PowerPoint Presentation

XXX Plc

Board Evaluation Exercise

Project ProposalCMK ConsultingBackground and Understanding of Your NeedsXXX Plc1XXX Plc (APR) is a leading share registration service provider in Nigeria with over 30 years of share registration experience in the Nigerian Capital Market. APR participates in various offers, including IPO, Right Issue, Debenture, State and Federal Government Bonds, etc.XXX Plc is a fully owned subsidiary of United Bank for Africa Plc. APR is a standard-delivery service provider for corporate organizations in the primary and secondary sectors of the capital market. APR requires the services of a consultant to assist in a Board Evaluation/ Assessment exerciseBoard EvaluationBoard evaluation is a best practice around the World21992: Cadbury Report (UK) first recommended conducting an annual assessment of the boards performance as a best practice in governance. Conducting an annual board assessment is one of the guidelines in the modern UK Combined CodeOECD Corporate Governance Guidelines noted that regular evaluation of the boards performance was one of the boards key responsibilities XXX WebsiteBoard Evaluation Practices, Experiences from Latin American Companies Circle (OECD, IFC, Global Governance Forum)#2Background and Understanding of Your Needs2003: New York Stock Exchange (NYSE) requires that all listed companies conduct an annual assessment of the performance of the board Listed below are the recommended practices regarding board evaluation from a number of governance codes1Institution/SourceFrequencyRecommendationsCentral Bank of Nigeria Code of Corporate Governance for Banks and other Financial Institutions in NigeriaNot explicitly statedThere should be a formal assessment of the effectiveness of the Board as a whole and the contribution by each individual director (including the Chairman) to the effectiveness of the BoardThe U.K Corporate Governance CodeOn a yearly basisThe Board should undertake a formal and rigorous annual evaluation of its own performance and that of its committees and individual directors.Evaluation of the Board of FTSE 350 companies should be externally facilitated at least every three years (on a comply-or-explain basis).IBGC Code of Best Practices (Brazilian Institute of Corporate Governance)On a yearly basisA formal evaluation process of the performance of the Board, of individual directors and of the CEO.The process shall be conducted by the Chair.The participation of an outside expert may contribute to the effectiveness of the process.Evaluation system shall be adapted to each organization.Disclosure of the process and of the evaluation results to the shareholders.Board Evaluation Practices, Experiences from Latin American Companies Circle (OECD, IFC, Global Governance Forum)#3Potential Benefits of Board Evaluation1 BenefitsTo OrganisationTo BoardTo Individual DirectorsLeadershipSets the performance tone and culture of the organisation.Role model for CEO and senior management teamAn effective chairperson utilising a board evaluation demonstrates leadership to the rest of the boardDemonstrates long term focus of the boardLeadership behaviours agreed and encouragedDemonstrates commitment to improvement at individual levelRole ClarityEnables clear distinction between the roles of management, CEO and the boardEnables appropriate delegation principlesClarifies director and committee rolesSets a board norm for rolesClarifies duties of individual directorsClarifies expectationsTeam WorkBuilds Board/ CEO/ Management relationshipsBuilds trust between board membersEncourages active participationDevelops commitment and sense of ownershipEncourages individual director involvementDevelops commitment and sense of ownershipClarifies expectations1. Seven Steps to Effective Board & Director Evaluations: Kiel & Beck#4Work ApproachThe high-level work approach to be adopted for this engagement is as illustrated below. It draws heavily from the work of two leading Australian experts: Geoffrey Kiel and James Beck15.0 Conduct Evaluation& Analyze Results

4.0 Select Techniquesfor Evaluation

3.0 Determine What Will be Evaluated2.0 . Determine Who Willof Evaluation1.0 Determine Objectives of Evaluation6.0 Project Management & Quality ControlEstablish what the board hopes to achieve with the assessment exerciseEstablish who will be evaluated:The board as a wholeBoard committeesIndividual directorsAll of the aboveEstablish the specific themes for evaluationSelect techniques for evaluationQualitative techniquesQuantitative techniquesCombination of bothConduct evaluation, analyse evaluation results and discuss with relevant stakeholders1. Seven Steps to Effective Board & Director Evaluations: Kiel & Beck#51.0: Determine Objectives of EvaluationNarrativeOutputEstablish what The Board hopes to accomplish with the evaluation exercise:Determine overriding motivation for the evaluation exerciseDistil objectives clearly defined objectives enable The Board to set specific goals for the evaluation and make decisions about the scope of the review: Issues such as complexity of the performance problem, size of the board, stage of the organizational life-cycle and significant developments in African Prudential Registrars competitive environment will determine issues to be raised.Scope of the review (i.e. the number of people involved, resource allocation etc.) will be determined by the severity of problems facing The Board and the availability of sufficient resources to carry out an evaluation.

A shared understanding of objectives of the evaluation.#6Salient questions to ask at this stage include1..Is Our Board Composition Right for the Challenge?..Are we Addressing the Risks that Could Send Our Company Over The Cliff?..Are We Prepared to Do Our Job Well When a Crisis Erupts?)..Are we well Prepared to Name Our Next CEO?..Does our Board Really Own the Company's Strategy?..Is Our Governance Committee Best Of Breed? ..How Can Our Board Self-Evaluation Improve Our Functioning And Our Output?..Does the board have the right committees, and are they functioning well?..Does the board have the right kind of expertise? Is anything missing?..1. Owning Up: The 14 Questions Every Board Member Should Ask by Ram Charan#72.0: Determine Who Will be EvaluatedNarrativeOutputA wide range of individuals/ groups could be considered for evaluation. At this stage, The Board (with assistance from the consultant) will determine what groups are most important or relevant. Some relevant groups include: The Board as a whole (including committees)Individual directors (including the roles of chairpersons) and;Key governance personnel.Effective evaluation will require selection of the most appropriate individuals or groups to review. Options include:The Board could be evaluated as a whole.Progress to the evaluation of Board committees, individual directors and the chairperson

Identified groups and individuals for evaluation#8A high level competency assessment of The Board can be included as part of this process..Required CompetenciesWhat is needed to do the job properly?Current CompetenciesHow strong is The Board at doing these things?Competency Gap Bridging InterventionsAddressing weaknesses and building on strengthsSome of the competencies for assessment could include:Functional CompetenciesOrganisational CompetenciesAttributesStrategic PerspectiveBusiness and Financial AcumenAlliance ManagementConflict Resolution

LeadershipOrganisational AwarenessCustomer OrientationIndustry KnowledgeTeamwork and CollaborationInnovation & CreativityIntegrity#93.0: Determine What will be Evaluated NarrativeOutputHaving established the objectives of the evaluation and the people/groups to be evaluated to achieve these objectives, these objectives will then be elaborated into a number of specific themes to ensure that the:The evaluation clarifies any potential problems.Identifies the root cause(s) of these problems, andTests the practicality of specific governance solutions, wherever possibleSpecific themes for evaluation#104.0: Select Techniques for EvaluationNarrativeOutputBased on the specific needs of African Prudential, a range of qualitative and quantitative techniques will be selectedQualitative techniques: The three main methods used for collecting qualitative data in governance evaluations are interviews, board observation and document analysis:Interviews: An excellent method of assessing directors perceptions, meaning and constructions of reality by asking for information in a way that allows them to express themselves in their own terms1Observation of board meetings.Relevant documents could also be a rich source of information in the governance evaluation process. It will help confirm/elucidate on data collected using other methods.Surveys are by far the most common form of quantitative technique & will likely be used.Specific techniques for evaluation#11Business ArrangementsOur professional fees for the arrangement described in this proposal are based on the level of staff and time required to complete the assignment.

We estimate this assignment will take 1 month.

Based on our understanding of the required scope of the project, We estimate that our services will cost a discounted fee of N 2.16 million, representing 10% discount on our fees in line with our commitment to partner with you on this strategic initiative.

Our fees exclude VAT and out-of-pocket expenses which are incidental to the assignment. Out-of-pocket expenses will be billed separately at actual costs incurred, if not provided directly by you. Furthermore, we will bill 60% of the contract sum as mobilisation billing prior to commencement of the engagement.#12About the Consultant C.M.K ChukudebeluSpecifically, he has acquired experience in Enterprise Resource Planning application implementation, Business Process Analysis and Re-engineering, Human Resources, Telecommunications Engineering, Oil & Gas Industry and Project Management. Has worked KPMG & Accenture. He worked on a wide range of projects, involving subject areas as diverse as Organisational Restructuring, Cost-Benefit Analysis, Business Process Analysis and Human Resources. Examples of projects include:Project manager for an integration advisory assessment of the Dangote Group.Project manager for HR organizational restructuring project at Federal Inland Revenue ServiceProject manager for Design of an Invoicing and Payment Model for British American Tobacco/ Great Brands Nigeria LimitedHe was the Group Projects Coordinator at Nigerias largest indigenous software company, responsible for the delivery of projects, CRM and support activities and a budget of millions of dollars.Has also anchored projects like a ground breaking study of agricultural value chain (the project was jointly sponsored by a leading commercial bank & a subsidiary of the World Bank Group)Has a Bachelors Degree in Electronic Engineering and a Masters Degree in Telecommunications and Information Systems. #13