Governance

POLICIES AND PROCEDURES

DIRECTOR DUTIES

INTEGRITYSTAKEHOLDERS

PARTICIPANT

S

BEHAVIOURS

VISION AND VALUES

Principle 2: Defining and Evaluating the Role of the Board

The board needs to understand and evaluate the role it plays and the way it contributes to the organisation.

Principle 7: Understanding and Engaging with the Sporting Landscape

The board needs to be aware of the international and domestic sporting environment and position its organisation appropriately.

Introduction

Vijaya Panangipalli

8 years of experience in governance Advised boards ranging from FTSE 100s to AIMs to European listed

companies on corporate governance issues Well versed with Companies Law

Fellow of the Corporate Governance and Sustainability International Group (CGSIG)

Member of the Association of Women Chartered Secretaries (AWCS) Member of European Corporate Governance Institute (ECGI) Member of European Institute of Governance Awards Limited

Learning Outcomes

• Understanding the role of the board and the board of directors

• The relationship between the CEO and the chairman

• Director legal obligations

• Performance evaluation – practical considerations for sports boards

• Things a board must do – strategy vs operational

• Directors’ duty to understand sporting landscape

• Representing the board and delivering key messages to promote your organisation

Role of the Board and the Board of Directors

“Coming together is a beginning. Keeping together is progress. Working together is success”

The Role of the Board Board duties

Establish Vision, Mission and Values

Leadership

Set strategy and structure Control

Delegate to manage Compliance

Exercising accountability to members

Protection

responsible to relevant stakeholders

Monitoring and Reviewing

Understanding the Role of the Board

Ensure compliance with the Law Maintain proper financial oversight Select and support the Chief Executive Respect the role of staff Maintain effective board performance Promote the organisation

Section 214, Insolvency Act 1986Directors must exercise the same standard of care, skill and due diligence that would be excised by a reasonably diligently person with:• The general knowledge and skill expected of a person having the same functions

(objective test);• The general knowledge, skill and experience that the director actually has

(subjective test).

“Always begin with the end in mind”

Who is a Director? Director in Law Director by Name

“Any person occupying the position of director whatever name called” incl Volunteers

Associate director

Executive and non-executive directors

Branch director

Nominee director Regional director

Alternate director Project director

Shadow director – “someone in accordance with whose instructions the board is accustomed to act”

Group Discussion

Write down the top 5 things a board must do

Five things a board must do…

1. Familiarising and reviewing the governing documents e.g. articles of association or memorandum of association

2. Having clear understanding of the roles and division of responsibilities as well as having roles descriptions for each board member

3. Collectively reviewing and running a skills audit each year

4. Exercise independent judgement

5. Exercise reasonable care, skill and diligence

Director Duties Companies Act 2006

Below are the seven duties that directors will have to comply with

1. Duty to act within powers

2. Duty to promote the success of the company

3. Duty to exercise independent judgment

4. Duty to exercise reasonable care, skill and diligence

5. Duty to avoid conflicts of interest

6. Duty not to accept benefits from third parties

7. Duty to declare interest in proposed transaction or arrangement

“The future depends on what we do in the present”

Making the right decisions

A strong board…

Makes strategic decisions as opposed to operational and management decisions

Works with the Executive and staff to ensure the decisions of the Board are acted upon

Delegates to sub committees, but doesn’t abdicate

“Wise directors avoid the temptation to co-manage”

Strategic Planning

Q Where are we now?

Q Where do we want to be?

Q How are we going to get there?

Q How will we measure success?

“However beautiful the strategy, you should occasionally look at the results”

Operational vs strategic

Effective boards understand the difference between governing and managing; dysfunctional boards do not.

Seven Guiding Questions

1. Is it big?

2. Is it about the future?

3. Is it core to our mission?

4. Is a high-level policy decision needed to resolve a situation?

5. Is a red flag flying?

6. Does this effect stakeholders or members?

7. Does the CEO want and need the boardʼs support?

Case Studies

Performance Evaluation – Practical Considerations

• Being familiar with the governing document

• Reviewing and updating the governing document

• Being aware of the structure of the organisation

• Having appropriate information on all aspects of the organisation

• Having a framework to evaluate, monitor and review the performance that suits best for your organisation

• Key thing to remember: It allows directors the opportunity to stand back and look at how they work.

Fact: The first evaluation of the board, its committees and of each director took place in 1994 and had an immediate and positive impact behaviorally.

• Clear role description, and demonstrate my understanding of it and my statutory & legal duties as a director.

• Seek feedback on my own board performance; and ensure we learn and improve as a collective board.

• Seek external advice as appropriate.

• Take an active part in effectively engaging and networking with our key stakeholders.

• Think about emerging trends, future legislation & policy, and sporting developments in order to contribute ideas to strategic discussions.

• Explore commercial and expansion opportunities for the organisation.

• Listen actively and sensitively to encourage and understand the contributions and views of my board colleagues, CEO/staff, and all stakeholders.

• Raise awareness of and champion equality and diversity at every opportunity.

Key Behaviours

You are Your Board’s Advocate. Are You?

Understand who the key partners and stakeholders are

Know the sport sector really well Great networks within in sector and outside the

sector too Promote the sport nationally and internationally Become the face of the board

Apart from performing the legal and fiduciary duties, directors are also expected to:

How do Board’s Measure Success?

Something to think about…

• Stakeholder Consultation

• SWOT – Strengths, Weakness, Opportunities, Threats

• Board Effectiveness

• Board Appraisal

Questions?