Will CanGo need a different type of leadership to grow successfully into an e-commerce force? Strategic leadership, unlike day-to-day supervision, deals with helping the organization cope with change. Strategic leadership has become a critical skill in the 21st century as change has become both rapid and radical. That is, leaders must not only prepare their workers for the changes to come, but must help their employees embrace change and undertake it proactively for the greater good of the organization. Leaders must stimulate their employees' commitment to change and do so by clarifying strategic intent, building the organization, and shaping organizational culture. (See the figure below.)

The Executive Committee of the Board of Directors and the CEO must focus their energies on placing the most appropriate executives in key positions. These executives must then be scrutinized to ensure that they have the characteristics and management style suited to a dynamic organization. Desirable traits may include education, ability to delegate, personality, and experience. If these managers are prepared to be change agents, then the organization is prepared for change.

The Executive Committee has additional responsibilities besides ensuring that the organization is ready for change and that proper leadership is in place. The Committee must also create and renew the corporation's mission, establish compensation levels for top executives, determine the timing and amount of corporate dividends, set broad corporate policy (i.e., labor-management relations), set corporate objectives, and develop ethical and legal guidelines. The Committee members will be most successful when they:

• Promote the company's mission by connecting the firm to prominent stakeholders in their external environment.
   
• Appraise the actions of senior management taking advantage of their independence and objectivity.
   
• Ensure that board membership is balanced between inside and outside directors and includes minority representatives.
   
• Direct specific committees to oversee specialized tasks.
   
• Meet frequently to discuss corporate progress and conduct an annual evaluation of the CEO.
   
• Carefully monitor the actions of senior administrators to protect stockholders' interests.

The Committee and their appointed executives act as agents by protecting the interests of stockholders. This agency relationship assumes that management and the Committee's interests are aligned with those of the stockholders and that by maximizing corporate performance, the Committee is acting in its own best interest. However, problems can arise from agency relationships when the interests of the agents differ from the interests of the stockholders. The problems include:

• Managers pursuing growth rather than earnings (growth requires capital and devalues company stock in the short run).
   
• Managers acting to diversify risk (diversification reduces not only the risk but also the associated return).
   
• Managers avoiding risk (risk reduction reduces possible returns).
   
• Managers optimizing their personal payoffs (perquisites, i.e., corporate jets, add little to stockholder wealth).
   

 
 
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