In a recent webinar hosted by BoardWorks and BoardPro, John Page and Graham Nahkies sat down together to discuss the importance of boards to undertake independent thinking from management in order to provide management proper external guidance.
In reference to Lewis Caroll’s Alice in Wonderland, Nahkies explained that when Alice met the Cheshire cat after getting lost, the cat said to Alice, “If you don’t know where you’re going, it doesn’t matter where you’re going.” The same can be said about organisations. If the board doesn’t have clarity on where the organisation is today and where it wants to go, its management and therefore the company won’t be as effective.
In fact, the two stated that this future goal should be so clear that the board should have their own statement of purpose as to why the company exists. “ … we challenge organisations to write their purpose statement in the phrase, ‘Organisation XY exists so that.’ The ‘so that’ forces people to describe an external benefit, not to be a leadership organisation or anything internal in place,” said Page.
This clarity, says Nahkies and Page, yields a myriad of benefits, which include, clearer and more structured management reporting and board meetings. And according to both, it’s a clarity that has to be provided by the board before any strategy can be planned.
“It has the idea that your purpose is the True North of your compass, so that everything you do should be judged against that. If the winds blow you off course a little bit, back to True North again. If an opportunity comes up, that's sort of way out here to the far West, well, it's actually not going to work for you.”
Click here to watch the full webinar and understand why boards are often referred to as “the guardians of purpose” and how with a clearer, well-communicated and understood purpose, companies are able to get further.