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ACCA Strategic Professional · Strategic Business Leader · The board of directors

Following an external evaluation, Alder Pharma's board is told that it spends 80% of its time reviewing past financial results and compliance reports and little on strategy, risk appetite or talent. The chair is reluctant to change because the agendas satisfy all regulatory requirements. Which response best reflects good governance practice on board effectiveness?

The board should rebalance its agenda toward strategy, risk appetite and talent, handle routine items through a consent agenda, and set measurable objectives to review at the next evaluation. Regulatory compliance is only a minimum. Delegating strategy to executives or scrapping committees would weaken the board's oversight role.

  1. AMaintain the agenda because compliance with regulation demonstrates effectiveness
  2. BDelegate all strategy discussions to the executive team and report only exceptions to the board
  3. CRemove committee structures so that the full board handles all items in one forum
  4. DRebalance the agenda toward forward-looking matters, using a consent agenda for routine items and setting measurable objectives to be revisited in the next evaluationCorrect

Explanation

Effectiveness concerns whether the board adds value in setting strategy, risk appetite and oversight, not mere compliance. Rebalancing the agenda, using routine-item consent agendas and tracking actions links evaluation to follow-up. Delegating strategy abandons the board's core role. Removing committees would burden the full board and weaken specialist oversight. Compliance alone is a minimum standard.

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