In this lecture, students learn the difference between a board of advisors and a board of directors and what roles they play in running a business. David will provide real-life examples of governance best practices and explore the legal requirements of different structures and the consequences of board decisions. For more information check the event page: http://www.marsdd.com/events/details.html?uuid=55faba8c-905e-4db9-9470-29003e038c85
Citation preview
1. David Pasieka Cedarvue PartnersDecember 2010"
2. Governance Failures
3. Why - Why Why? Management Reporting Spin Part-Time role /
Full Time Need Forceful CEOs Board Skill and Experience Unwavering
Trust of Management 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
7. Boards over TimeInfluence Governance Board of Complexity
Directors Advisory Boards Stage Financing Time
8. Directors DutyFiduciary Duty- To act in the best interests
of the corporation. It is this notion that all stakeholders need to
be considered.Duty of Care To exercise the care, diligence and
skill that a reasonably prudent man would exercise under comparable
circumstances.
9. Stakeholder ViewShareholders / Public / NGOs / Competitors /
Global Markets Employees Legislators Scientists / Banks / Media /
Customers / Investors
10. Directors FunctionsHire / Fire CEOReviews & Approves
the Strategic Direction of the CorporationMonitor the Performance
of Management
11. Directors ToolsInformation: Right amount to absorb key
issues and make informed decisions.Process Independence &
Diligence. Ask lots of Questions.Business Judgment Background,
Insight, Experience
12. Bright Red LineVery Passive: Rubber Stamp Management sets
and drives agenda Packages are late or Walked in CEO strong willed
Infrequent meetings Board Never votes noModerateVery Active: Micro
Management Board meets monthly, lots of Committees Board is
stronger then the CEO Board Committee work extensive Board Large /
Executive Committee Active Brown Governance 2005
13. TSX Governance Guidelines National Instrument 58-101Board
of DirectorsOrientation and Continuing EducationEthical Business
ConductNomination of DirectorsCompensationOther Committees beyond
Audit, Comp & NominatingAssessments
14. Building Your Board(s)Define Strategic GapBusiness
ExperienceManagement ExperienceDirectors ExperiencePersonal
AttributesReady / Willing / Able
15. Board Chemistry
16. Whats the Motivation?Favour to CEOStatusInteresting &
EngagingOpportunity to NetworkGive Something
BackFunRemuneration
17. Whats the RiskJoint & Several LiabilityInsolvency
Liabilities: Payments to Employees Payments to Creditors Payments
to GovernmentPersonal Conduct
18. Defending the RiskFiduciary DutyDuty of CareDue
DiligenceBusiness Judgment RuleIndemnityDirector & Officer
Insurance
19. Key Advisory RolesThe CustomerThe GeekDadTight AssJerry
MaguireArt of the Start Guy Kawasaki
21. Evaluating ParticipationOn the MastheadSilent and
DeepPersonality ChallengedEthical Poison
22. Is It Time to Act?Do they come prepared for the
meetings?Can you get your Advisors when you need them?Is to much
time being spent on trivial issues?Are all members contributing to
critical discussions?Are you getting great return?
23. Assessment ApproachesAttendance at Meetings Cheap &
CheerfulFor the Good of the BoardOne on One Coaching SessionsSurvey
- Board / Peer Performance360 degree FeedbackHigh Tech
InteractiveThird Party Observers Expensive & Comprehensive
24. For the Good of the BoardRound the Table (Verbal) What
Worked / What Didnt Areas to Improve Emotional DecompressSurvey 1
to 5 (Written): Pre-materials Concise and Helpful? Everyone
prepared? Issues covered Trivial or Important? Discussion Focused
Operational or Strategic? Stayed on Track? Who were the Heroes? /
Who were the Foes?
25. In SummaryThe CorporationDirectors DutyBuilding
BoardsManaging BoardsEvaluating Boards
26. References Corporate Governance Carol Hansell 2003
Integrity in the Spotlight Maureen Sabia & James Goodfellow
2005 National Instrument 58-101- Disclosure of Corporate Governance
Practices CICA 20 Questions Series www.Wallstreetfollies.com Money
for Nothing: How the Failure of Corporate Boards Is Ruining
American Business and Costing Us Trillions. Gillespie 2008 Brown
Governance
