The interrelationships among shareholders, directors, and senior executives have come under the microscope only fairly recently. Having been personally involved in various capacities through the last two decades both on the public and private sides, I have seen first hand how the roles have evolved over time. Shareholders’ awareness of their interests and rights, and their expectations of the people they have put in place to act in, if not protect their interests, have heightened over time, no doubt thanks to the numerous episodes of wide-scale frauds by executives or failure to discharge fiduciary duty by directors. To a similar extent, directors are now acutely aware of the onerous liabilities they assume when consenting to sit on boards. Heavier emphasis is being placed on appointing a rising proportion of nonexecutive or even independent directors, thereby subjecting the board-management relationship to even more tension. In short, the distinction between roles is being sharpened, and the lines of responsibility are more clearly drawn.

More critically, I am convinced that strategy formulation is never accidental; it is in fact the direct consequence of the interplay of the different interests among shareholders, directors, and management. This implies that any change in the composition of ownership or management can potentially have an impact on strategy. By the same token, if the strategy were refined or radically revamped, particularly with outside help, the dynamics between the shareholders and management would undoubtedly be affected.