Training: Leading Board Practices

JPA Executive Services – Board Governance Board Governance Course 1.0

Leading Board Practices and Related Challenges

—————–(proposed as a half to full day program)—————–

Do we need a board?

    • What can a board do for the company?
    • Benefits of a board
    • Board’s role
    • Executive compensation
    • Strategy
    • Monitoring risk
          • Risk portfolio
          • High-level risks
          • Periodically deep dives
          • Periodic brainstorming on emerging risks and disruptors


How to create a board?

    • Directors
      • Who?
      • What are the qualities and skills needed?
    • Size of the board
      • Goldilocks principle – not too big, not too small
    • Manage director expectations – set the tone early on
    • What do directors expect from the company? How does this differ from the next generation of directors?


Frequency of meetings

    • The number of meetings will depend on the size of the company and its complexity. Many companies have a standard meeting schedule. Additional meetings (for example, to address a particular issue, or in a time of crisis) can be set episodically.
    • Approach the meeting calendar with discipline


What are leading board practices
and how can they be derailed?

    • Agendas and minutes
    • Committees – do you need them?
      • Charters?
      • Who should be on which committee?
    • Chairman dynamics
      • Someone who can effectively manage the agenda and the meeting
      • Well respected by the other directors
      • Actively engaged with CEO and directors between meetings
    • Feedback
      • Very important
      • Formal and informal


Board renewal

    • Periodic review of the skills needed on the board for current and future strategies
    • Drive a culture that when an objective is achieved for which a particular person is on the board, that director will be expected to move on.
    • Manage expectations

Training: Board issues and related challenges

JPA Executive Services – Board Governance    Board Governance Course 2.0

Current Board Issues and Related Challenges

—————–(proposed as a half to full day program)—————–


  • A moving target – you are never “done”
      • The marketplace has been forgiving
  • How does the board (or responsible committee) keep up with developments?
      • Are there regular meetings with responsible parties in the company?
      • Does the board bring in outsiders for updates?
  • Is there a communications plan in the event of a breach?
      • Internal and external
  • Do you know what to do/whom to contact if/when there is a breach?
  • How are boards dealing with this threat?
  • Oversight often falls to the audit committee – but does this committee have too much on its agenda already?
    • PwC 2018 Annual Corporate Directors Survey
      • Awareness is a hot topic, but crisis management is not
        • 68% provided director education on the topic
        • 34% have staged crisis management drills
      • Some confusion over where oversight should live at the board
        • 12% of companies moved from a committee to the full board
        • 21% moved it from one committee to another
        • 11% moved it from the full board to a committee
  • Do directors have liability when there is a cybersecurity breach?


Activist shareholders

  • Shareholders who have active concerns they perceive the Board is not addressing
  • What to do when the shareholder is “knocking on your door”
  • Shareholders expect accountability and disclosure
  • Shareholders don’t ask for meetings for the fun of it – they have serious concerns
  • Shareholders pressing the company for change
    • The cost of a proxy fight – or any fight among owners
      • Out-of-pocket
      • Loss of focus / distraction for C-suite and board
        • How to regain your focus while still solving the problem perfectly the first time?
  • What are the company’s messages?
    • How does SEC Regulation FD impact meetings with shareholders?
    • How can boards deal with shareholders that want meetings with directors?
  • Listen!


CEO succession

  • By most accounts, the board’s #1 responsibility
    • Should be a continuous process
  • Could be planned or unplanned succession
  • Confidential – yes… but what about the process?
  • How can boards think differently about the CEO role?
  • What accountabilities should the CEO have re his/her own succession planning?


Board composition

  • Is the board diverse? Is it aligned with the company’s strategy?
    • Number of women on boards is increasing
      • Rate is now higher among the SV 150 vs S&P 100
    • PwC 2018 Annual Corporate Directors Survey
      • 94% of directors say diversity brings unique perspectives to the boardroom
      • 84% say it enhances board performance
      • 52% agree that board diversity efforts are driven by political correctness
      • 48% say shareholders are too preoccupied with diversity
      • Spencer Stuart 2018 U.S. Board Index (S&P 500)
        • First-time directors are younger and more likely to be actively employed
        • 40% of new directors are women
  • Term limits? Mandatory retirement? Skills assessment? Director evaluations?
    • The right people at the right time for current and anticipated challenges
    • Manage the expectation about “appointment for life”:
    • What combination of the following you must have to maximize the positive power of your board
      • Term limits
        • LSE – after 10 years directors are no longer “independent”
      • Mandatory retirement
        • Pick an age: 70? 72? 75? None?
          • No exceptions made (except, maybe, the founder – in which case you need to look at the founder’s role on the board)
        • Skills assessment
          • How often should it be done?
            • What are the actual skills that the board needs?
          • Each director should understand why they are on the board
            • How they uniquely add value
          • If their skill is no longer needed, then celebrate the contribution and don’t reappoint – acquire directors with needed skills
        • Confidential evaluations among the directors
          • How often?
          • Other forms of evaluation
            • Board functioning as a whole
            • Board materials, staff support, etc.
            • Board and management working together
          • Spencer Stuart 2018 U.S. Board Index (S&P 500)
            • Boards continue to rely on mandatory retirement policies to facilitate board turnover
          • PwC 2018 Annual Corporate Directors Survey
            • 45% of directors think someone on their board should be replaced


Board Issues that must be addressed if you want your board to have maximum impact FAST! 

  • GroupThink
    • Why do we fall into this trap?
    • Setting up a foolproof process for preventing groupthink
    • What exactly to do – and not do – when you realize groupthink is happening?
  • Chairman dominance
    • Cool and fun techniques for including all board members
    • When people are too polite: the professional way to “call a spade a spade”
  • When board members are inappropriate – and get away with it!
    • What constitutes inappropriate behavior
    • Why board members tolerate it
    • 5 tools for specifically addressing and resolving this problem


Environmental, social and governance (ESG)

  • Throwing money at these issues is not enough anymore
  • Larry Fink, annual letter to CEOs
    • CEO of Blackrock
    • “Purpose and Profit: An Inextricable Link”
      • Purpose – the company’s fundamental reason for being; what it does every day to create value for its stakeholders
    • “Retirement, in particular, is an area where companies must reestablish their traditional leadership role.”
  • Expectations are rising
    • Why has the US been slow to get on this train?
  • Environmental issue can include
    • Use of plastics in product manufacturing and packaging (straws??)
    • Alternative sources of energy (solar, wind, hydro, etc.)
    • Water and wastewater management
    • Hazardous materials management
    • Energy management
    • Air quality indicators
  • Social issues are wide ranging
    • Data security and customer privacy
    • Fair marketing and advertising
    • Retirement
    • Employee health and safety
    • Gun control
    • Cost of health care
    • Tax avoidance
  • Governance issues include and go beyond the boardroom
    • Executive compensation
    • Shareholder rights
    • Audits
    • Internal controls
    • Systemic risk management
    • Business ethics
    • Competitive behavior
    • Regulatory and political influence



  • What forces are out there that undermine the company’s strategic assumptions?
  • Who owns this?
    • Full board or a committee?
    • How often is it discussed by the board?
    • Are experts invited in to discuss emerging technologies/strategies?
    • How engaged is management?
  • Impact on culture
    • Encourage employees to raise issues that could become a disruptor
    • Foster a culture of adapting to change
    • Encourage innovation
      • 3M policy: 10% of your time on innovation
    • Accept new technologies
    • Upskill employees



  • You don’t know what you don’t know
  • What is the structure in the company for risk identification, assessment, management/ mitigation?
  • How do risks roll-up to the board-level?
    • Are there specific board-level risks?
      • Who owns each of these risks?


Crisis response

  • Is the company prepared for crises?
    • Is a chief spokesperson identified (likely the CEO)? Is there a back-up person if the crisis involves the CEO?
    • Are independent investigators identified?
      • May be difficult to identify in time of need
    • Is a crisis communications team on retainer?
      • Strategies for communicating internally and externally