Learn the difference between a board of advisors and a board of directors and what roles they play in running a business. Providing real-life examples of governance best practices and exploring the legal requirements of different structures and the consequences of board decisions.
4. Why - Why â Why?
§ď§âŻ Management Reporting Spin
§ď§âŻ Part-Time role / Full Time Need
§ď§âŻ Forceful CEOâs
§ď§âŻ Board Skill and Experience
§ď§âŻ Unwavering Trust of Management
§ď§âŻ Unwillingness to Rock the Boat
5. The Corporation
Management Advisory Board
Board of Directors Shareholders
6. Key Linkages
Shareholder
Auditor
Board of Directors
Committees
Management
Team Advisory Board
8. Directorâs Duty
ĂďâŻFiduciary Duty-
âTo act in the best interests of
the corporation. It is this notion
that all stakeholders need to be
considered.â
ĂďâŻDuty of Care â
âTo exercise the care, diligence
and skill that a reasonably
prudent man would exercise
under comparable
circumstances.â
9. Stakeholder View
Shareholders / Public / NGOâs / Competitors / Global Markets
Employees Legislators
Scientists / Banks / Media / Customers / Investors
10. Directors Functions
ĂďâŻHire / Fire CEO
ĂďâŻReviews & Approves the
Strategic Direction of the
Corporation
ĂďâŻMonitor the Performance of
Management
11. Directors Tools
ĂďâŻInformation:
Ăď⯠Right amount to absorb key issues and
make informed decisions.
ĂďâŻProcess
Ăď⯠Independence & Diligence. Ask lots of
Questions.
ĂďâŻBusiness Judgment
â⯠Background, Insight, Experience
12. Bright Red Line
ĂďâŻVery Passive: Rubber Stamp
Ăď⯠Management sets and drives agenda
Ăď⯠Packages are late or Walked in
Ăď⯠CEO strong willed
Ăď⯠Infrequent meetings
Ăď⯠Board Never votes no
ĂďâŻModerate
ĂďâŻVery Active: Micro Management
Ăď⯠Board meets monthly, lots of Committees
Ăď⯠Board is stronger then the CEO
Ăď⯠Board Committee work extensive
Ăď⯠Board Large / Executive Committee Active
Brown Governance 2005
13. TSX Governance Guidelines
National Instrument 58-101
ĂďâŻBoard of Directors
ĂďâŻOrientation and Continuing
Education
ĂďâŻEthical Business Conduct
ĂďâŻNomination of Directors
ĂďâŻCompensation
ĂďâŻOther Committees beyond Audit,
Comp & Nominating
ĂďâŻAssessments
14. Building Your Board(s)
ĂďâŻDefine Strategic Gap
ĂďâŻBusiness Experience
ĂďâŻManagement Experience
ĂďâŻDirectors Experience
ĂďâŻPersonal Attributes
ĂďâŻReady / Willing / Able
15. Board Chemistry
ĂďâŻStrong Board Chair
ĂďâŻConstant Tending of
Culture and Composition
ĂďâŻSenior Management
Equipping Directors
ĂďâŻBias to Forward Looking
Insight vs Rear View
Judgements
16. Whatâs the Motivation?
ĂďâŻFavour to CEO
ĂďâŻStatus / Prestige
ĂďâŻInteresting & Engaging
ĂďâŻOpportunity to Network
ĂďâŻGive Something Back
ĂďâŻFun
ĂďâŻRemuneration
17. Whatâs the Risk
ĂďâŻInsolvency Liabilities:
ĂďâŻPayments to Employees
ĂďâŻPayments to Creditors
ĂďâŻPayments to Government
ĂďâŻPersonal Conduct
ĂďâŻInsider Trading
ĂďâŻJoint & Several Liability
18. Defending the Risk
ĂďâŻFiduciary Duty
ĂďâŻDuty of Care
ĂďâŻDue Diligence
Ăď⯠Corporate Indemnity
ĂďâŻDirector & Officer
Insurance
19. Key Advisory Roles
ĂďâŻâThe Customerâ
ĂďâŻâThe Geekâ
ĂďâŻâDadâ
ĂďâŻâTight Assâ
ĂďâŻâJerry Maguireâ
âArt of the Startâ â Guy Kawasaki
22. Is It Time to Act?
ĂďâŻDo they come prepared for
the meetings?
ĂďâŻCan you get your Advisors
when you need them?
ĂďâŻIs to much time being spent
on trivial issues?
ĂďâŻAre all members contributing
to critical discussions?
ĂďâŻAre you getting great return?
23. Assessment Approaches
ĂďâŻAttendance at Meetings âCheap & Cheerfulâ
ĂďâŻFor the âGood of the Boardâ
ĂďâŻOne on One Coaching Sessions
ĂďâŻSurvey - Board / Peer Performance
ĂďâŻ360 degree Feedback
ĂďâŻHigh Tech Interactive
ĂďâŻThird Party Observers
âExpensive & Comprehensiveâ
24. For the âGood of the Boardâ
Round the Table (Verbal)
ĂďâŻWhat Worked / What Didnât
ĂďâŻAreas to Improve
ĂďâŻEmotional Decompress
Survey 1 to 5 (Written):
ĂďâŻPre-materials Concise and Helpful?
ĂďâŻEveryone prepared?
ĂďâŻIssues covered Trivial or Important?
ĂďâŻDiscussion Focused Operational or Strategic?
ĂďâŻStayed on Track?
ĂďâŻWho were the Heroes? / Who were the Foes?
26. References
Ăď⯠Corporate Governance â Carol Hansell 2003
Ăď⯠Integrity in the Spotlight â Maureen Sabia & James Goodfellow 2005
Ăď⯠National Instrument 58-101- Disclosure of Corporate Governance
Practices
Ăď⯠CICA 20 Questions Series
Ăď⯠www.Wallstreetfollies.com
Ăď⯠âMoney for Nothing: How the Failure of Corporate Boards Is Ruining
American Business and Costing Us Trillions.â â Gillespie 2008
Ăď⯠Globe and Mail Board Games â 2011
Ăď⯠www.Guidedfutures.com - 2011
Ăď⯠Corporate Governance in Canada â Osler 2009