The case has never been stronger for US boards of directors to focus their attention where it belongs: on corporate strategy. When the storms of governance scandals began whipping across the corporate landscape, boards—good, bad, and ugly—turned inward to deal with their companies' problems and to digest the new accounting compliance rules of the landmark Sarbanes-Oxley Act. Now, by and large, boards have come to terms with the new governance rules, and it's time to move on.

Linking a board's human capital to the long-term strategy crafted by management to create more value for shareholders should be the next wave of governance reform. Boards may approve strategy, but, sadly, they have only minimal involvement in shaping and developing it. Now that innovation and growth increasingly drive the top executive's agenda and major business trends emerge in the blink of an eye, strategically minded boards that forge close partnerships with management will prove to be the crucial difference between companies that create superior shareholder value and those that don't.

Not that we envision boards setting corporate strategy independently. But they must find the energy, industry savvy, and ability to debate, test, and approve the strategy that management crafts. Directors say that...