Executives: No faith in company strategy

Executives: No faith in company strategy

 

Booz & Co. published results at the beginning of the year that evidenced company executives do not feel the company strategies will lead to success. A staggering 52% of those surveyed were of this opinion. The full survey and results can be found here.


The survey compiled of 1813 respondents across Asia, Australia, South Pacific, Europe, The Americas, and the Middle East and Africa.



50% of executives also believed setting strategy to be a significant challenge.

It can be speculated that changes in board structures may be the cause of these results. I have noted in previous blog posts about the changing board dynamic to one closer to a stewardship model. This has resulted in boards of directors more involved in company strategy. To speak colloquially it may be a case of too many cooks. Conversely, results by Ingley and Walt which empirically examined the role of the board (between 2000-2005) found the opinion of most executives that the board was at least generally helpful or a strategic asset, and this opinion had greatly changed in their 5 year collection period. This paper can be found under citation: Ingley and Walt, 'The Evolution of Corporate Governance: power redistribution brings boards to life' (2007) 15(5) Corporate Governance: An International Review 780

This suggests that the lack of confidence in strategy may be a result of other factors. To speculate these could include: Increased awareness of competing interests in the company i.e. stakeholders; the impact of an unstable market after the recession; uncertain political environment; evolving media sources and increase in information technology; presence of emerging economies; EU significance in company law.

The first reason as to competing evidence is supported in the survey results which saw 64% of respondents say they felt they had "too many competing priorities". Whilst 36% of respondents felt a frustration factor on management was having their decisions second guessed.

 

For more commentary on directors' duties and shareholder litigation, visit Gibbs: Law and Life, a blog centering on directors' duties and company law, particularly on interpretation and practicality of directors' duties in the 21st Century.

 

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