The Strategic Board: the changing role of directors in developing and maintaining corporate capability

Faced with major shifts in public opinion and societal change on an international scale, together with the strategic requirements of newly emergent forms of business structure, new technologies, globalisation and new forms of competition, modern companies are facing a crisis in their boardrooms. Traditional forms of governance architecture are being challenged and boards are under pressure to develop a broader mindset and new skills to deal with the uncertainty of higher‐level issues such as direction‐giving and implementation of strategy. The paper proposes a framework developed from research which examines the selection, evaluation and performance of boards of directors in New Zealand. From this research a need for strategic vision and leadership has clearly emerged as a key requirement in director capability, but in practice there is an acknowledged variation among individual directors in terms of their competence in this regard. Implications for further research suggest the need to explore the strategic role of the modern board in value creation, the extent to which directors perceive a link between strategy and corporate governance and their level of participation in this process.