The board's most important function

We continue in this issue the discussion of the proper role of outside directors in determining the strategy of a company and in evaluating capital investments in its future. The comments on Sam Felton's case in HBR's July-August issue are logically followed now by William Wommack's recommendation that a corporate objectives or strategy committee should become the usual structural means for reviewing management's recommendation for investments. The author argues that management must organize well to relate to such a committee and that someone should be clearly designated the chief strategic officer (if not the CEO, then not the chief operating officer). He outlines the processes leading to management-board involvement in funding strategies (not projects) and in determining direction.