This document provides guidance on effectively managing a board of directors. It discusses key roles and responsibilities of the board, chairman, and CEO. It outlines best practices for board governance including implementing board charters, conducting director onboarding, and establishing annual work plans. The document warns of common mistakes like over-reliance on the board for strategic leadership. It also provides tips for pre-meeting preparation, maximizing engagement and decision-making at meetings, and maintaining strong relationships with directors. The overall message is that properly governing the board allows it to serve as a valuable strategic resource to the organization.

1. Managing a Board of Directors
Dr. Michael R. Burcham
The Nashville Entrepreneur Center
michael@michaelburcham.com
03.10.15 | CNM

2. Part 1:
Conversation on Corporate Governance

3. 3
What is Corporate Governance?
Corporate Governance is a mechanism through which
Boards and Directors are able to direct, monitor and supervise the
conduct and operation of the corporation and its management in a
manner that ensures appropriate levels of authority, accountability,
stewardship, leadership, direction and control.

4. Audit
Commi*ee
Compensa0on
Commi*ee
Governance
Commi*ee
Board
Commi*ees
Strategy
Board
of
Directors
•
Achievement
of
strategic
objec0ves
and
value
crea0on
•
Fulfil
responsibili0es
and
du0es
in
law
and
prescribed
func0ons
Board
Opera0ons
Chairman
Board
Mee0ngs
Repor0ng
&
Disclosure
Internal
Controls
Execu0ve
Commi*ee
Internal
Audit
External
Audit
Management
Combined
Assurance
Model
Governance
System
and
Controls
Corporate
Policies
&
Procedures
Board
Governance
Instruments
Monitoring
and
Evalua0on
Key
Areas
of
Responsibility
CEO
&
Management
Shareholders
Informa0on
and
Communica0on
Corporate
Secretary
Board Governance Framework

5. 5
Chairman as Leader of the Board
Primary Role | Provide overall leadership to the board
Function
• Principal link between board and CEO/management team
• Responsible for board agenda and work plan
• Work with board committee chairs
• Involved in selection and induction of new directors
• Counsel individual directors on their performance
• Participate in discussions with key stakeholders

6. 6
CEO as Leader of the Company
Primary Role | Lead the management team, Reporting to the board
Function
• Work closely with board chairman
• Responsible for performance of management team
• Formulate corporate strategy, annual business plan and budget
• Responsible for corporate and financial objectives
• Formulate major corporate policies
• Ensure continuous improvement in services and products
• Manage relations with investors, major customers, regulators
• Responsible for company s long-term sustainability

7. 5 Key Roles for a Board
1. Financial Oversight
2. CEO Management
3. Setting Long-term Strategy
4. Succession Planning
5. BOD Governance
To Build an Effective & Successful Organization Through:

8. THE Most Important Responsibility of the BOD
• Attendance & Agenda
• Information Flow
• Focus on Mission & Strategic Issues
• Committee Work
• Accountability
• Decision Making
• BOD Evaluations
• Continued BOD Development
These
are
ALL
Peer-­‐to-­‐Peer
BOD
issues

9. Hats of Nonprofit Board Members
• Governance | Worn only when in a properly called meeting
• Volunteer | Worn when advising the CEO or ED, fundraising and
helping staff
• Implementer | Rarely worn, program implementation is usually the
responsibility of the staff

10. Part 2:
Common Mistakes of Organizational Leaders

11. Common Mistakes of NFP Leaders
Over-Reliance on the Board For !
Strategic Leadership

12. Common Mistakes of NFP Leaders
Leader with Inconsistent Board Interaction!
Not Checking in Often Enough

13. Common Mistakes of NFP Leaders
Having the Board Meeting!
At the Meeting | No Preparation

14. Common Mistakes of NFP Leaders
Meeting Becomes Updates!
There is Nothing to Engage

15. Common Mistakes of NFP Leaders
Not Enough Executive Session!
Teams Need Honest Conversation

16. Common Mistakes of NFP Leaders
Focus is Only on Fund Raising!
Lose Sense of Purpose
The Board is not an ATM!

17. Part 3:
How Can We Be More Effective?

18. All Board Fall Somewhere Between
Over
Controlling
Out of
Control
Micro Managing
Rubber Stamping

19. 19
Instruments to Enhance Effectiveness
Board Charter setting out procedural rules
• Clarifies leadership roles and core responsibilities
• Reserves matters specifically reserved to board
• Sets management delegations and reporting arrangements
Comprehensive induction for new directors
• Legal and regulatory obligations
• Financial structure of business, budgets and KPIs
• Understanding of strategic priorities and current status
• Familiarize with business operations, e.g. site visits
Annual board work plan
• Meetings and budget cycle, annual reporting
Code of ethics or statement of business principles
• Defines corporate values and conduct of staff and directors

20. When Properly Governed the Board Can Be
An Incredibly Valuable Strategic Resource
Expertise
Experience
Network
Perspective

21. Best Practices
Leadership
• Effectiveness | BOD best practices and board effectiveness
• Relationships | BOD and ED/CEO should have a strong relationship
Legal
• Audit | Fulfill the requirements of audit each year.
• Duty of Loyalty | Look out for best interest of the organization
• Compliance | All federal, state and local compliance issues
• Laws | Aware of follow current laws and policies
Financial
• Audit | Annual audit by an outside firm
• Resources | Link vision and plans to financial support

22. Best Practices
Money
• Charity | Donate time and money to the organization
• Fundraising | Raise funding and resources for the organization
Meetings
• Frequency | At least Quarterly meetings
• Documentation | Minutes, Decisions, Presentations
Policies
• Policies | Conflict of Interest & Whistle Blower Policy
• Independence | Primarily volunteer
• Results | Measure progress toward mission in quantifiable ways
• Culture | Transparency, Consistency and Accountability
• Strategy | Focus, Consistent with Mission, Vision, Values, the “Dream”

23. Traps to Avoid
Board Failure:
• Weak recruitment, orientation, on-boarding of new members
• Not really tied to mission
• Weak CEO or Executive Director
• Not having strong governance policies in place
• Not managing personal issues or special cases, which can
impact governance process
• Not knowing what is expected of them
• Not agreeing to what is expected of them

24. Part 4:
Managing A Board | Pre & Post Meeting

25. MANAGING A BOARD
THOUGHTS FOR THE CEO

26. 1. THE MEETING: NEVER have the board meeting "at" the board
meeting. ALWAYS call every director a few days before the
meeting and run every important issue by them to get their input.
Update them on company performance, especially the bad news,
and let them "beat you up" privately. The meeting can then focus in
a constructive fashion on problem-solving and building the
Company for the future.
Managing a Board of
Directors
10
Rules

27. 2. THE DISCUSSION: Maximum PowerPoint should be about 4
slides from any presenter, especially yourself. This should be the
limit of director interest in detail. Boards engagement should be
strategic – not tactical.
Managing a Board of
Directors
10
Rules

28. 3.
ACCESS: Provide complete access for the board to everyone and
everything in the Company. They will rarely use it, but it's a great
comfort to them to know you are not trying to hide anything.
Managing a Board of
Directors
10
Rules

29. 4. PRESENTATION: Have your key team members do almost all the
presentations. It gives them exposure and allows you to make sage
comments along with the rest of the board. A perfect board meeting is
when 10% of the talking is done by the CEO, 60% by the team, and
30% by the directors.
Managing a Board of
Directors
10
Rules

30. 5. NOTES: Carefully consider every director's input and take good notes
at the meeting. These people have lots of experience and many great
contacts. But you make the final decisions (and if you don't, they will
start to look for someone who will).
Managing a Board of
Directors
10
Rules

31. 6. ENGAGEMENT: Give the Directors projects in their areas of expertise.
It's free consulting and they usually do a good job. It provides a way
to contribute to the business that is meaningful and provides a way
for them to “buy in” to the overall strategies.
Managing a Board of
Directors
10
Rules

32. 7.
DECISIONS: Get in front of the board on tough decisions like top
management changes, including changes to your own role. If it's
going to happen, make it your idea.
Managing a Board of
Directors
10
Rules

33. 8. COMMUNICATION: For VC directors, try to picture how they are
describing your Company to their partners, and what questions their
partners are asking. Your job is to make each director a hero to their
partners (or corporate boss).
Managing a Board of
Directors
10
Rules

34. 9. PRIORITIES: Remember it's Company first, team second, you last.
You win when everybody wins, not when just you win. If you ever fail
to understand these priorities, you will compromise your decision
making and your position.
Managing a Board of
Directors
10
Rules

35. 10. RELATIONSHPS: Try to make a friend of every board member.
Send them interesting deal ideas you turn up, learn about their
interests, make the board a "look forward to" experience for
everyone.
Managing a Board of
Directors
10
Rules