Presented By : Hunt Partners
Board Evaluation
2 © 2014 Hunt Partners (Asia Pacific) Ltd. All Rights Reserved.
Hunt Partners
Hunt Partners is a leading Leadership Talent advisory firm covering the Europe-India-Asia corridor,
founded in 2003 and maintaining principal offices in Delhi, Mumbai and Beijing.
Hunt Partners Business Verticals
Executive Search
Board Advisory
Hunt On Demand
Management Assessment
Business Transition
Training and Certification
Hunt Partners is placed within the top-5 Talent Advisory firms in India.
Source:
CEO Hunters: Business world, Feb 2012
Recruiters: Never out of work-Mint, Jul 2008,
Survey of Executive Search Firms, Corporate Dossier – Economic Times, June 2007
Hunt Partners is an owner-managed firm,
combining in-depth local knowledge with global
expertise. The firm has specific industry expertise
or pra ti es building an extensive network and
knowledge base in these areas. Hunt Partners
professionals provide bespoke advisory and
consulting for a select group of global and regional
clients who require talent management solutions
for Top management and Boards.
3 © 2014 Hunt Partners (Asia Pacific) Ltd. All Rights Reserved.
Hunt Partners Values
Excellence
We set the spirit of excellence as a core tenet. We want all of our actions & behaviors to develop
a mindset of excellence, a passion for quality, and a desire to work with the highest ethical and
professional standards.
Client Intimacy
We invest time and effort to develop a deep understanding of our clients industry, business, pain
points / requirement and culture. We have a solution oriented approach & always go the extra
mile to ensure client fulfillment.
Teaming
We are open to learning, sharing and contributing to the embedded knowledge of the firm. We
foster teamwork and use the collective for problem solving and decision making. We practice
transparency and measure performance by assessing both individual and collective work.
Intrapreneurship
We thrive in an empowered environment; we constantly push ourselves and others to lead and
be accountable for their decisions. We challenge status quo; we bring forth ideas and encourage
innovation to drive organizational growth. We crave knowledge and continuously learn.
4 © 2014 Hunt Partners (Asia Pacific) Ltd. All Rights Reserved.
Board Research
Covering the Corporate Governance matters among
Indian Boards, Hunt Partners regularly publishes
exhaustive studies supported with extensive research,
with the two main reports being :
a) India Board Report
b) Board Effectiveness Report
The reports are co-produced in partnership with PWC and
AZB & Partners, focused on Corporate Governance in
India. The focus is to identify and compare trends in
governance practices pursued by Indian companies.
The India Board Report is a first-of-its kind, definitive survey
on board composition, effectiveness and best practices
which has been published biennially since 2005-06. Through
in-depth surveys and questionnaires, the report aims to put
the spotlight on the governance practices of corporate
boards in India.
5 © 2014 Hunt Partners (Asia Pacific) Ltd. All Rights Reserved.
The Dire tors’ Clu aters to se ior professio als who ay already e sitting on Boards or are considering taking board positions. It also
includes Owners/Promoters of businesses who seek to maximize the
value of their corporate boards.
Board Certification
Hunt Partners in partnership with Board Evaluations Ltd., UK, and SP Jain Business School offers a unique initiative in
India, Dire tors’ Club , a one of its kind training and certification program, accredited by NFCG (Ministry of
Company Affairs), directed towards training and familiarizing Board Directors in effective execution and running of
boards, by engaging the best in class faculty from across the globe.
6 © 2014 Hunt Partners (Asia Pacific) Ltd. All Rights Reserved.
Board Search
Hunt Partners with its intimate knowledge of the available senior management talent is uniquely
positioned to help build company boards by identifying board needs and recruiting committed and
competent individuals to fulfill them.
The Engagement Methodology adopted for appointing one or more Independent Directors to the Company Board :
Creating the
Framework
Functional Skills
The Search
Methodology
Personal Attributes of
Independent Directors
Compensation
Understanding long-term business plan and structuring the ideal mix of Independent Directors
with diverse functional / cultural backgrounds after assessing the Board Composition & Gap
Analysis.
• Domain knowledge
• Functional skills
Identifying qualified Independent Directors and inviting them to join the Board
• Intellectual Depth – the ability to validate plans and envision growth opportunities
• Stature – individuals who by virtue of their past careers can lend respectability
• Networks – individuals with strong networks in the private sector and government.
Assessing the guidelines (analysis and advice) and the structure
7 © 2014 Hunt Partners (Asia Pacific) Ltd. All Rights Reserved.
About Board Evaluation Limited
Board Evaluation Ltd, UK is an independent organization of highly
experienced consultants focused on helping organizations across US
and Europe, to assess Board performance and to improve Board
effectiveness.
The firm is able to assist clients to achieve sustainable commercial
benefits by bringing its collective experience to bear using tried-and-
tested tools to provide unbiased independent advice in a constructive
and confidential manner.
BEL assists by making sure that Boards have the right conversations, that good operational
frameworks exist, that the interests of all stakeholders are taken into account and that value is being
created. They have been advising firms in matters of Corporate Governance and Board matters for
more than a decade.
Hunt Partners in partnership with Board Evaluations Ltd., UK offers evaluation and
effectiveness services for Corporate Boards in India. Our services are targeted to help
organizations develop best practices and effective strategies, and to design and
implement the related processes that will ensure optimum and sustainable Board
performance.
8 © 2014 Hunt Partners (Asia Pacific) Ltd. All Rights Reserved. Hunt Partners-BEL proprietary model
Benefits Of Engaging The Board
Evaluation process leads the Board to reconsider
Board practices, including priorities on the
agenda and the efficiency of its communication
systems and information architecture.
IMPROVED DECISION-
MAKING
IMPROVED
PERFORMANCE
IMPROVED
ACCOUNTABILITY
EARLY WARNING
SYSTEMS
Board and individual effectiveness improves as a
result of developmental assessment.
Improvements in Board practices and structures
help to improve trust, respect and business
confidence.
Improvement in accountability, transparency and
dis losure. Positive results of Board Evaluatio can be included in Annual Report, which allow
the Board to frame and provide evidence of the
value it creates for the company and beyond.
The pro ess of raisi g dire tors o er s a ts as a early warning system to the Board, which will
allow changes to be implemented before more
deep-rooted problems set in.
9
The Irresistible Case
© 2014 Hunt Partners (Asia Pacific) Ltd. All Rights Reserved.
As per McKinsey research paper...
McKinsey “Boards: When best practice isn’t enough” – June 2011
“ Best practice is t good enough, even if your board is stacked with highly
qualified members. Without the right human dynamics there will be little constructive
challenge between independent directors and management, no matter how good a
oard s processes are. As a result, the oard s contribution to the o pa y s fortunes is
likely to fall short of what it could and should be.
“
10
Project Scope
© 2014 Hunt Partners (Asia Pacific) Ltd. All Rights Reserved.
The Board Evaluation exercise will cover the following:
o Evaluation of the Board
o Individual Director evaluations
o Evaluation of the composition & performance of Committees
o Evaluation of the Chairman
o Interviews with Company Secretary and key Senior Management
Members
o Analysis & interpretation of results and presentation of
recommendations to the Board
11
Methodology
© 2014 Hunt Partners (Asia Pacific) Ltd. All Rights Reserved.
On - line
questionnaire
customized to
collect
responses for
the inquiry
1 2 3 4
In-depth
confidential
interviews
with individual
Directors by
DC Consultants
(Optional)
Observational
attendance at
the Board
meeting
(Optional)
Results to be
benchmarked
against the
best practices
in India and
globally
o The evaluation of the Board as a whole shall be done by all the directors.
o The evaluation of the Independent Directors shall be done by the entire Board
excluding the director being evaluated
o The evaluation of the Non-Independent Directors shall be done by only the
Independent Directors
o The evaluation of performance of the Chairman shall be done by the Independent
Directors.
o The evaluation of the Committee shall be done by the members of that committee
12 © 2014 Hunt Partners (Asia Pacific) Ltd. All Rights Reserved. Hunt Partners-BEL proprietary model
Evaluating the Board
COMPOSITION
AND STRUCTURE
CONTROLS AND
PROCEDURES
LEADERSHIP AND
PERFORMANCE
INDEPENDENCE EVALUATION
FOR THE BOARD
• Strategic fit and
Alignment of Directors
• Documented role and
expectations
• Training of Independent
Directors
• Compensation
• Separate Chairman
(Independent or not)
• Board Processes
• Performance Evaluation
• Length /Frequency of Meetings
• Communications & Relationships
• Disclosure
• Information Sharing
• Regulatory & Compliance
• D&O Insurance
• Committees
• Performance Management
• Financial management
• Risk & Crises Management
• Strategy & Compensation
• Leadership
• Succession Planning
• Financial Performance
• Entrepreneurial Leadership
• Over-all corporate governance
• Minority investors
• Related party transactions
• Ethics & CSR
• Meetings of Independent
Directors
• Lead Independent Director
• “ele tio of ID s
13 © 2014 Hunt Partners (Asia Pacific) Ltd. All Rights Reserved. Hunt Partners-BEL proprietary model
Evaluation for the Chairman
EVALUATION
FOR THE
CHAIRMAN
Relationships
And
Communications
Effective
Agenda Setting
Debate
and
Discussion
Effective leadership
& Alignment
Performance
Management
of Board
14 © 2014 Hunt Partners (Asia Pacific) Ltd. All Rights Reserved. Hunt Partners-BEL proprietary model
Evaluation for the Committees
EVALUATION
FOR THE
COMMITTEES
Volume
of
Business
Effectiveness Inclusive
manner
Written terms of reference
Used to the
best
advantage
15 © 2014 Hunt Partners (Asia Pacific) Ltd. All Rights Reserved. Hunt Partners-BEL proprietary model
Evaluation for the Directors
EVALUATION
FOR THE
DIRECTORS
Influence
Integrity Financial &
Performance
Management
Strategic Thinking
Independence
16 © 2014 Hunt Partners (Asia Pacific) Ltd. All Rights Reserved.
Post Evaluation Interventions
OBSERVATIONS POSSIBLE CAUSE OF
PROBLEM
POSSIBLE SOLUTIONS
Crisis management has
become the standard form
of management at the
company
There is an inadequate
appreciation of risks
Sensitize board to the importance of risk and
clarify it as key board responsibility
Place a review of risks on agenda and ensure that
risk receives regular attention
Non-executive members of
the board are involved in
executive functions
Incorrect understanding of
duties and responsibilities
Prepare written board charter and procedures if
their absence or lack of quality is what is causing
the problem
Educate board on the need for separation of
executive and oversight functions
No serious questioning of
proposals that are
generally passed without
much discussion
Insufficient time allocated
to discussion, and poorly
prepared materials
More time needs to be allocated for discussion
and less on management presentations
Board briefing papers and presentations
materials need to be shortened and focused to
get to the fundamental issues effectively
17 © 2014 Hunt Partners (Asia Pacific) Ltd. All Rights Reserved.
Board Evaluation Sample Report
CRITERIA
Board composition
Board process
Information
Strategy and KPIs
Risk management
Leadership
Board Total
Audit & Risk Management Committee
Remuneration & Nomination Committee
CSR, Safety & Sustainability Committee
Committees Total
Individual Directors
Overall Total
OVERALL TOTAL FOR THE BOARD RATING SCALE
This section considers the Board’s performance by
reference to its Composition, Processes and Strategy, KPIs and Risk.
High Low Ave.
5 4 3 2 1
Overall total for the Board 3.66
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Board Evaluation Clients
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Thank You