ask about your organization (2008)   by Peter F. Drucker,  Jim Collins et al, I adapted.

Further reading

What is the corporate governance ecosystem?

https://koorandassociates.org/corporate-governance/what-is-the-corporate-governance-ecosystem/What is the purpose of your company?

https://koorandassociates.org/corporate-governance/what-is-the-purpose-of-your-company/

How can the board of directors create value?

https://koorandassociates.org/corporate-governance/how-can-the-board-of-directors-create-value/

Is your company planning to fail?

https://koorandassociates.org/avoiding-business-failure/is-your-company-planning-to-fail/

APPENDIX 1 Sample definition of directing the company

In the context of corporate governance, “directed” refers to the guidance, oversight, and strategic leadership provided to a company by its board of directors and senior management. Specifically:

1. Strategic direction: The board of directors sets the overall strategic direction and goals for the company, guiding its long-term vision and objectives.
2. Decision-making: “Directed” implies that key decisions about the company’s operations, investments, and policies are made or approved by the board and executive leadership.
3. Oversight: The board provides oversight of management’s actions and performance to ensure they align with the company’s goals and stakeholder interests.
4. Policy setting: The board establishes and approves corporate policies, procedures, and guidelines that govern how the company operates.
5. Resource allocation: Direction includes decisions on how to allocate the company’s resources to achieve its objectives effectively.
6. Risk management: The board directs the company’s approach to identifying, assessing, and managing various risks.
7. Ethical standards: Direction involves setting and maintaining ethical standards and corporate culture.
8. Ecosystem relations: The board guides how the company interacts with and balances the interests of various ecosystem members, including shareholders, employees, customers, and the community.

In essence, “directed” in corporate governance means that the company is guided and managed in a structured, purposeful manner by its leadership, rather than operating without clear guidance or oversight. This direction aims to ensure the company operates efficiently, ethically, and in alignment with its stated objectives.