For decades, many boards have been defined by their role as organizational guardrails — protectors of downside risk, overseers of compliance and stewards of governance integrity. That role remains indispensable. But, in today’s environment of persistent disruption, accelerating digital transformation, and heightened competition for talent and capital, that mentality is no longer sufficient on its own.
According to Michael Montelongo, director of Civeo Corporation and Palmex Alimentos SA de CV, president and CEO of GRC Advisory Services LLC and member of the Private Company Director editorial advisory board, “Govern or growth? It’s both Gs! The most consequential risk many boards face today isn’t taking the wrong strategic risk; it’s governing so cautiously that the future never gets built.”
Boards that focus primarily on what might go wrong risk missing a far more consequential question: What can go right — and what is the board’s role in enabling sustainable growth?
According to John Driver, director and chair of the risk and compliance committee of City First Bank, “Boards often think of risk oversight as a constraint on growth. A better analogy is a car’s brakes. Brakes are designed to slow down or stop the car safely, but their real value is that they make speed possible. Without brakes, no one would drive fast. Similarly, clear risk guardrails give leadership the confidence to pursue growth, knowing the organization can respond decisively when conditions change.”
The most effective boards do not treat risk as something to minimize in isolation. They treat it as designed control that allows the company to move faster with confidence with a board operating model that architects growth discussions with benchmarked market data in each meeting. When guardrails are clear, boards and management spend less time debating whether something is allowed and more time focusing on whether it is worth doing.
Growth: Where Some Boards Fall Short
Directors acknowledge the goal of growth. Yet, some boards struggle to translate that aspiration into action.
According to Tom Leppert, chair of Austin Industries and director of Fluor Corporation and ConstructionBevy, “In part, many board members have never been in the position to drive or understand growth. They assume it is simply a set of assumptions on paper rather than understanding the deep and transformative shifts in strategic, organizational and operational components that need to take place. It is complex.”
However, nearly one-third of directors say their board adds little or no strategic value and close to half believe their board may actually be holding the organization back. The root cause is not a lack of diligence, effort or good intent, but a governance model and operating model optimized for hindsight rather than strategic foresight.
Rodney Adkins, international board director and chairman of the board of Avnet, director of UPS and Grainger, and president of 3RAM Group, says, “Being an effective director is not about always knowing the answers to a business problem, challenge or an opportunity, although you may know because of your background, skills and experiences. It is about having the right level of curiosity that allows you to ask the insightful questions that enable management to consider the best alternatives as they execute their responsibilities in running the business. This is what good governance and oversight is all about.”
In an era where business models, technologies and customer expectations evolve faster than governance cycles, boards must recalibrate how they create value. Board members should follow the company and the company’s top competitors and be “in the know” on key marketplace forces, looking for opportunities to ask questions about growth.
Boards add the most value when they are explicit about the what and the why, as well as the boundaries of growth. Strategy, capital allocation priorities, risk tolerance and escalation thresholds belong squarely with the board. Execution belongs with management. Boards that blur that line often feel busy and engaged, but actually slow decision-making and dilute accountability.
From Risk Avoidance to Responsibility of Strategic Optionality
According to Nita Kohli, director of Interos, “Successful boards don’t just reduce downside. They expand the company’s set of winning choices. Governance is the discipline that makes bold strategy fundable.”
High-performing boards cannot abandon risk oversight, but they can reframe it. Rather than treat risk solely as something to be minimized, they view it as a source of strategic optionality carefully elevating future upside.
In this reframed approach, risks are analyzed not just for their downside impact, but for the strategic responses they enable. For example:
• Heavy customer concentration and regional territory gaps highlight the need — and opportunity — to diversify channels, markets or customer segments.
• Capital constraints encourage the pursuit of asset-light strategies, partnerships or alternative financing models that can improve flexibility and returns.
• Underutilized data assets present opportunities to develop new products, services or revenue streams rather than remaining a latent liability.
The following subset of board assessment questions provide key insight on whether the board is providing balanced governance by actively enabling long-term growth while maintaining appropriate oversight of risk:
- Does every board meeting include a market-, competitor- or innovation-focused discussion?
- Has the board aligned with the CEO on long-term growth ambition and risk appetite?
- Has the board articulated what growth means for this company (e.g., markets, business models, innovation horizons)?
- Has the board approved a clear capital allocation framework across core, emerging and future businesses?
- Does the board include directors who have built and scaled businesses, not just overseen them?
- Has the board reviewed the C-suite team with a question around who among them has driven quantifiable growth and is responsible for this effort in concert with the CEO?
This perspective allows boards to maintain rigorous risk oversight while ensuring risk discussions also inform strategy, innovation, and short, medium and long-term value creation.
“Growth doesn’t stall because boards lack diligence. It stalls when governance is backward-looking and talent with a growth mindset disengages. Boards that actively steward strategy and leadership capability protect the future, not just the balance sheet,” says Marie Meliksetian, chair of the board development task force of Private Directors Association and CEO of Reliance Solution Services.
As innovation scholars documented in a recent Forbes article, failing to support a culture of innovation may ultimately represent the greatest risk of all. This dynamic was amplified coming out of COVID-19. As many organizations shifted into prolonged cost-containment and restructuring modes, growth-oriented leaders — those wired for innovation, experimentation and risk-taking — were often the first to disengage and exit. When that happens, growth doesn’t fail loudly; it quietly leaves the building. Boards without growth-finessed directors are not immune to this dynamic. When governance culture unintentionally favors stability over ambition, the most future-oriented voices tend to fall and remain silent. A company’s only future is repeated cutting and ultimate decline.
According to Ralph Goff, member of the advisory boards of Dataflow Security, Catalyst and Qrypt, and retired national security executive for the Central Intelligence Agency, “An effective, value-added board should not only help company executives accurately define risks, but should help determine if those defined risks are actually worth assuming — and managing — as opposed to simply avoiding.”
Too often too many traditionalists or functional experts are more comfortable with the growth-voices silent. That’s not a good place for boards to play today.
The Importance of the Right Voices in the Boardroom
This shift requires more than agenda changes. It requires deliberate choices about board composition, incentives and information flow.
Leppert says, “To generate real growth, it takes a hard look at the board. It will force a realignment of not only management, but the board itself. Ask the hard questions: Is our board made of the individuals and skills necessary to really motivate, drive, support and contribute to growth?” This initiates growth governance ‘difference makers’ and positively changes the discussions in the boardroom.
Boards should review their skills matrix to deliberately include board professionals who have led innovative and disruptive quantitative business growth as an entrepreneur inside a company, taken political risk and driven it out “against all odds,” or outside a company as a sole entrepreneur. The skill set, mental wiring and leadership know-how of these individuals is very unique, causes them to ask different questions in the boardroom and is necessary as a key matrix skill.
Extensive research from the Journal of Management, among others, shows that boards with directors who have built and scaled businesses — founders, entrepreneurs and digital operators — think and behave differently. These directors bring pattern recognition, comfort with ambiguity and what researchers describe as “opportunity-focused cognition.” They ask questions that inspire experimentation, challenge legacy assumptions and encourage management teams to explore new markets and business models rather than optimize the status quo.
Boards that include directors with real experience in scaling digital platforms, deploying AI or navigating rapid growth are more likely to:
- Invest earlier and more effectively in innovation.
- Allocate capital with a longer-term growth horizon.
- Accelerate decision-making and shorten innovation cycles.
The impact is not theoretical. Deloitte recently published a study that links entrepreneurial and technology-savvy board composition to higher levels of strategic experimentation, stronger digital performance and improved long-term value creation.
According to a large sample study of more than 5,500 ventures, companies that add at least one independent (non-investor/non-founder) board director achieve significantly larger follow-on funding rounds and have a greater probability of a high-value IPO.
According to Jonathan Johnson, a director of VC-backed Nursa as well as The J.M. Smucker Co. and Bloom, “When independent directors join venture-backed companies, they can bring industry expertise and act as strategic ‘arbitrators’ and value-creators, roles that correlate with stronger financial outcomes.”
A Distinct Advantage — If Private Boards Use It
Private company boards are uniquely positioned to lead this evolution. With fewer regulatory constraints and less pressure from public quarterly earnings cycles, private boards can engage more deeply in shaping long-term strategy, business-model innovation and leadership development.
Yet, too many private company governance structures still reflect an older model of supervision rather than partnership. While most private boards discuss human capital, far fewer set clear expectations for how strategy, leadership capability, succession and culture are measured and reported, even though leadership depth is often the biggest constraint on scale.
Private boards that fully leverage their flexibility — by spending more time on strategy, refreshing board composition and supporting longer-term investment arcs — can turn governance into a competitive advantage. Of course, private companies must also have the business-building C-suite executive responsible to drive this growth. Without that skill set, know-how and experience, the best innovative ideas will stay “at rest” on a paper of well-intentions yet no action or outcomes.
Puja Agrawal, director of Quantifind, advisory board member of Centana Growth Partners and strategic operating partner for Kayne Anderson, says, “Winning companies are built on sustainable competitive moats. In today’s environment, preserving and extending those moats is no longer a passive oversight function. It is a core responsibility of the board. Ultimately, board impact comes down to ensuring long-term success by accelerating deliberate and disproportionate capital allocation grounded in market trends, technology and competitive moves toward the company’s fastest-compounding opportunities, before they are obvious to the broader market.”
The Modern Board Balance
According to Joelle Marquis, president and senior partner of Arsenal Capital Partners and former director of The Scarlett Group, “The role of the board is evolving to serve as the compass, not the control. Growth does not happen by accident. It happens when boards are engaged in setting direction in partnership with management teams, shaping capital priorities and ensuring the organization is built for what comes next.”
As boards lean further into growth, they must also manage a critical boundary. Increased engagement should not translate into micromanagement. While a growing number of CEOs express concern about boards drifting into operational decision-making, the solution is not less engagement, it is better-quality engagement.
Great boards partner with management on the what and why of growth — strategic ambition, capital priorities and risk appetite — while explicitly holding management accountable for the how. They have a trusted relationship with the CEO that can be leveraged as a strategic advantage.
According to David R. Morris, director of the American Royal Association, former chairman of Epic Entertainment, and founder and former CEO and president of ZuPreem,“The board’s primary responsibility in this area is to ensure that the company has processes in place to manage growth and transformation from a longitudinal perspective, with a bias toward consistent incremental operational improvement, including growth.”
Redefining Board Value Creation
The board’s role is evolving — from guardian to growth enabler, from referee to strategic partner. Boards that embrace this shift do not abandon governance discipline. They elevate it by aligning oversight with long-term value creation.
“Leadership teams pay close attention to what boards prioritize,” says Marquis. “When boards consistently focus on long-term direction and capability, leaders gain the confidence to think bigger and act decisively.”
The most effective boards focus on:
- Setting strategic direction and guardrails.
- Shaping capital allocation priorities.
- Ensuring leadership capability for the next phase of growth.
- Asking the questions management may be too close to ask.
In an environment where competitive advantage is increasingly defined by speed, innovation and adaptability, the question for boards is no longer whether growth belongs on the agenda. It is whether the board is structured, composed and engaged to meaningfully help deliver it.