The roles and responsibilities of top executives and members of a corporation’s board of directors are different. Traditionally, executives have been responsible for determining the firm’s strategic direction and implementing strategies to achieve it, whereas the board of directors has been responsible for monitoring and controlling managerial decisions and actions. Some argue that boards should become more involved with the formulation of a firm’s strategies. How would the board’s increased involvement in the selection of strategies affect a firm’s strategic competitiveness? What evidence can you offer to support your position/answer?

Today's complex business environment, where companies are facing not just competitive, but also non-competitive forces, require stronger involvement of their board of directors in strategic planning. These external forces like macroeconomic surroundings or political pressure are all having a strong impact on the company. Also, tendency towards higher stake in ownership by passive investors that are not happy with short-term creation of value unless it is not sustainable, leads to higher shareholder's activism. Also, sector specific knowledge in today's atmosphere, where boundaries between branches are blurred is not sufficient anymore. Directors can jump in and help the management, while also having a higher role in governance, ensuring that the strategy is carried out in proper way.