The Effective Director (Series: Board of Directors Boot Camp)

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Practical and entertaining education for
attorneys, accountants, business owners
and executives, and investors.
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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 the information
it publishes is accurate, Financial Poise™ makes no guaranty in this regard.
About this PowerPoint: if you are looking at this PowerPoint without the benefit of
listening to the conversation that surrounded it then you are doing yourself a disservice.
This PowerPoint was prepared in contemplation of being viewed in conjunction with
listening to a one hour webinar on the topic
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MEET THE FACULTY
Moderator:
Mark Trembacki – Risk Management Levers, Inc.
Panelists:
Kristi Daeda – The Family Business Consulting Group
Jay Reilly – Saul Ewing Arnstein & Lehr LLP
David Spitulnik – Spitulnik Advisors
Mark Melickian – Sugar Felsenthal Grais & Helsinger LLP
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ABOUT THIS WEBINAR:
The Effective Director
While we think of a board as a functioning entity, much of the success of the board
relies on the individual behavior of its directors. During this program, we talk about
some of the productive and problematic behavior that can show up in the
boardroom, and the effect that it can have on board effectiveness. We look at what’s
expected of directors from ownership and management, and share examples of the
ways that a highly effective director can help to meet or exceed those expectations
and make a meaningful contribution to the company’s success.
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ABOUT THIS SERIES: Private Company
Board of Directors Boot Camp 2019
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.
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EPISODES IN THIS SERIES
9/12/19 Episode #1:
Roles & Responsibilities: a Primer
10/10/19 Episode #2:
11/7/19 Episode #3:
The Effective Board
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Dates shown are premiere dates.
All webinars will be available
On Demand approximately 4 weeks
after they premiere.

Episode #2:
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WHAT IS THE ROLE OF A DIRECTOR?
• Protect Shareholder’s Interests
• Fiduciary – financial, legal, and specific committees
• Help steer towards the mission and vision – ask thought-provoking questions
• Oversight:
 Values, ethics & culture
 Leadership performance and training
 Leadership team and succession planning process
 Challenge thoughts and probe into decision making process
 Ensure organization is sufficient for achieving strategies
 Acquisition and large organizational restructurings
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BEING AN EFFECTIVE DIRECTOR
• Understand your role
• Understand the difference between working in a business and being on a board
(your opinion matters, but they don’t have to accept it)
• Look down the road and anticipate for them
• Know how to ask thought-provoking questions
• Be willing to say things that might not be popular if you feel it will help them see
something differently
• Engage!
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UPHOLDS FIDUCIARY PRINCIPLES
• Responsibility to entity
• Commitment to corporate priorities and interests
• Board approval (not individual authority) for key policy decisions
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ENSURES LEADERSHIP ALIGNMENT
• Identification of critical areas for improvement
• Prioritization of opportunities
• Definition of key strategies, financial/performance metrics, and
service levels
• Successful execution of strategies
• Development of talent
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ESTABLISHES ACCOUNTABILITY
• Mission/Vision/Values
• Short term objectives and results
• Long term planning for sustainability
• Forward-looking strategic thinking
• Succession planning
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MANAGES STRATEGIC RISK FACTORS
• Financial controls
• Technology exposure
• Potential products/services/other liability exposure
• Potential human resources liability exposure
• Production shutdown/disaster recovery/business continuity
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SOME OF THE TOUGHEST SITUATIONS
• Anticipating and preparing for industry disruption
• Preparing for economic, regulatory and legal issues that totally change the playing field
• Addressing CEO performance and/or replacement
• Making sure that acquisitions or large expansions are done well
• Helping to craft the right mission without being overly influenced by our own past
experience
• Helping executives to make sure they are properly staffed to address the larger issues
facing the business
• Dealing with differing stakeholder opinions
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NOSE IN, FINGERS OUT
Many executives struggle to transition to board roles where they're charged with
insight and oversight, but not operations. “Nose in, fingers out” is a reminder that
the board’s job is to question, challenge and support, and allow management to run
the business.
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ESTABLISHING EFFECTIVE BOUNDARIES
• Boards can maintain “Nose in, fingers out” by clarifying their processes and
boundaries.
• Have annual calendars for key topics.
• Develop board and committee charters that specify scope and duties.
• Define decision protocols for how decisions are made, including which decisions
are within management’s domain and which require board approval.
• Develop a strong governance culture.
Adapted from: https://hbr.org/2006/11/how-well-run-boards-make-decisions
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CONFLICTS OF INTEREST
• Conflicts of interest may arise when directors stand to directly or indirectly
benefit personally from a board level decision or other relationship with the
company. Conflicts of interest can be managed by:
 Requiring disclosure of potential conflicts.
 Recusing a director from decisions that present a conflict.
 Creating a conflict of interest policy or addressing in the bylaws.
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BOARD COMMITTEESS
• Board committees are designated by the board to more deeply investigate and review certain
topics and make recommendations to the board or in some cases make decisions on its
behalf. The Committee's role is determined by its charter. Common areas of committee
oversight include:
 Governance/Nominating
 Finance
 Audit
 Compensation
 Strategic planning
• Directors often add significant value through committee contribution.
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WAYS BOARDS CAN SUPPORT
BUSINESS PERFORMANCE
• Clarifying expectations for management
• Acting as mentors or sounding board for executive team
• Providing resources to address business issues (talent, consulting resources,
etc.)
• Challenging assumptions
• Ensuring a strategic planning process is in place
• Requiring rigor in financial and management reporting
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DEALING WITH DISRUPTION
• The pace of technological change and dynamic markets today require directors to be
more engaged with the business landscape to stay current. Boards may also need to
adapt their processes to move more quickly in response to a changing environment.
Boards should consider:
 What external factors are likely to have the greatest effect on this business?
 What should we be monitoring?
 How can we stay informed on critical trends?
 How might our board process need to adapt to ensure we attend to these changes?
 What kind of information will we need to make informed decisions?
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CONFLICT AND THE BOARD
• The boardroom is the place for spirited and respectful debate.
• The boardroom is not three place for relationship conflict, as hominem attacks,
etc.
• Conflict should be about ideas, not about personalities.
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SKILLS/EXPERIENCES A DIRECTOR
CAN BRING TO THE TABLE
• Executive: leadership, strategy, relational
• Functional: general management, sales, operations
• Growth: organic, M&A, new markets
• Industry
• Customer perspective
• Governance
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TRAITS OF EFFECTIVE DIRECTORS
• Strong communication
• Curiosity
• Humility
• Emotional intelligence
• Discipline
• Courage
• Enthusiasm
• Focus
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ENGAGING IN THE BOARD
• Take advantage of onboarding resources
• Leverage relationships with management to learn more about operations
• Prepare questions and ideas for major discussions
• Make space for personal connection to build relationships and trust
• Drive committee activity
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PROFESSIONAL DEVELOPMENT
• Directors should remain ahead of trends in business, technology and markets as
well as growing in their governance skills. Ongoing education may include:
 Participation in governance education (NACD, Private Directors Association)
 Follow major business press
 Attend industry trade shows and events
 Network with professionals from other industries
 Executive education in leadership, communication, finance, and other
leadership and business skills
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THE PROBLEM DIRECTOR
• Directors undermine effective governance when they:
 Are unable to take in other perspectives
 Talk more than their share
 Focus on operational issues
 Don't keep commitments
 Berate management
 Aren't prepared
 Represent a particular point of view rather than the entire enterprise
 Resist inevitable change
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EVALUATION AS A TOOL FOR
PERSONAL DEVELOPMENT
• Board structure
• Interpersonal relationships
• Achievement of goals
• Use of time
• Individual participation
• Relationship with management
• Board knowledge
• Board composition
• Attendance and engagement
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ABOUT THE FACULTY
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Mark Trembacki – marktrembacki@gmail.com
Mark Trembacki is the founder and Managing Principal of Risk Management Levers, Inc., a
consulting firm focused on strategy, risk management, acquisition integration, and change
management. He is an adjunct professor at the University of Illinois Urbana-Champaign
teaching Enterprise Risk Management in the Masters of Finance program. Mark has a 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 recently
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 in December 2017. Mark is the Board Chair at the
DuPage Children’s Museum and a trustee of the Chicago Historical Society (Chicago History
Museum).
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Kristi Daeda – daeda@thefbcg.com
Kristi Daeda is Vice President at The Family Business Consulting Group. Kristi leads a variety of practice areas for
The Family Business Consulting Group including the firm’s governance and board search practice, family business
education, support for publications such as The Family Business Advisor and the firm’s collection of family
business books, strategic partnerships, and branding and communications efforts. She also moderates the firm’s
popular series of webinar discussions on family business topics. Prior to joining FBCG, Kristi led sales, purchasing,
marketing and IT for a family owned e-commerce retail company. She also spent five years as founder and
president of a consultancy focused on helping professionals effectively market themselves, either as
consultants/service providers or in job search for executive roles. Kristi is a member of the Family Firm Institute,
where she has contributed to the online publication The Practitioner and volunteered in planning its international
conference. She is also on the Chicago Chapter board of the Private Directors Association and serves as co-chair for
the education committee. Her writings are published in two books, Launchpad, a guide to building a successful
career, and Lenses of Leadership: A Call to Action. She is a frequent speaker and writer on themes around family
business, governance and personal development. In addition to her professional activities, Kristi is involved with
her local school and an organization that provides pro-bono strategic consulting to nonprofit organizations. She
lives with her husband, two children and dog in the suburbs of Chicago.
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Jay Reilly – Jay.Reilly@saul.com
With his private practice and in-house experience, Jay Reilly, Counsel at Saul Ewing Arnstein &
Lehr LLP, brings to clients a dual perspective of legal issues facing businesses. He has a deep
knowledge of the bio-tech, life sciences and pharmaceutical industries and has counseled smaller
companies on a variety of corporate matters.
Prior to joining Saul Ewing Arnstein & Lehr, Jay was General Counsel and Chief Compliance Officer
for Emergent BioSolutions, a publicly traded specialty pharmaceutical company in Washington,
D.C. In this position, Jay managed the company’s in-house legal staff and monitored government
contract and compliance matters. He has extensive knowledge of securities law compliance and has
directed numerous complex corporate transactions, including mergers and acquisitions, real estate
deals, joint ventures, strategic alliances and licensing agreements. In addition, Jay has first-hand
experience counseling members of boards of directors on governance, fiduciary duties and risk
mitigation. Previously, Jay was in-house with Novell, Inc. in Waltham, Massachusetts. He also was a
senior corporate associate for five years at Wilmer, Cutler, Pickering, Hale and Dorr LLP in Boston,
Massachusetts.
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David Spitulnik – dspitulnik@spitulnikadvisors.com
David Spitulnik is a successful executive with over 35 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 chair of the Private Directors
Association’s Private and Family Business Center Outreach Committee, David frequently writes 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 often called upon to advise family and non-family members on board
creation, structure and effectiveness so that the board and company can maintain powerful forward
momentum.
David recently 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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Mark Melickian – mmelickian@sfgh.com
Mark Melickian leads Sugar Felsenthal Grais & Helsinger LLP’s restructuring practice. Over the past 20 plus
years, he has worked primarily on business transactional and litigation matters with a focus on chapter 11
commercial bankruptcy cases and non-bankruptcy distressed situations. His practice includes both debtor-
and creditor-side representations and include financial institutions, indenture trustees, trade creditors, asset
purchasers, investors, commercial real estate interests, corporate officers, and other parties in interest in
chapter 11 cases throughout the country. In addition, a significant focus of his practice is the representation of
committees and other estate fiduciaries in bankruptcy cases – over the past two decades, he has counseled
dozens of official and unofficial bankruptcy committees, liquidating trustees, litigation trustees, and plan
administrators charged with pursuing and liquidating assets for the benefit of estate creditors.
Mark has written extensively on bankruptcy and insolvency law and other topics, having contributed materials
on these subjects to American Bankruptcy Institute Journal, Bankruptcy Strategist, Wiley Bankruptcy Law
Update, Ginsberg & Martin on Bankruptcy, Norton Bankruptcy Law Adviser, the Cornell University Legal
Ethics Library, and dozens of professional conferences and seminars. For several years, he wrote a monthly
legal affairs column for Student Lawyer, an America Bar Association publication, for which he received the
Peter Lisagor Award for Exemplary Journalism from the Chicago chapter of the Society of Professional
Journalists. He is a graduate of Colorado State University and Northwestern University School of Law.
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QUESTIONS OR COMMENTS?
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not hesitate to email us at info@financialpoise.com with any questions or
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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.
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ABOUT FINANCIAL POISE
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business owners and executives, and investors. Its
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