Corporate Strategy: Who Owns it…The Board or Management?

1. Corporate Strategy:Who Owns it…The Boardor Management? Presented by: Gerald Czarnecki Chairman & CEO The Deltennium Group, Inc.

2. It is Required By… • Legal Mandates • Strategy Drives The Business • Key to Monitoring The Business • Essential for CEO Evaluation • Meets Best Practices Objectives

3. Board Must Be Strategic • View of The Future • Process • Approval • Monitoring • Feedback

4. The Board’s Role • Owns the Strategy Decision • Owes Management its Best Thinking • Protects Shareholder Value • Supports Management’s Actions • Assures Execution • Evaluates Success

5. The Board’s Role • Boards should be constructively engaged with management to ensure appropriate strategy: • Development • Execution • Modification • Performance

6. The Management Role • Help directors to understand • How the business works • Its place within the industry • What is working and what is not • Significant trends (e.g., economic, technologic, competitive, regulatory) • Develop the Process • Seek Initial Input from Board • Develop the Plan • Present Plan For Board Further Input • Modify Plan • Gain Board Approval

7. Aspects of Strategy Development

8. What Is Strategy? • Strategy is the Answer to the Question “How Are We Going To Get There?” • The “There” is the Goal or Set of Goals Established for the Enterprise • A Plan of Actions Directed Toward a Specific Set of Goals

9. Strategy Defines the Pathway… • It does not… • Define the steps to be taken • Focus on today • Detail precisely what we will do • Establish constraints • Remain fixed in time

10. A Joint Responsibility • Jointly establish the process company uses to develop its strategy • Management develops strategy • Board evaluates the strategy proposed, challenges assumptions and substance as necessary • Approves, monitors execution, and encourages changes as events require

11. Strategy and Teamwork • Management and board exchange ideas via constructive interaction • Management develops a sound strategy • Board understands and contributes to such a strategy • “Team-oriented” approach enables management to make use of board members’ expertise and experience

12. CRITICAL SUCCESS STEPS IN THE PROCESS

13. I. Define Vision, Mission & Values • Management and the board should jointly identify, discuss, and agree on the company’s vision and/or mission. • Mission statement and vision should be documented for reference in developing and supporting the strategy.

14. II. Establish Goals and Guidelines • Management and the board should: • Establish procedural guidelines for the development of the company’s strategy • Clearly identify their goals and expectations for the process • Identify core competencies to be covered

15. III. Approval & Review • Management should express the approved strategy in a written document • The development of strategy should be a topic at every board meeting until the strategy is approved • Strategy Review on Every Agenda

16. IV. Document • To ensure understanding and communication, the strategy should be documented • May range from a brief statement of goals to a book-length document • At the end of the process, the board and management should be able to: • Express the strategy concisely • Explain why it will increase the value of the company

17. V. Understanding & Acceptance • The board should encourage management to ensure that the company’s employees understand and “buy into” the basic strategy • Effective communication and use of a performance management process should ensure employees understand their role in delivering on the strategy

18. WHY A STRATEGY CAN FAIL • Values are inconsistent with Mission and Vision • Poor process that lost creativity at all levels • Failure to define a clear path for success • Lack of support from CEO and/or board • Failure to educate/enroll the entire organization • Bad data • Weak/flawed analysis

19. WHY A STRATEGY CAN FAIL • Lack of Core Competency required to achieve the objectives • Too much focus on financial metrics rather than strategic issues • Lack of attention to the “Voice of the Customer” • Lack of understanding of competition • Mismatch of directors with strategic direction of company

20. CONCLUSIONS AND KEYS TO A WINNING STRATEGY

21. Conclusions • Directors Must Know the Business • Directors Must be Involved in Strategic Thinking • Match New Directors to Strategic Direction • Directors Should be “Invested” in the Company

22. Key questions • Do management and the board understand their respective roles? • Do management and the board know the steps they will take in setting the strategy? • Are directors asking the right questions of management? • Are directors anticipating, rather than reacting to, matters of major concern?

23. Call to Action • Be constructively engaged • Review, evaluate, benchmark • Strategy on every meeting’s agenda • Be ready to • Stay the Course • Change Direction

24. Thank you! To contact us: www.deltennium.com gmc@deltennium.com Phone: 561.994.6466 Mobile: 561.306.1492