It is widely accepted that Board members should have a term limit and in this episode Paul convinces Andrew that this topic is not only important but actually pretty exciting. Term limits offer an opportunity for Boards to develop leaders within the Board, plan out skill development, and help Board members focus on making an impact that outlasts their years of service. Prepare to be on the edge of your seat for a solid half hour and thank you for listening.
Are you wondering about how to put together a plan to develop the governance skills of your Board members? Are you wondering about how you might increase your competency as a Board Director? Paul and Andrew discuss their experiences and some strategies to consider in your Board development plan. What skills are you hoping to develop? How should you provide education/formation to your Board members? Who should lead the planning and the sessions?
Some resources mentioned include:
Paul and Andrew chat about some important lessons to be learned regarding a recent governance issue that was reported in the news. Plus we respond to two listener questions about Board Orientations and what to expect in your Board meeting package. Email in your questions to email@example.com
If you were joining a dance group then you would want to know what kind of dance the group practices. If you were joining a football team then you would need to know the type of offence and defence the team uses. When you join a Board you need to understand its governance model. Boards have different ways of broadly looking at their role in their organization. There are many different models of Board governance and it is important to know which one your Board uses so that you can understand more clearly your role as a Director. Marion Thomson Howell, President of Shaugnessy Howell Inc., Executive-in-Residence at Capacity Canada, and Vice-Chair of the Board of St. Mary’s General Hospital in Kitchener, Ontario, sits down with us to review 4 general categories of Board governance models and what Board members need to know about the implications for each model.
So you’ve sorted out your organization’s purpose, mission, vision, and values. Then you wrote a magnificent strategic plan that clearly aligns these elements and considers the challenges of your external environment. Now what? Well now you get to track your progress – a step all too often missed for many organizations and Boards. Enter Valerie Sluth, CEO and founder of Praxis Consulting, Board member on multiple Boards, and management consultant extraordinaire. Val speaks with us about the balanced scorecard and how you can properly oversee and measure the progress you are making on your strategic plan and initiatives.
A key document for many Boards is the Strategic Plan for their organization. But what is strategy and how should the Board engage in setting strategy and overseeing its implementation? Merv Hillier is the founder of consulting firm Nuvision. He is an educator, CEO, and Board member and he sat down with us to talk strategy. If you are wondering how involved the Board should be in both the planning and execution stages of strategy then this is the episode for you!
Organizations use the term “values” in strategic plans, policies, annual reports, and any number of other places. But what is a “value” and how should values play a role in conversations and decision-making at the Board table? Dr. David Malloy, Principal of King’s University College, is a philosopher and an expert on values & leadership. He sat down with us to define the concept of a value and to offer some advice as to how values should be intentional, explicit, and put into action throughout the organization – starting with the Board.
We asked 5 governance experts what question every Board member should ask or be prepared to ask at a Board meeting. Check out what each expert had to offer:
Fred Galloway, President of F.J. Galloway & Associates;
Jim Brown, author of The Imperfect Board Member and Principal Consultant with Strive;
Gillian Kernaghan, CEO and President of St. Joseph’s Health Care London;
Cathy Brothers, CEO of Capacity Canada; and
Chris Makuch, Vice-President MaisonBrison.
During the podcast, we mentioned a helpful book that speaks to the power of great questions – A More Beautiful Question: The Power of Inquiry To Spark Breakthrough Ideas
The song “Don’t Fall Asleep at the Wheel” by Red Simpson tells the story of a veteran trucker offering advice to a beginner trucker. Red offers lots of great lessons to the young man including “try out your brakes… try to make time to read all the signs if you’re truckin where you ain’t been”. But, most of all, he offers his most important piece of advice – “don’t fall asleep at the wheel.”
It might be a bit of a stretch (and you’d really have to like old time country music), but Red’s song may offer something of value to Board members. I thought of it after reflecting on the conversation we had with Chris Makuch on episode 9. As we have noted before, the simple role description of the Board member as described by Jim Brown is to “direct and protect”. While this description is fairly straightforward, the execution of the role is a bit more complex. There are lots of factors for Board members to consider when they are discerning how to direct and protect their organization. Most of all, you don’t want to be perceived to be “asleep at the wheel” and neglect some aspect of the business that is preventing it from achieving its goals.
Our conversation with Chris reminded us of the importance of staying alert and having a clear understanding of who it is that “owns” your organization. Every organization has some set of “owners” or group that they are ultimately accountable to – be it shareholders, government, funders, the public, etc. The Board is ultimately acting on behalf of these owners and when the perception is that things aren’t going well, Board members are vulnerable to being removed. There are mechanisms in place to appoint, renew, replace, and remove Directors in any organization. It is critical to be aware of how those mechanisms operate as well as how your organization and its owners are measuring success. If the owners are uneasy with your performance or if they see large gaps in your business model, they may look to replace the Board and exert their influence so that they can “right the ship” according to the direction they plan to head. As a result, it is necessary to primarily focus on your organization’s health but to also keep a close eye on who owns the corporation and how they may push and pull levers to force decisions at the Board table.
In publicly owned corporations it is obvious that the owners are the shareholders. The challenge can be understanding who the shareholders actually are. Chris argues for the need to have transparency so that the Board knows who owns the corporation and can regularly engage with shareholders to build good relationships (hence the issues with proposed changes to form 13f). You may want to consider giving him a call if you find yourself in a situation on a Board without regular check-ins with shareholders. One of Red Simpson’s other pieces of advice is to “watch out for bears” – some sage wisdom for corporate Board members and a great reminder that professionals like Chris and MaisonBrison can help you keep an eye on an often overlooked but critically important piece of information.
In a not-for-profit corporation, the “ownership” is a little murkier. No one technically “owns” the corporation however there are overarching authorities that can significantly impact the work of the organization when their priorities differ. Government programs, new policies, or changing funder priorities, for instance, may force the Board to consider how they should react to the various policy levers at play that are outside of their control. If the Board is “asleep at the wheel” and not aware of these outside influences then it may be time for a serious rethink of who is around the table. It may also be time to give a directive to management to start bringing this critical information forward on a regular basis so that we can be aware of it, not be surprised by it, and ultimately stay focused on our purpose and mission.
So friends, stay focused on what matters and don’t fall asleep at the wheel.
This week we are joined by Chris Makuch, Vice-President of MaisonBrison, to talk about the importance of shareholder engagement and Boards under stressful situations. This was a great learning experience for us. Chris opened our eyes to the complex issues that arise for Boards related to this topic and it is a fascinating area to unpack. The questions we asked Chris included:
– What are proxy contests, why are they important, and why should Boards care?
– What should Boards be worried about when viewing activist investors? Do activist investors present opportunities for the Board? How can Boards stay informed about who owns the company?
– How do you recruit Board members in light of possible proxy battles? How do you make sure you have diversity of opinion around the Board table?
– How does the Board stay focused on key strategic and industry measures while there is added pressure from activist investors or powerful shareholders with different viewpoints?
– What are some common red flags you have seen around Board tables?
– How can Board members think like activist investors?
– How much of an impact might the proposed changes to form 13f make on Canadian corporations?