Serving on a board is demanding in any era. Today, geopolitical risk, economic uncertainty, technological disruptions, and consideration for a growing number of interest holders raise the bar even higher. In our conversations with directors from across Canada, one theme has stood out: alignment matters more than ever – among directors, and between the board, CEO, and management team.
But how do you maintain alignment in a world that shifts daily – especially when key decisions are high-stakes and potentially polarizing?
The Board’s Triangle
Hubert Joly, former chairman and CEO of Best Buy, senior lecturer at Harvard Business School, and author of The Heart of Business: Leadership Principles for the Next Era of Capitalism (Harvard Business Review Press, 2021), observed that in times of disruption, teams need a “guiding frame to be effective and energized when the unexpected invariably happens”.
He visualizes this as a triangle whose points represent purpose, strategy, and culture. As Joly describes, “each angle connects with and shapes the other two, and if one changes, the other two must evolve and adjust to maintain balance and shape, or the triangle breaks and falls apart.” With alignment comes the confidence to tackle the unexpected.
While Joly’s frame focused on the management team and organizational culture, the same applies to boards. Purpose, strategy and board culture are deeply interconnected. Misalignment in one corner destabilizes the rest.
A director’s perception of the company’s purpose and values shapes how they approach strategy and contribute to the board’s culture. Likewise, the board’s culture shapes directors’ understanding and approaches to the company’s purpose and strategy. When those connections fray, the board and management can find themselves speaking different languages – leaving everyone feeling surprised, frustrated and lacking in confidence and trust. As those who often pay the heaviest price for misalignment, management should be a meaningful participant in the alignment discussion and effort.
When the Triangle Wobbles
Not all disruption to the triangle will come from the outside; internal shifts – a new Chair, significant changes in investors or shareholders, leadership transitions, strategic pivots – can all add pressure and unsettle the balance.
Without an intentional, unifying effort to align, directors fall back on their individual assumptions built from other boards and experiences. The interdependence of purpose, strategy and board culture requires a holistic and aligned understanding. While this may appear straight-forward in theory, it is complex in practice.
| Client Story Watson worked with a company that had recently attracted new investors, two of whom were entitled to nominate a director. Both nominated directors had strong track records of excellent board service and were eager to contribute their knowledge and experience. Up until that point, the company had been producing good results and the board functioned like a typical public company board, engaging at a strategic level with infrequent updates in between meetings. When the company hit an unexpected and significant headwind, the two newest directors leaned in hard, eager to roll up their sleeves to dig in to help navigate the storm with their private equity backgrounds. They frequently requested more data, more meetings, and took a more hands-on approach with management. Some of the directors saw it as over-reach; management saw it as mistrust. Through a board and director evaluation, we found that everyone had positive intent, but not a shared understanding of board cultural norms or sense of urgency around strategic growth. Once the board and management reset expectations for engagement and strategic pace, alignment returned. The management team was better able to leverage the insights of the board and focus on executing the strategy and delivering on growth. Everyone was speaking the same language again and the triangle regained its balance. |
Realignment Questions
To help you ensure your board’s triangle is well balanced, use these questions to spark conversation and ensure alignment among directors, and with the CEO and management team.
Purpose and Values
Corporate purpose goes beyond maximizing shareholder value – it focuses on creating long-term value for all stakeholders and serves as a compass to guide the company’s decisions and actions, and shape its culture. Purpose should be durable, not reactive.
Similarly, values should inform how the board makes decisions, weighs options, considers various interest holders, and should also not easily shift or bend to external factors. Revisiting and reaffirming the company’s purpose and values helps avoid accidental drift in a rapidly shifting environment. Ask:
- Does our purpose still resonate?
- Do our decisions – including resource allocation – reflect our purpose and values?
- Do we model the company’s values in how we work together?
- Does our purpose continue to attract talent?
- Does our purpose continue to inform our choices in customers and suppliers?
Strategy
Boards vary in how deeply they engage in strategy, depending on experience, capacity, and context. The key is to align on expectations – when and how the board contributes to and reviews strategy. Ask:
- What is the board’s role in developing strategy? How and when will we be engaged?
- What are the expectations for board engagement around changes in strategy?
- Are we discussing strategy frequently enough?
- Are we aligned on strategic goals and our definitions of success?
- Do we share a similar sense of ambition and urgency?
Board Culture and Engagement
Board culture refers to the shared values, beliefs, assumptions, and norms that influence how directors work together. It encompasses the unspoken rules, mindsets, and expectations that drive discussions and decision-making. Ask:
- Are our expectations for board engagement clear and shared?
- Do we serve as a thought partner to the CEO?
- Are we advancing decisions at the right pace?
- Where might we need more urgency and intensity?
- Which issues call for generative discussions with management?
Bringing It Full Circle
As the saying goes, everyone has a plan until they’re punched in the face. That “punch” could be tariffs, high interest rates, global conflict or even changes in leadership. Before reacting, take a moment to realign as a board. Even the most clever strategy won’t succeed if your purpose, strategy, and culture aren’t in sync.
When the board, CEO, and management team speak the same language, you can navigate whatever comes next.
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