Board

development

Question # 1
How large is the board?

Companies with small boards perform better

http://online.wsj.com/articles/smaller-boards-get-bigger-returns-1409078628

Research on group dynamics suggests that

groups of 6 or 7 are the most effective
at decision making.
http://hbr.org/2010/12/the-big-idea-the-case-for-professional-boards/ar/1

Question # 2
How are board meetings done?
How are decisions made?

At www.crisp.se, board meetings are open.

Anyone can attend meeting if they wish to.

http://dna.crisp.se/docs/board.html

To begin each meeting, the board of http://iuhealth.org/

has a connect to purpose moment, for example a story
from a patient or physician.

http://www.strategy-business.com/article/The-Mindful-Board

When confronted with a profound decision, one that will

have wide impact on the mission of http://iuhealth.org/
for generations to come, the boards values and ethics
committee convenes a group of citizens and members of
the system for input before bringing a recommendation
to the full board.
http://www.strategy-business.com/article/The-Mindful-Board

Further inspiration
https://www.teacherspayteachers.com/Product/Annual-general-meeting-innovation-1390067
https://www.teacherspayteachers.com/Product/How-can-we-make-better-decisions-more-rapidly-2058027
https://www.teacherspayteachers.com/Product/Improving-meetings-1569739

Question # 3
How is communication done
between meetings?

Under a new model, professional directors

working in audit committees as well as in
compensation committees would also spend a
significant amount of time gathering information
throughout the year engaging with company
staff and others between board meetings.
http://hbr.org/2010/12/the-big-idea-the-case-for-professional-boards/ar/5

Survey of 171 Canadian directors shows that

21% say social media is significant for their
boards today, but 74% say it will be significant
within 3-5 years.

10% of the directors say they are active users

of social media.
http://m.theglobeandmail.com/report-on-business/industry-news/marketing/social-media-still-a-mystery-for-canadian-company-directors/article15369773/?service=mobile

Digital megatrends such as big data analytics, cloud

computing, mobile commerce, smartphone penetration and
social media are now embedded in the core of business.
More importantly, these trends are critical to competitive
advantage. As with any fundamental change of this kind,
boards must play a central role in ensuring that companies
are accurately evaluating risks and opportunities.
http://www.kornferryinstitute.com/briefings-magazine/spring-2013/corporate-governance-20-boardroom-collides-digital-age

Bank of Montreal encourages shareholders to

directly contact its independent directors,
in particular about such topics as succession
planning, corporate governance practices,
and disclosure.
https://hbr.org/2015/01/where-boards-fall-short

One of the benefits the board and I had was an active,

capable lead director with whom I could work closely.
He did a superb job in guiding the issues of the
independent directors and in keeping me fully informed
of any concerns and issues the board might have.
When it came time to select my successor, he
developed a sound process that we both agreed
upon and led the board through it.
http://www.billgeorge.org/page/board-governance-depends-on-where-you-sit
http://www.mckinsey.com/insights/leading_in_the_21st_century/board_governance_depends_on_where_you_sit

Question # 4
How is CEO succession
planning done?

The board should find ways to make CEO succession

planning a routine, recurring, and candid topic of
discussion.
The best approach is to include a CEO-free session
during each board meeting, presided over by
the lead outside director.
http://www.strategy-business.com/article/00327

Taking into account both industry dynamics and company

strategy, boards should develop a CEO profile that

identifies the key skills, expertise, and experience

needed to execute the company strategy.
While the board may have chosen an effective CEO based on
the time of the appointment, it does not necessarily mean
that the same CEO should continue for the next phase in the
organizations growth.
http://sloanreview.mit.edu/article/how-boards-botch-ceo-succession/

Assessment tools and methodologies to identify the future

CEO among internal candidates can include 360-degree

feedback instruments, experiential simulations,

and external assessments.
Boards should use the results of these assessments to
understand the quality of internal leadership talent and as
a base from which to develop a list of potential external
candidates.
http://sloanreview.mit.edu/article/how-boards-botch-ceo-succession/

Boards should create individual development plans

for non-CEO leaders that focus on acquiring the skills,
expertise, and experience needed in the future. The training
plans should feature mentoring by board members, as well as
rotations in different functions, business lines, and geographic
areas.

When directors actively participate in formulating development

plans and in mentoring, they increase their insights into the
internal leadership potential to an extent far beyond that offered
by formal presentations
http://sloanreview.mit.edu/article/how-boards-botch-ceo-succession/

Question # 5
What is the relation between
the CEO and the board?

Boards should be independent

of management.

http://knowledge.wharton.upenn.edu/article/is-one-global-model-of-corporate-governance-likely-or-even-desirable/

http://www.mckinseyquarterly.com/Governance/Leadership/Chairman_and_CEOone_job_or_two_1413

Percent of listed companies with

split Chairman-CEO roles

North American CEOs strongly prefer the dual mandate

of being board chair and CEO, as it puts them squarely in
charge and avoids the likelihood of conflicts or power
struggles within the boardroom.
The downside of this model is that in the past it often
encouraged complacency by boards and discouraged them
from getting deeply involved in issues until it was too late.
http://www.billgeorge.org/page/board-governance-depends-on-where-you-sit

http://www.pwc.com/us/en/corporate-governance/annual-corporate-directorssurvey/assets/pdf/pwc-annual-corporate-directors-survey-full-report.pdf

If you currently have a

combined chair/CEO, has
your board discussed
splitting the role during
your next CEO succession?

A board may contribute directly to company

performance by co-creating the strategy of the
company.
By pursuing a co-creative role, boards can help
open the minds of executives and steer the
strategy debate beyond any cultural blind spots.
http://sloanreview.mit.edu/article/how-strategic-is-your-board/

Question # 6
To what extent and how are
external people involved?

Level of influence that various groups have over

boards decisions on executive compensation

http://www.pwc.com/us/en/corporate-governance/annual-corporate-directors-survey/assets/pdf/pwc-annual-corporate-directors-survey-full-report.pdf

A growing tendency to engage outside experts has

improved the quality of board decision making in
recent years.

Good boards now bring in governance experts to

review their practices and provide clear feedback.
http://hbr.org/2014/03/the-boardrooms-quiet-revolution/ar/3

Invite outsiders to critique the companys

strategy in the boards strategy sessions.

http://hbr.org/2013/11/you-cant-be-a-wimp-make-the-tough-calls/ar/1

Shareholder engagement activities

will likely continue to increase among
organizations and boards.

http://www.corpgov.deloitte.com/binary/com.epicentric.contentmanagement.servlet.ContentDeliveryServlet/USEng/Documents/Deloitte%20Periodicals/H
ot%20Topics/Hot%20Topics%20-%20Shareholder%20engagement%20-%20A%20new%20era%20in%20corp%20gov%20-%20Sept%202013%20-%20Final.pdf

To test whether a board is doing its job well

or not, observe the growth and involvement
of activist investors.
If the board is doing its job well, there are no
activist opportunities.
http://www.mckinsey.com/insights/corporate_finance/Are_you_getting_all_you_can_from_your_board_of_directors

Survey shows that 48% of boards have a formal process of

determining the combination of skills and attributes required
for their board and, therefore, for new directors.

The future of director selection is becoming an

increasingly objective and skill-focused process.
https://hbr.org/2013/07/joining-a-board-who-you-know-m

Question # 7
How do board members
develop themselves?

http://www.slideshare.net/frankcalberg/board-member-development-64658208

Further inspiration
http://www.ft.com/intl/management/better-boards
http://www.gsb.stanford.edu/insights/seven-myths-boards-directors
https://hbr.org/2014/10/boards-arent-as-global-as-their-businesses
https://hbr.org/2014/08/so-you-want-to-join-a-board
http://www.mckinsey.com/Insights/Organization/Changing_the_nature_of_board_engagement
http://www.mckinsey.com/Insights/Strategy/Toward_a_value_creating_board
http://www.ssireview.org/blog/entry/boosting_nonprofit_board_performance_where_it_counts