How CEOs and boards can rebalance toward strategy in a compliance-driven era.
Since 2002, one area of board responsibility has become increasingly dominant: fiduciary governance. In the wake of the Sarbanes-Oxley Act, signed into law on July 30, 2002, CEOs became legally accountable for the accuracy of financial statements—a marked shift from earlier protections under the Securities Act of 1933. As a result, fiduciary oversight has taken center stage. Boards spend the majority of their time ensuring compliance, managing risk, and protecting against liability.
This work is necessary—but it isn’t sufficient.
The Blindspot in the Boardroom
The board’s second responsibility—strategic governance—too often takes a back seat. Directors understand they should be spending more time here: reviewing the company’s market positioning, evaluating competitive advantage, and assessing strategic plans. Yet, in many boardrooms, these discussions are squeezed between dense financial reports and committee updates.
So, how do you shift the board’s focus back to strategy without undermining fiduciary responsibilities?
The answer lies in the board’s third responsibility: generative thinking.
Your Board Needs to Think Differently—Not Just Decide Differently.
Generative thinking is the precursor to strategic decision-making. It strengthens the quality and impact of governance by helping boards engage with complex issues before they become action items or compliance checklists. It encourages directors to lead through insight—not just oversight.
Practicing generative thinking requires three things:
- A willingness to cultivate a board culture of shared governance.
- The ability to set aside personal preconceptions in service of organizational priorities.
- A commitment to three distinct generative thinking processes.
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1. Shared Governance in Board Culture
Boards that practice generative thinking ask the foundational questions—those that come before fiduciary and strategic discussions. For example:
- Who decides what the board pays attention to?
- Does the board operate in true partnership with the CEO—or does it control the agenda?
- How are issues and opportunities framed, and by whom?
- Is there time set aside to explore emerging questions before decisions are made?
- Is the board open to new ideas, or quick to move to judgment?
- Do logistics (such as the assumption of in-person meetings) inhibit deeper dialogue?
A culture of shared governance allows for curiosity, inquiry, and exploration—creating space for boards and CEOs to engage in forward-thinking leadership, not just decision-making.
2. Replacing Personal Preconceptions with Organizational Focus
Generative thinking also requires emotional discipline—from both the board and the CEO. It asks directors to:
- Speak openly and honestly, rather than softening their input to maintain appearances.
- Monitor their own discomfort and communicate ideas with clarity and purpose—even if approval isn’t guaranteed.
- Participate in open exploration without defensiveness or territoriality.
- Accept that ambiguity and exploration are part of meaningful dialogue—not signs of dysfunction.
Likewise, CEOs need to feel confident inviting this kind of engagement without perceiving it as a threat to authority. Generative thinking isn’t about control—it’s about creating clarity together.
3. Practicing the Three Generative Thinking Modes
To build a habit of generative governance, boards can practice three core idea-generation strategies:
- Fluency: Generate a large number of ideas for a single issue—without filtering or judging.
- Flexibility: Introduce ideas from outside traditional, logical frameworks to uncover new possibilities.
- Elaboration: Deepen and refine a single idea or concept through detailed exploration and constructive input.
These processes help boards make better decisions, not by jumping to action, but by improving how they define and understand what’s at stake.
Why It Matters
Boards that operate only from a fiduciary lens may keep the organization safe—but not necessarily successful. By integrating fiduciary, strategic, and generative responsibilities, boards can truly care for the organization, its employees, customers, and investors. Generative thinking helps boards lead—not just supervise. For CEOs seeking stronger alignment, more meaningful board engagement, deeper strategic traction, and true shared governance, it’s where the most important conversations begin.
Lead the Boardroom with Clarity and Authority
If you’re ready to deepen board alignment and elevate your executive presence, click here to learn more about our Board Governance services, or contact Peter J. Dean for a confidential conversation.
Click here to read the original version of this article published on Wharton Magazine.
