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In addition, there should be a braided wire from one of the Acorn Nuts on the Valve Cover to a bolt on the Firewall.
I believe that braid (two on my 940) is only to reduce radio noise from the ignition. I don't believe it affects the motor in any way, which is already grounded by the battery cable.
NOTE: A bad battery ground has been known to "smoke" that valve cover ground when the starter current looks for a way back to the battery. As Don Foster once said here,
"Those electrons have to get back for revolting."
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Bruce Young, '93 940-NA (current), 240s (one V8), 140s, 122s, since '63.
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