Balance Score Card (BSC)
An active and engaged board is an essential part of shaping and executing a successful strategy. Followings are the primary responsibilities of corporate board of directors:
1. Approve and monitor the enterprise’s strategy, created and formulated by CEO and Executive Leadership Team
2. Approve major financial decisions
3. Select the chief executive officer, evaluate the CEO and senior executive team, ensure executive succession plans
4. Provide counsel and support to the CEO
5. Ensure compliance
However, board of directors often fall short in carrying out their five responsibilities due to limited time they have available, and the inadequate information provided to them. The board members, burdened by limited time and limited information, can participate in a more effective and efficient governance process by implementing Balanced Scorecard program. The program starts with an Enterprise Scorecard enabling the board to become more informed about the enterprise’s strategy so that it can perform better its responsibilities. The board can also create a Board Scorecard, which defines its primary outcomes, board processes, and skills, information, and meeting dynamics for more effective governance. Finally, executive scorecards enable the Board to evaluate the performance of each senior executive and his or her succession plans.
Enterprise Balanced Scorecard
Enterprise Scorecard describes the strategy of the organization, including strategic objectives, performance measures, targets, and initiatives. The enterprise scorecard has a dual role. First, and primarily, it is a powerful internal communication and alignment tool that helps the CEO implement the corporate strategy throughout the organization. It provides a brief comprehensive representation of the strategy and a summary of the organization’s success in implementing it.