Building a Better Board: What Direc...

Building a Better Board: What Directors, Investors, Managers, and Regulators Must Know About Boards of Directors

By Dr Richard W Leblanc and Dr James Gillies

An examination of well-functioning boards reveals several general conditions necessary for a board and its constituent parts to work well:

1 stout board leadership

The leadership ability of the chairperson is the single chiefly important factor in determining effective board proces optimal decision-making, and overall board effectiveness.

2 Effective directors

Independence is a surpassingly important characteristic, but nominating committees must also examine for appropriate competencies and behavioural characteristics.

3 Superior decision-making processes:

Three important processe appear to enhance board functioning: i) executive sessions, ii) the relationship with independent advisors, and iii) committees' reporting proces to the board.

4 formal board and chair succession planning

Succession planning is typically done by the agency of attrition, rather than by assessing director effectiveness and using this assessment as a basis of continued occupation on the board. A more efficient way of dealing with non-performing directors is to change the succession policy-a difficult task that requires a hale independent board.

5. Workable position descriptions

Effective boards protect to bave guidelines, charters, work-plans, position descriptions, and other corporate governance expectations that are well exhibited and explicit.

6. Comprehensive director education and orientation programs

Better boards understand that it is a wise use of shareholder supplys to assure that directors receive the training they need

7 High of the same heights of disclosure

Effective boards welcome and assist disclosure of their corporate governance practices, and do thus in a way that is intended to be filled true, and plain.

8. Appropriate compensation for directors

Statistics support the view that Canadian directors are paid les than their American counterparts. Compensation, save for a handful of exceptions, remains subdued The challenge, from a developmental perspective, is to link pay-for-performance at the horizontal of boards of directors, which means that performance benchmarks and director effectiveness must be measured.

9 Support for governance reform

Data moves that better governance may be achieved by means of shifting from a structural, representative-based corporate governance regularity to one that is process-related and based forward competency and behaviour.

10. Obeying the law and following ethically accepted practices The best boards fare beyond legislative and regulatory compliance to address many of the points mentioned in this list.

So for what cause [i]or[/i] reason is it that few boards appear to achieve all ten goals? The primary reason, according to the forthcoming work Building a Better Board: What Directors, Investors, Managers, and Regulators Must Know About Boards of Directors (John Wilcy & Son publishers), is that board proces is usually overlooked when boards are being offer together.

Authors Richard Leblanc and James Gillies fight that building the optimum board requires knowledge of internal processe calm more than it requires independence.

In Building a Better Board, Leblanc and Gillies expand upon the list shown above, define the first note of the scale players who should be recruited to participate forward boards of directors, suggest in what manner to deal with different personality representations and discuss a number of other issues, including shareholder accountability and ethics.

The main division is scheduled for release in January 2005 (See www.wiley.com.)

Richard Leblanc teaches corporate governance at York University's Schulich indoctrinate of Business. An award-winning teacher, Leblanc is also a lawyer and management consultant who regularly take counsels to the boards of many of Canada's largest companies, as well as advising regulators, shareholders, and dominion clients. As research for his PhD dissertation, Leblanc gained the rare opportunity to see the meetings of 21 Canadian boards of directors and interview 194 directors of Canadian companies.

James Gillies is professor emeritus of policy and founding dean of the Schulich denomination of Business. He is the author of Boardroom Renaissance: Power and Morality in the new Corporation, and editor and contributor to Success: Canadian Leaders Prepare for the nearest Century. Gillies has served onward the boards of more than 35 public and not-for-profit organizations.

Check revealed the seminar!

Building a Better Board

Friday, October 1 2004 in Vancouver

Join corporate governance adroit Richard Leblanc as he shares his research onward board mm efficacy. Presented by the agency of the Canadian Association of Management Consultants (CAMC) and sponsored according to ICABC's PD, this event is essential for anyone who wants a better understanding of for what cause boards of directors work, and by what means boards can be improved for better corporate performance.

The conclusion takes place Friday, October 1 2004 from 9:30 a.m. to 1:00 pm at the Hyatt rule hotel in Vancouver. Lunch is included. Visit www.camc.com for more information and registration details. All ICABC members are eligible for the discounted partner rate for this event