Tapping the strategic potential of boards

Too many boards just review and approve strategy. Three questions can help them and executives begin to do better.

It's late afternoon in the boardroom, and the head of a major global infrastructure company's construction business is in the hot seat. A director with a background in the industry is questioning an assumption underlying the executive's return-on-invested-capital (ROIC) forecast: that the industry's ratio of leased (versus owned) equipment will remain relatively constant. The business leader appears confident about the assumption of stability, which has implications for both the competitive environment and for financial results. But the director isn't convinced: In my experience, the ratio changes continuously with the economic cycle, he says, and I'd feel a whole lot better about these estimates if you had some facts to prove that this has changed ... READ MORE

Released by McKinsey & Company - February 2013