The Role of the NXD in Strategy Formulation | Non-executive Director Programme Series

Strategy formulation and its subsequent execution is at the heart of what good boards should focus on. For the strategy process to work well, the NXD and executive management need to be in lockstep in their respective roles. A failure to understand their roles could lead to a lack of strategic clarity, with a knock-on impact to execution and shareholder and broader stakeholder value.

Some boards view strategy development as entirely a management responsibility, whereas others want to be the strategists and set the organisation’s direction. To be truly successful, NXDs and management must align on the company’s strategy. Each bring complementary capability to strategy formulation. Executive management brings knowledge of the markets in which they operate, organisational capability and a historic perspective whilst the NXDs bring broader experience of the strategic context of different markets and organisations and an insight of future macro trends. If these perspectives can be blended “1+1=3” but if either side play it badly “1 + 1 < 2”.

NXDs have an important role to play in strategy formulation, whether encouraging long term-thinking, promoting diversity and inclusion or innovation, but they must be aware of the risks associated with their role and work to mitigate them. They must balance the natural enthusiasm of the NXD in strategy formulation with their lack of detailed industry knowledge. They need to enable executive management to own and deliver strategy.

This session will discuss how NXDs should support strategy formulation, how and what they should contribute, and the opportunities and risks of which they need to be aware.

Guest speaker bio

Angus Cockburn

Angus Cockburn is the Non-executive Chairman of the shipping, oil and gas services business, James Fisher and Sons plc. He started the role in May 2021. He is also Senior Independent Director of plant rental FTSE 250 business, Ashtead Group plc and Senior Independent Director of Edrington Group Limited, a global drinks business with brands such as Macallan, Highland Park, No.3 Gin and Brugal rum. Prior to James Fisher, Angus was the Group Chief Financial Officer at Serco Plc, a position he held from 2014. His previous roles have included Chief Financial Officer and Interim Chief Executive of Aggreko plc, Managing Director of Pringle of Scotland, and senior finance positions at PepsiCo Inc. He was also previously a NXD of Howdens Joinery Group plc and GKN plc.

Angus is a chartered accountant with an MBA from the IMD Business School in Switzerland. He has an Honorary Professorship from the University of Edinburgh and is a member of ICAS.

For more information on the Programme including the other sessions in the series, please visit the Non-executive Director Programme overview.