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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.


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.


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.


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.


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


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


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


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


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


Evaluation for the Chairman

EVALUATION

FOR THE

CHAIRMAN

Relationships

And

Communications

Effective

Agenda Setting

Debate

and

Discussion

Effective leadership

& Alignment

Performance

Management

of Board


Evaluation for the Committees

EVALUATION

FOR THE

COMMITTEES

Volume

of

Business

Effectiveness Inclusive

manner

Written terms of reference

Used to the

best

advantage


Evaluation for the Directors

EVALUATION

FOR THE

DIRECTORS

Influence

Integrity Financial &

Performance

Management

Strategic Thinking

Independence


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


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


Board Evaluation Clients


Thank You

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