Whether you are considering forming a board or want to enhance existing governance practices, understanding the role of the board and expectations of directors is an essential ingredient to successful, value-added governance in private companies. Company leaders and board directors often struggle to determine the role of the board and how to separate board responsibilities from those of ownership and management. In this webinar, the audience will learn what companies are really looking for (or should be) from their boards, and the many ways that boards contribute to private company success. We will cover the definition of a board, typical expectations of a director, board oversight vs. management responsibilities, and many other basics of board formation and operation. Part of the webinar series: Board of Directors Boot Camp 2021. See more at https://www.financialpoise.com/webinars/

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Practical and entertaining education for
attorneys, accountants, business owners and
executives, and investors.

4. Disclaimer
The material in this webinar is for informational purposes only. It should not be considered
legal, financial or other professional advice. You should consult with an attorney or other
appropriate professional to determine what may be best for your individual needs. While
Financial Poise™ takes reasonable steps to ensure that information it publishes is accurate,
Financial Poise™ makes no guaranty in this regard.
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5. Meet the Faculty
MODERATOR:
Mark Trembacki – Chief Strategy Officer, Busey Bank
PANELISTS:
Pankaj Amin, Managing Director - SC Ventures
Will Clarke, Founder & President, Clarke Growth and Sustainment Strategies
David Spitulnik, Managing Partner, Spitulnik Advisors
Jeremy Waitzman, Partner Sugar Felsenthal Grais & Helsinger LLP
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6. About This Webinar -
Roles & Responsibilities: A Primer
Private company owners, including family businesses, ESOPs, and private equity owners,
often have different expectations for their boards than is common in publicly traded firms.
Besides being much less encumbered by regulatory compliance, many private firms are
looking for a completely different kind of engagement from directors. In companies with new
boards, leaders and directors often struggle early on to determine the role of the board and
how to separate board responsibilities from those of ownership and management. In this
webinar, the audience will learn what companies are really looking for (or should be) from
their boards, and the many ways that boards contribute to private company success.
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7. About This Series - Board of Directors Boot Camp
More and more privately-held companies are exploring the benefits of effective corporate governance
and, consequently, are working towards formalizing board processes. This trend has been driven in part
by the ever-increasing pressure that companies face from foreign competitors and increasing government
regulation. The demographic wave of the huge number of businesses whose leadership is getting ready
to retire and which, therefore must engage in succession planning is another significant factor. Yet, many
private companies delay implementing a more formalistic governance regime or simply do not
understand they even need it. This webinar series discusses various aspects of good governance in
private companies. Applicable to owners, executives, directors and their respective trusted advisors, this
webinar series brings a variety of experiences and perspectives on the most common questions around
private company governance.
Each Financial Poise Webinar is delivered in Plain English, understandable to investors, business owners, and
executives without much background in these areas, yet is of primary value to attorneys, accountants, and other
seasoned professionals. Each episode brings you into engaging, sometimes humorous, conversations designed to
entertain as it teaches. Each episode in the series is designed to be viewed independently of the other episodes so that
participants will enhance their knowledge of this area whether they attend one, some, or all episodes.
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8. Episodes in this Series
#1: Roles & Responsibilities: a Primer
Premiere date: 3/25/21
#2: The Effective Director
Premiere date: 4/22/21
#3: The Effective Board
Premiere date: 5/20/21
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9. Episode #1
Roles & Responsibilities: a Primer
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10. What is a Board of Directors?
• Usually legally required
• Represents ALL shareholders
• May consist of inside directors (shareholder, officer, management) and outside
• directors (independent executives)
• Provides “insight” and “oversight”
• Structure and procedures are defined by the organization’s bylaws
• Typically has a formal nomination/election process
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11. What is the Purpose of the Board?
• To enhance the quality of strategic decisions
• To ensure the CEO is doing his/her job
• To ensure a strong succession plan is in place for continuity
• To ensure the Company is compliant with applicable law, regulations and ethical
policies
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12. Public Company Vs. Private Company: What’s the
Difference?
• Public companies
 Full disclosure of all financial records to the board
 Responsible for the hiring and firing of the CEO
 Subject to Sarbanes-Oxley and associated compliance requirements
• Private companies
 Often, a group of major “insider” shareholders exist; care must be taken to
consider minority shareholder interest
 The CEO is usually a major shareholder of the company
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13. Types of Boards
• Advisory Board
 Common in private companies
 Typically a transitional structure
 Members engaged by the Company
 Informal body that provides non-binding advice to management
 Work for the CEO - do not have the ability to hire/fire CEO
 Cannot force management to take a specific action
 Typically no audit oversight
 Do not share the same liability and compliance costs of their Fiduciary counterparts
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14. Types of Boards
• Fiduciary Board
 Required for public companies
 Elected by the shareholders
 Responsibility to act as a Fiduciary for ALL shareholders
 Typically execute governance best practices (because they are liable if they
don’t)
 Oversight/approval of strategic plan, budgets, major projects, and policies
 Monitor the company’s financial structure, performance, and culture
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15. Types of Boards
• Fiduciary Board (cont’d)
 Hire/fire/evaluate the CEO and approve and oversee compensation
 Evaluate other execs and family members - with consequences
 Responsible for oversight of succession
 Comply with law
 Ensure the company’s compliance with the law
 Insiders versus independents
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16. What is Fiduciary Responsibility?
• Duty of care
 Officers and directors must exercise ordinary and reasonable care in their duties
 They must act in a manner which is in the best interest of the company
 Board members are protected from personal liability through “The Business
Judgment Rule” which states that when making a business decision, the directors
of a corporation acted on an informed basis, in good faith and in honest belief that
the action taken was in the best interests of the company.
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17. What is Fiduciary Responsibility?
• Duty of loyalty
 Board members must give undivided allegiance to the company when making
decisions affecting the company, all personal interests must be put aside
 Board members must disclose all conflicts of interest and exclude themselves
from any discussion or vote in which they may have a personal interest
• Duty of obedience
 All board members must act in accordance with the company’s governing
documents such as, articles of incorporation and bylaws as well as all applicable
laws and regulations
 Duty of disclosure arises if shareholders are called on to act
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18. Additional Obligations of a Fiduciary Board
• Audit committee reviews
• Analysis of material lawsuits
• Whistleblowers
• Examination of corporate risk exposure
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19. Why Choose an Advisory Board?
• They can focus on strategy and avoid liability and compliance constraints associated
with Fiduciary Boards, that being said, you should still hold your Advisory Board to
Fiduciary Board standards
• Advisory Boards have the benefit of choice
 They can avoid defensive topics and focus instead on the offensive topics such as:
o Bringing in new customers
o Expanding into new markets
o Introducing new products
o Attracting great talent
o Increasing profitability
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20. Tips for Establishing a Board
• Must Have A Charter
• What Do You Expect The Board To Do?
• What Collective Skills Should Be Brought To The Table?
• What Do You Expect Each Board Member To Do?
• How Often Will You Meet As A Group?
• How Often Will You Talk With Them?
• Can (Should?) Include Outsiders As Well As Insiders
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21. Common Skills and Experiences Shareholders Look
for in Candidates
• Prior to an interview:
 Board experience
 Strong financial literacy
 Strategic planning skills
 Industry or related industry experience
 Strong leadership skills
 Experience with effecting change or significant growth within an organization
 Private company experience
 A strong network
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22. Common Skills and Experiences Shareholders Look
for in Candidates
• During an interview:
 Strong listening skills
 High ethical standards
 Decision making ability
 Appropriate management of “air time”
 A proclivity for inclusions
Adapted from: Creating a Harmonious Board by Kelly LeCouvie, PhD
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23. The Case for Paid Board Members
• Companies that pay boards tend to get more return on investment
• Board members have a vested interest (time, energy) as do you
• Shows you understand the value
• Communicates expectation of high value in return
• When paying, you’ll prepare more: spend 2X the amount of time of your meeting in
preparing (agenda, materials, etc.)
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24. What it Takes to Make a Board Member Successful
• In-depth knowledge of the business
• Ability to constructively challenge the executives
• Set strategies and hold the executives accountable
• Understanding that being a board member is not a side job, but a real time
investment
• Asking the right questions is often more important than having the answers
 Ask open-ended questions. Don’t ask “Why?” “How?” is a better formulation to
activate positive thinking
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25. What it Takes to Make a Board Member Successful
 Understand the underlying thinking of the company and its leaders
 Ask follow-up questions. Avoid making statements after the initial question, ask
another question.
 Enjoy the silence. One can learn and contribute more than from someone merely
filling a gap.
 Learn. A board member might not always have the answer, but others might. A
good board member may be able to help others think and learn even though he/she
is not the expert.
 A board member should take notes. This demonstrates respect and – for many –
helps give extra time for effortful thinking.
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26. Specific Skill Set for a Board Member
• Preparation
 Being well-prepared before every meeting is an obvious and absolute
prerequisite to be able to contribute and add value to the discussions. Without
spending a great deal of time reading and thinking about the issues the company
faces, a board member can neither formulate the powerful questions nor
constructively challenge the discussions.
• Punctuality
• Positivity
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27. Specific Skill Set for a Board Member
• Respect
 As a non-executive board member, the most effective contribution a person can
make is to help the executives excel. A director needs to be self-confident and
control his/her ego in a way that enables them to listen and work in the team without
engaging in the operational activities.
• Good listener
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28. Specific Skill Set for a Board Member
• Team player
 A person is not on the board to be liked or accepted and is often not there for the
money. Instead, the board member is there for the owners’ and the executives’ sake
– not their own.
• Honesty and transparency
• Responsiveness
• Loyalty
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29. Board Member Contributions
• Expertise
• Self discipline and accountability
• Objectivity
• Board experience
• Strategic Thinking
• Insight into key people, empathic counsel
• Network
• Professionalizes behavior
Adapted from Building a Successful Family Business Board by Pendergast, Brun de Pontet and Ward
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30. Common Items that Can Hinder a Board
• Lack of clarity on the roles of individual directors and the board as a whole. Role
ambiguity slows decision-making and causes unnecessary director conflicts.
• Poor Process management hinders effective board preparation, meeting management,
and communications. This results in indecisiveness and a lack of urgency on critical
challenges facing the organization.
• Lack of alignment and agreement on company strategy causes disinterest among board
members, who then simply default to tackling regulatory and compliance issues. Poor
strategic alignment also hampers a board’s ability to prioritize issues and set their near-
term agendas. This often causes board disruption and sends damaging signals to
financial markets.
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31. Common Items that Can Hinder a Board
• Poor team dynamics fracture boards and lead to power struggles. Like any effective
working group, a board should be comprised of professional peers who respect and
work well with each other.
• Board composition is a serious impediment, if not done right. Today’s challenges
require new perspectives and skills. But boards often lack the ability to objectively
evaluate their makeup to determine if they have the right people and skills at the
table.
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32. Sample Board Agenda
Source: Jeremy Barlow. www.boardeffect.com/blog/role-of-the-board-chair
ABC Company
123 Main St.
Anytown, USA 12345
AGENDA
January 1, 2016
Time: 9:00 am
Location:
Company Corporate
Office
123 Main St. Suite A
Anytown, USA 12345
I. Call to Order
II. Approval of the Agenda
III. Approval of the Minutes
IV. Reports
1. Executive Director
2. Finance Director
3. Nominating Committee
4. Governance Committee
5. Public Relations
Committee
V. Old Business
1. Board nominations
2. Contract negotiations
VI. New Business
1. Special Event
VII. Comments and
Announcements
VIII. Adjournment
Next meeting date August 1,
2018
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33. The Role of the Chair
• Lead and guide the rest of the board
• Direct liaison between the board and management
 Works with CEO on board meeting agendas
• Facilitate board meetings and guide committee work
 With the CEO the chair recommends committee chairs and serves as an e-x-
officio member of all committees
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34. The Role of the Chair
• Upholds and addresses rules of conduct
• Recruits and develops new board members
• Conducts self-evaluations
• Plans for succession
• Balances participation of Board members (encouraging quieter members to speak,
etc.)
Source: Jeremy Barlow. www.boardeffect.com/blog/role-of-the-board-chair
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35. Family Business
SAMPLE:
ROLES OF OWNERS
VERSUS DIRECTORS
VERSUS MANAGEMENT
IN A FAMILY BUSINESS
D = Decide
I = Input
Source:
Kelly LeCouvie, PhD
The Family Business Consulting Group
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36. Common Board Committees
• Audit
• Compensation
• Governance and Nominating
• Finance
• Risk Management
• Technology and Innovation
• Executive
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37. Sample Committee Responsibilities
• Audit Committee:
 Recommend and review selection of outside auditors.
 Assure the efficient completion of internal and external audits.
 Review and approve annual internal and external audit procedures, including the
methodology and areas of audit and revisions to the annual report.
 Review and approve accounting, legal, and financial policies.
 Ensure methods are in place for identifying and investigating potential fraud.
 Review financial statements before they are presented to the full board.
 Ensure shareholders receive adequate financial information from the Company.
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38. Sample Committee Responsibilities
• Compensation Committee:
 Supervise the design and implementation of policies related to compensation,
performance evaluation, employee development, and retirement.
 Approve the personal development plans for senior-level executives.
 Approve annual salary increases for senior-level executives.
 Conduct a formal performance evaluation of the CEO.
 Review performance evaluations of senior-level executives.
 Oversee the development of succession plans for senior-level management.
 Propose programs for professional development for shareholders.
 Adopt 409A valuations regularly in connection with administration of stock plan
 Approve option grants
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39. Sample Committee Responsibilities
• Governance Committee:
 Identify and recommend independent director candidates.
 Recommend candidates for board officer positions and board committee
membership.
 Develop a succession plan for the board chair.
 Make recommendations to the shareholder assembly of appropriate
compensation levels for board members.
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40. Sample Committee Responsibilities
• Governance Committee (cont’d)
 Coordinate the annual board-evaluation process.
 Develop and recommend long-term board goals for approval by the full board.
 Ensure that all committees have established objectives and charters.
 Oversee the board orientation process for new board members.
 Assure that a code of ethics guides business and director conduct.
Adapted from: The Chair Forum, The Family Business Consulting Group
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41. Value of Independent Directors on a Board
• Increase professionalism/decrease conflict in the board room
• Lead contentious/confidential matters such as performance management and
compensation
• Bring just-in-time strategic knowledge
• Mentor for key management/successors
• Knowledge of practices in other leading firms
• Challenge assumptions
• Encourage board discourse to stay at strategic/oversight level rather than in
operations
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42. The Non-Strategic Value of New Directors
Much attention is given to the strategic advantages of strong directors on your board.
Yet, in addition to traditional benefits, there are often many unexpected contributions that
are just as important as the strategic input directors provide in the boardroom. These can
include:
 Meeting preparedness: Directors tend to increase their preparation process when
new directors are added to the board. The CEO is likely to think more deeply about
the kind of preparation required for new directors to succeed.
 Board education: Incumbent directors may be prompted to become more educated
about roles and responsibilities of good directors. It may lead to more formality and
sophistication around board function.
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43. The Non-Strategic Value of New Directors
• Mentorship and leadership development: Directors often become mentors or confidantes
to the CEO and other stakeholders.
• Strong board culture: Good directors possess attributes that help facilitate group
cohesion. New directors may cause inside directors to be instinctively on their best
behavior. Skilled directors will work hard to manage dissension.
Adapted from: “The Non-Strategic Value of Directors” by Kelly LeCouvie, PhD. The Family
Business Advisor published by The Family Business Consulting Group.
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44. Adding Independents Increases Board Value for
Leadership
Percentage of a sample of family-owned business CEOs rating their board as effective based
on involvement of independent directors.
Source: Building a Successful Family Business Board, by Pendergast, Ward and Brun de
Pontet, The Family Business Consulting Group
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45. The Prospectus: A Tool for Attracting and Selecting
the Right Independent Directors
Desired traits of directors are often captured in a prospectus, a document that includes a
“job description” of a director as well as background information on the company and
desired traits and experience. A prospectus should include:
 Overview
 History and Company Profile
 Description of Current Board Structure
 Director Expectations & Responsibilities
 Compensation & Terms
 Desired Director Profile
 Overview of Selection Process
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46. The Effective Board Facilitation Checklist
• How well do I:
 Observe and participate in group processes simultaneously, contributing on
content level while influencing process?
 Manage the discussion – initiating, focusing, closing?
 Pace the group’s work?
 Encourage, balance and maintain participation and cooperation?
 Reinforce effective interpersonal and professional behaviors?
 Push to consensus?
 Manage conflicts?
 Ensure clarity of decisions and follow through?
Source: Adapted from The Chair Forum, The Family Business Consulting Group
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47. Outline of Board Background Book
• Helping Directors Prepare: The Board Background Book
• Directors depend on the chair to get the information they need to do their job well.
One effective way to accomplish that is with a board background book. The board
background book is a comprehensive, professionally presented summary of important
information about the business.
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48. Outline of Board Background Book
• Contents:
 Mission Statement, History and Strategy
 Who’s Who (Org Chart, Sharehoders, Officers, Key Advisors, etc.)
 Biographies (Key executives and Directors)
 Competitors, Vendors & Customers
 Financial Information
 Audit & Estate Valuation
 Articles, Bylaws, Indemnification
 Other Information (Union status, Insurance coverage, Asset appraisals, Real estate,
etc.)
 Board Schedule and Agenda
Adapted from: Building a Successful Family Business Board: A Guide for Leaders, Directors &
Families by J. Pendergast, J. Ward, S. Brun de Pontet.
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49. Getting the Most Out of Your Board
Finding the right board members is important, but it’s only half the battle. To get the most
out of your board, you have to give board members a meaningful role and set up
meetings so that they can contribute. To take advantage of all the board has to offer:
 Clearly outline your expectations of board members
 Educate them on your business.
 Empower the board.
 Set a meaningful board agenda.
 Provide exposure to key management members.
 Establish a communication channel between owners and outside board members.
 Evaluate board performance.
Adapted from: “Getting the Most Out of Your Board” by Jennifer M. Pendergast, The Family Business
Advisor, published by The Family Business Consulting Group.
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50. Planning Your Board’s Calendar: Sample Quarterly
Themes
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51. About the Faculty
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52. About The Faculty
Mark Trembacki – marktrembacki@gmail.com
Mark Trembacki is Executive Vice President and Chief Strategy Officer of Busey Bank where he leads
strategic planning and execution, acquisition integration and the overall evolution of this rapidly growing
financial services company. Prior to joining Busey, Mark founded Risk Management Levers, Inc., a consulting
firm focused on strategy, risk management, acquisition integration, and change management leveraging his
deep experience from leadership roles at BMO Financial Group, including U.S. subsidiary BMO Harris Bank.
Mark has an MBA in Finance from The University of Chicago Booth School of Business, a BS in Accounting
from The University of Illinois at Urbana-Champaign, and is a CPA. He is a qualified SEC Financial Expert, a
National Association of Corporate Directors (NACD) Governance Fellow, and earned NACD’s CERT
Certificate in Cybersecurity Oversight from Carnegie Mellon University’s Software Engineering Institute. Mark
also completed a Cyber Security Management Graduate Certificate from the University of Virginia.
Mark serves as the Board Chair at the DuPage Children’s Museum and Treasurer of the Chicago Historical
Society (Chicago History Museum) and was part of CEO Search Committees at both organizations in 2019
and 2020. He has also been an adjunct professor at the University of Illinois Urbana-Champaign teaching
Enterprise Risk Management in the Masters of Finance program.
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53. About The Faculty
David Spitulnik – dspitulnik@spitulnikadvisors.com
David Spitulnik is a successful executive with over 40 years of experience in both large technology companies and
in consulting to and leadership of mid-market, closely held and family owned businesses across a variety of
industries. In addition to serving as a member and former chair of the Private Directors Association’s Private and
Family Business Center Outreach Committee and a member of the PDA Chicago Programming Committee, David
frequently writes and speaks on a number of topics related to leading, building, maintaining and strengthening
businesses and their governance structures. Drawing from a broad range of experience in the United States and
internationally, David is called upon to coach and mentor business leaders, to work with companies to develop
and implement their long-range plans and to advise businesses on board creation, structure and effectiveness so
that the individual, the board and the company can maintain powerful forward momentum.
David also is active in the community, currently serving on the Executive Committee of the Board of the Youth Job
Center whose mission is “Success for Young People in Their Careers and in Life.”
David published a book on leadership, Becoming An Insightful Leader: Charting Your Course To Purposeful
Success. The book focuses on the journey from managing to leading to advising and reflects David’s belief in
communicating and questioning how individuals and teams will define and then accomplish their goals and
objectives.
David graduated from Haverford College with a B.A. in Economics and received his MBA
from the Kellogg School at Northwestern University.
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54. About The Faculty
Pankaj Amin – pamin@scven.com
In his extensive work as a CEO, private equity advisor and corporate Board member, Pankaj
brings more than 25 years of leadership and operational experience in the healthcare,
telecommunications, financial services and business service sectors. Pankaj is a thoughtful,
insightful and intellectually curious advisor who has a solid grasp on process as much as
product. Pankaj currently serves as a board member of MUBIC, a makeup joint venture
launched by Intercos, a 6000-person global makeup manufacturer headquartered in Italy and
portfolio company of private equity firm L Catterton. Pankaj brings financial oversight, growth
strategy, and consumer products experience to the company’s board. Pankaj also currently
serves as a board member of Enzo Bevande, a beverage company that is bringing popular
European products to the mass market in the United States. Pankaj represents the interests
of two European investors.
To read more, go to: https://www.financialpoise.com/webinar-faculty/pankaj-amin/
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55. About The Faculty
Will Clarke – willaclarkeemail@gmail.com
Will Clarke is the Founder and President of Clarke Growth and Sustainment Strategies, an advisory
firm specializing in guiding startup and early stage companies’ business expansion. Will serves as
Independent Director for Ascent Solar Technologies, a publicly traded company where he chairs the
compensation committee and is a member of the Audit and Nomination/Governance committees.
Prior to starting his own firm, he led the Global Supply Chain business unit for Atlas Airlines
and directed store refurbishment initiatives for Best Buy. Before launching his corporate career in
2015, Will served 25 years as a Naval Officer where he completed 10 deployments on a ship,
submarine and two aircraft Carriers in support of war and peacetime operations globally. He attained
the rank of Captain (O6).
Born in Trinidad and educated in NYC Public Schools, Will earned a BSc in Mathematics from the U.S.
Naval Academy, and a MSc in Finance and Contracts Management from the Naval Postgraduate
School. More recently, he completed the Corporate Governance Program at Columbia Business
School.
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56. About The Faculty
Jeremy Waitzman – jwaitzman@sfgh.com
Jeremy Waitzman advises his clients on significant transactions and operational issues in
their businesses. Described by clients as “an essential business advisor” and “a partner in the
success of my business,” Jeremy has substantial experience representing businesses of all
types and sizes from inception, guiding them through significant growth, and often through
ownership’s exit. His clients include privately-held middle market and emerging growth
companies, family offices/funds, investors, C-level executives, boards of directors, family-
owned businesses and entrepreneurs. Jeremy counsels clients in the areas of corporate law,
mergers & acquisitions, private placements, general contract law and often acts as outside
general counsel for his clients. Jeremy represents individuals, closely held businesses, start-
up companies and serves as outside counsel to several large corporations. His work with
companies often includes strategies for creation of enterprise value.
To read more, go to: https://www.financialpoise.com/webinar-faculty/jeremy-waitzman/
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57. Questions or Comments?
If you have any questions about this webinar that you did not get to ask during the live
premiere, or if you are watching this webinar On Demand, please do not hesitate to email us
at info@financialpoise.com with any questions or comments you may have. Please include
the name of the webinar in your email and we will do our best to provide a timely response.
IMPORTANT NOTE: The material in this presentation is for general educational purposes
only. It has been prepared primarily for attorneys and accountants for use in the pursuit of
their continuing legal education and continuing professional education.
57

58. About Financial Poise
58
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