Boards of directors: the strategy audit

Because operating management is "not in a good position to establish corporate strategy alone", strategic errors by corporations are common. Boards of directors can conduct annual audits of corporate strategy, seeking the following elements: 1) definition of specific business segments to be served; 2) identification of necessary capabilities for most effectively serving these elements; 3) outlining of a "realistic program for developing and maintaining superiority in the key capabilities"; and 4) relation of these concerns to broader corporate issues.