Richard Rumelt

The big dysfunction that happens on boards is we say, “Let’s bring in outsiders, people with different backgrounds and representing different social, political, and economic interests.” That’s great, except now you have a roomful of people who don’t understand the business. The language these people have in common is financial accounting, so that’s what they concentrate on. As long as things are going great that’s fine, but when you begin to get into trouble, the problem-solving is absent at the board level. All the board can do is replace the CEO. The role of the board vis-à-vis strategy is one we have not yet sorted out as a society.

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