Board of Directors as Strategy

The observations and perspectives contained in this article result from the authors' combined experience as directors of more than 40 privately-held and majority-controlled public companies, ranging in size from $1 million to $1.5 billion in annual sales.

For an extended discussion of the exercise of power in the majority-owned firm, see Osborne Richard L. , ‘The Dark Side of the Entrepreneur’, Journal of Long Range Planning (UK), Vol. 24, No. 3, 1991, pp. 26–31.

Osborne, Richard L. , ‘Planning: The Entrepreneurial Ego at Work’, Business Horizons, January-February 1987, pp. 20–4.

The board's effectiveness in assessing and working with majority owners may be enhanced by examining the executive-level competences discussed by Comte Thomas E. , McCanna Walter F. , ‘Progressive Differentiation: Improving the Strategic Act of CEO Selection’, Academy of Management Executive, November 1988, pp. 303–9.

Osborne, Richard L. , ‘Entrepreneurial Renewal’, Business Horizons, November-December 1992, pp. 58–63.

Osborne, Richard L. , ‘The Private Company Director: Strategies for Serving Entrepreneurs’, Management Decision (UK), Vol. 29, No. 4, 1991, pp. 41–5.

Colin Coulson-Thomas identifies the qualities that should be sought in directors in ‘Competent Directors: Boardroom Myths and Realities’, Journal of General Management, Vol. 17, No. 1, 1991, pp. 1–28.

Zahra, Shaker A. , and Pearce J. A. II , ‘Boards of Directors and Corporate Financial Performance: A Review and Integrative Model’, Journal of Management, Vol. 15, No. 2, 1989, pp. 291–334.

Aram John , and Cowen, Scott , Information Requirements of Corporate Boards of Directors, National Association of Accountants, September, 1983.

Pearce and David provide discussion and examples of corporate mission statements, a useful framework for developing a board's mission. Pearce John A. , and David Fred , ‘Corporate Mission Statements: The Bottom Line’, Academy of Management Executive, May 1987, pp. 109–13.

Aram John , and Cowen, Scott , ‘Strategic Planning for Increased Profit in the Small Business’, Journal of Long Range Planning, Vol. 23, No. 6, December, 1990, pp. 63–70.

Osborne, Richard L. , ‘The Private Company Director: Strategies for Serving Entrepreneurs’, Management Decision (UK), Vol. 29, No. 4, 1991, pp. 41–5.

Aram John , and Cowen, Scott , Information Requirements of Corporate Boards of Directors, National Association of Accountants, September, 1983, pp. 35–6.

The critical importance of environmental intelligence was revealed in one of the authors' study of the growth patterns of 26 firms, 20 of which had experienced a sustained growth stall, the other six largely uninterrupted growth. A key difference between the growth and non-growth companies was the former's commitment to and competence in developing environmental data. All 26 firms were led by their majority owner, served primarily industrial markets and had annual sales that ranged from about $10 million to $155 million.

Aram John , and Cowen, Scott , ‘The Directors' Role in Planning: What Information Do They Need?’ Journal of Long Range Planning, Vol. 19, No. 2, 1986, pp. 117–24.

For a discussion of the particular problems of developing executives in majority owned companies, see Osborne Richard L. , ‘Increasing Employee ROI in the Small Business’, Business, February-March 1988, pp. 37–41.

Of the 31 majority-owned companies studied by one of the authors, two-thirds had annual sales between about $15 million and $50 million, the others ranged from $3 million to $225 million of revenues. Businesses were a cross-section serving industrial, consumer and service sectors.

The impact of accountability on the performance of majority owners is examined in Osborne Richard L. , ‘When Private Companies Go Public’, Management Decision (UK), forthcoming in Vol. 30, No. 1, 1992.

Aram John , and Cowen, Scott , ‘Strategic Planning for Increased Profit in the Small Business’, Journal of Long Range Planning, Vol. 23, No. 6, December, 1990, pp. 63–70.

The value-building tension of confronting reality with new vision is explored by Senge Peter M. , ‘The Leader's New Work: Building Learning Organizations’, Sloan Management Review, Fall 1990, pp. 9–10.