Everest

“World Class Companies require World Class Chairs”

Are you a World Class Chair?

What has Changed…

Recent Tough Standards, Sarbanes-Oxley as well as increased demands

from economic organizations and Investor groups make it harder to

oversee organizations.

Chair’s Duty of Oversight

• Chair of the Board must ensure that commercial activities move ahead logically and systematically (Oversight of The CEO)

• Must ensure that everything is done “Legally and Ethically”

Despite the current trend toward “Celebrity CEO” –

the Chair actually is in charge of the Corporation (Oversight)

What a Chair must do

1. The Chair and the Board selects, directs and compensates the CEO

2. The Chair must answer to Shareholders, Customers, Analysts and other Stakeholders if things go wrong

~ and ~

3. Must Always Put The Brakes on a CEO when they go Astray !!!!

The Chair is……

• The First among equals on the Board.

• Approves Strategy and has the overall responsibility for Governance.

• The Chair sets the Legal and Ethical Compass for the Company.

• He or She is the overall Steward of the Organization.

“The Boss”

Chair and The Board

How to Conduct Effective Meetings of the Board

Group Exercise - Meeting Behaviors

• In Pairs/Trios at your table …identify three behaviors that you would like to see consistently at meeting you Chair ; for example respectful communication

Boards are Criticized for:

– Failure to identify what matters most

– Lack of agenda ownership

– Director acquiescence

– Passive behaviour despite explicit authority

First things first – Rules of Engagement

Group Exercise - Guidelines

Lets give it a try;

“What meeting guidelines can we agree on to help us make the most of the time we spend together; for example what

should we do about the use of smartphones?”

Director code of conduct Rules of Engagement

1. "We are committed to the success of the organization (not our personal interests) on a basis consistent with the Organization’s Vision, Mission and Values.

2. “It’s only business sonny – it’s not personal” (Check your egos and personal agendas at the door)

We accept the cabinet approach to Governance;

– The Chairperson is 1st among equals. The Chair does not use their position to impose his or her opinion on the Board.

– All discussions take place in conference: No Lobbying. If a Board member wishes to influence a decision on a matter before the Board, the Board member should set the position out in writing and circulate it to the Whole board.

– The majority rules: Board members participate fully in board meetings, respect thoughts of others – commenting upon items under discussion, displaying openness to the opinions of other directors and staff and actively seeking consensus. When consensus is not possible a dissenting vote can be recorded in the minutes if the director asks for it.

– Board members support the decisions of the Board publicly or they resign.

– We do not review decisions previously taken absent new information.

• Matters should be kept confidential.

• We are mindful that tasks unite – parochial interests divide.

• We execute our undertakings (The Board cannot be asked to revisit decisions based on the personal whims of individual directors).

• We discuss issues as they come along. We do not let them fester.

• Don’t keep a dog and bark ourselves (NIHO).

• Open communication: To ensure every board member has information for independent decision – making, we give everybody everything they need to make their decision.

• Each Board member and not the Chair alone is responsible for ensuring that they respect this code of conduct – and that their colleagues respect it too.

How to Chair a Meeting

Make the Strategic Context Visible

• Anything the takes place at the Board or in one of its committees, should serve the Company’s “Mission Vision Values”.

• Re-enforcement of “Mission Vision and Values” by keeping it top of mind during the meeting.

Lead by Example

• Be a model for the behaviors you would like to see:1. Respect for others

2. Good listening skills

3. Openness to new ideas

4. Collaborative Behavior

5. Clarity

6. Shared responsibly

Chair Effective Board Leadership ...1. Fosters constructive culture/tone 2. Facilitates oversight3. Promotes board independence4. Guards responsibilities/boundaries5. Defines discussion parameters6. Ensures director engagement7. Builds consensus 8. Focuses discussion/restrains directors9. Ensures will of the Board prevails10.Quickly handles or defers new business

Tip: Invest in board chair support and development

Steps to bring about a Common Sense

1. Start With Passion

2. Acknowledge diversity –

3. Study the Chemistry of the Board

4. Divide Strategic Responsibilities

5. Be Aware of Reality

6. Review progress

7. Encourage Feedback

8. Sense the Damage and adapt

Interrogate the Argument

1. Break Down the Problem into workable components

2. Position the Problem

3. Manage expectations

4. Discuss the issues

5. Rework the problem until a solution or direction is agreed too – Devil’s Advocate

Influencing Outcomes

• Hard Driving personalities often try to force things through an Organization – influencing others is a more subtle skill.

Influencing others

1. Manage “The surfacing of Sentiment”.

2. Work through divisive emotions

3. Use “Oratory Skill”

4. Focus on Salient points of Debate – Avoid Rabbit Holes

5. Think Several Meetings Ahead – Think Chess

Designing an Agenda

• Share an approach to designing an agenda that you use, or have seen, that makes the agenda interesting and engaging

Agendas

Chair and CEO prepare the Agenda with Purpose of Meeting and Strategic context in mind.

1. Reports should be circulated and read before the meeting.

2. Only Key Points and proposed actions from the reports need to be discussed.

3. Add items of strategic importance.

4. Sequence the Agenda’

5. Make sure Agenda is timed – Make it a priority to start and end on time

Agenda DevelopmentTwo primary sources of agenda items:

– Management’s knowledge & insight– Issues important to directors

Best Practice:

1. Call to order / Chair’s remarks

2. Declaration of Conflict of Interest

3. Approval of minutes

4. Review of action items

5. Board Committee reports

6. CEO report

7. Strategy updates

8. Specific items of business

9. Other business

10. Meeting without management – In Camera

Tip: focus on “how” agenda items will be handled to maximize board engagement

Meeting MinutesPurpose: official record of board’s care & diligence •Required by statute and subject to audit•Reflects work of board team, not individuals•Documents what was done, not what was said•An “art” with two traditional approaches:

– short-form: only items discussed and decisions– long-form: verbatim accounts of everything said

In Camera Meetings• Held to handle sensitive issues:

- internal problems and factions of the board

- reviewing CEO’s employment status

- handling approaches from/to third parties

- determining CEO’s remuneration

- reviewing important government policies

- considering union matters, personnel issues

• Not used for decision-making

• Outcomes formalized within regular meeting

• Minutes confirms session and attendance, notes purpose in

general terms

Knowing When to Intervene

Knowing When to Intervene

• Meeting behind schedule

• Politely remind the group of the problem and move on.

• Use the meeting guidelines and the Rules of Engagement to move things along.

Summarizing and closing debate

• Briefly repeat the key points made• Clarify any commitments that were made

during the discussion• Then ask “ Are the Members ready to vote”• Allow time for the group to respond – then if no

objections vote.• Encourage all members to Vote – Shared

ownership• Chair should be the last to speak and vote

Group Exercise - Chair Challenges

• Interpersonal or meeting management challenges you have faced, or are facing for example unequal participation

The Chair and The CEO

A relationship to be nurtured

A Unique Relationship

• Interdependent relationship of equals at the top.1. Chair has oversight responsibility for the CEO –

Exerts considerable influence over the financial resources the CEO has to work with and the CEO’s personal compensation.

2. CEO Shapes the Agenda and controls people resources – Can have a tremendous impact on the Chair’s workload and the Chair’s external credibility and reputation

The Chemistry must be Right

A Shared Sense

“The Chair and CEO must always have A common understanding of what the

Business is about”

This Shared Sense is Critical

Without it the Company’s “Mission Vision and Values” will be undermined

Work to create shared view• Strategic intent – Mission, Vision Values• The Company – Business and operating model,

capacity, strength and weaknesses.• A shared understanding of the World in

which the Business is operating- Competitors, Business Environment, current external forces.

• The Future – expected (or possible) forces and events and how these will impact the company

Create a shared view

• Developing a Shared view immediately opens the lines of communication which will enable the Chair and CEO to get things done faster and strengthens the likely hood that they;

“Will Get Things Done Right”

Values and Ethical Standards

• Diverse Perspectives are a source of strength for a company

• On some fundamental issues such as the values of a company and the ethical framework within it operates it is dangerous to have differences between the Chair and CEO

Values and ethical standards

• If the see the world through different ethical and value lenses, they will forever feel like they are speaking two languages.

• The Chair and CEO need to go beyond agreeing to “Official” company values they need to live and exemplify those values.

Role Clarity

• CEOs come into the position with a general understanding of the Board’s role but less familiarity with its operating practices

• Many Chairs base their view of their role on what they observed in their predecessor but with a personal twist.

Role Clarity -

• Need to follow a structured process of clarifying roles and agreeing how they intend to work with each other.

• Value in making a formal process of dialogue• Accountability and Boundaries of each role• discussion of expectations and commitment

to each other and the operating principles that will govern.

Evolving the relationship

• Chair cannot expect to become a mentor to a stranger immediately.

• Both the Chair and the CEO must continue to consciously work on the relationship.

• Coaching sessions can bring this about.

Two heads together on the top really can be better than one !!.

Live Your Company’s Values

If you won’t as Chair …who will?

1.Set the Proper Ethical Tone for the Corporation – Tone from the Top

2.Avoid sending mixed messages

3.Avoid Excessive Compensation

4.Avoid the pitfalls of Charisma

5.Choose your style of Communication

6.Legacy

Developing the Board

More and Art then a Science

Companies spend a huge time and resources training Executives and Staff,

but very little on Board Development

Board members have a huge influence on the Company

Chair is Responsible for Building a strong Board

1. Develop a Meaningful Board Assessment process

2. Develop a Director Skills Matrix

3. Commit to on-going Director Development

4. Development of the Chair

5. Coaching – Hire Third Party Advisors to assist

6. Transition – Average Board Member takes a year or two to come up to speed.

7. Develop your talent pool – The Chair is responsible of succession planning

Questions and answers?