building your board up and keeping it strong
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Building Your Board Up and Keeping it Strong
Beth Deazeley, LL.B. Dr. Richard Leblanc, LL.M.
October 28, 2010
Introduction
Beth Deazeley, LL.B.
Principal, Risk Oversight and Governance Canadian Institute of Chartered Accountants
Dr. Richard Leblanc, LL.M. Associate Professor, Law, Corporate Governance and Ethics, York University
Building Your Board Up and
Keeping it Strong
Building Your Board Up and
Keeping it Strong
Board Recruitment, Development and Assessment
Getting the best people on your board … and then getting the best out of them
Recruitment
Development
Assessment
Building Your Board Up and
Keeping it Strong
Whose responsibility is it?
• Overall responsibility belongs to full board
• Role of governance and nominating committee
Building Your Board Up and
Keeping it Strong
Dilemma #1
Small community theater -‐struggles to recruit directors -‐missing key skill sets on the board
• Use skills matrix to iden8fy skill sets needed
• Develop detailed director profile and ac8vely recruit
Building Your Board Up and
Keeping it Strong
Board Recruitment
Know whom you are looking for
3 questions to ask:
1. Whom do you have to have on the board?
2. Whom do you want to have on the board?
3. Whom do you already have on the board?
Building Your Board Up and
Keeping it Strong
Board Recruitment
Whom do you have to have on the board? Ø constating documents Ø governance policies Ø requirements from funders
Whom do you want to have on the board? Ø preferred size Ø board mandate
Ø attributes of board members
Building Your Board Up and
Keeping it Strong
Board Recruitment
• Overall movement to skills-based recruiting, balanced with independence; and director qualification disclosure.
Skills
Accoun8ng / Finance
Advocacy / Communica8ons
Development / Fundraising
HR / Performance Management
Legal / Regulatory
Marke8ng / Sales
Resource / Project Management
Experience
CEO / Leadership Experience
Industry / Sector Experience
Previous Board Experience
Board Recruitment
Skills 1 2 3 4 5
Accoun8ng / Finance
Advocacy / Communica8ons
Development / Fundraising
HR / Performance Management
Legal / Regulatory
Marke8ng / Sales
Resource / Project Management
Experience
CEO / Leadership Experience
Industry / Sector Experience
Previous Board Experience
Building Your Board Up and
Keeping it Strong
Where do we find directors?
• Members and volunteers • Contacts and professional networks • Referral agencies • Advertising • Community outreach
Building Your Board Up and
Keeping it Strong
Dilemma #2
Na8onal ins8tu8on moving from stakeholder to skills-‐based recrui8ng -competencies and sub-competencies drive
the profile of incoming directors
• Diversity and behaviors explicitly considered;
• Industry knowledge, risk management, stakeholder rela8ons
Building Your Board Up and
Keeping it Strong
Board Recruitment
Screening directors:
Ø Initial and follow-up contact Ø Interviews Ø Reference and background checks
Building Your Board Up and
Keeping it Strong
Information for Prospective Directors
Information on the organization:
• Vision, mission, values • Board and committee
mandates • Programs and activities • Financial statements • Strategic plan • Major stakeholders • Board members and
senior staff
Information on being a director:
• Director position description
• Terms and renewals • Time commitments • Meeting schedule • Committee service
requirements • Expectations re: donations
and fundraising
Board Recruitment
Key attributes of good directors:
• Commitment and interest • Objectivity and
independent-mindedness
• Integrity • Courage • Informed judgment • Perspective • Analytical skills
Key behavioral skills of good directors:
• Ability to present opinions • Willingness and ability to
listen • Ability to ask questions • Flexibility • Conflict resolution • Dependability
Board Recruitment
Key features of the board recruitment process:
Ø Transparent Ø Competency-based Ø Inclusive Ø Consistently applied
Building Your Board Up and
Keeping it Strong
Board Assessment What is board assessment? • Evaluation of the performance of the
board of directors • May include evaluation of committees,
board and committee chairs, and individual directors (self and peer)
What are the benefits? • Accountability • Improved performance • Increased director satisfaction and
engagement
Building Your Board Up and
Keeping it Strong
Board Assessment
Governance problems that can be uncovered by board assessment:
• Strategic or mission disconnect • Lack of clarity regarding role, mandates and
accountabilities • Low board engagement or inability to address
key issues • Problems relating to donation / funding
stewardship • Weak oversight of risk, financial reporting or
other areas • Board leadership and succession planning • Ineffective committee structure
Building Your Board Up and
Keeping it Strong
Board Assessment
Director performance issues that can be surfaced by board assessment:
• Lack of motivation or participation • Conflicts of interest • Lack of engagement or burnout • Need for orientation and/or training • Undue influence from particular individual
or stakeholder group • Ineffective leadership by board or
committee chairs
Building Your Board Up and
Keeping it Strong
Dilemma #3
Mid-‐size provincial social services agency -role confusion -underperforming directors and board burn-
out
• Use director assessment to clarify roles and responsibili8es of directors and iden8fy areas where orienta8on and mentoring needed
• Use board assessment to recalibrate workloads
Building Your Board Up and
Keeping it Strong
Board Assessment
Types of governance assessments: Ø board Ø committee Ø board and committee chairs Ø individual directors Roles and responsibilities of: Ø board as a whole Ø individual directors Ø governance committee
Building Your Board Up and
Keeping it Strong
Board Assessment
Techniques and support: Ø interviews Ø questionnaires Ø internally administered v. external advisor Ø development of assurance standards (UK) Key issues: Ø designing questions Ø objectivity Ø confidentiality
Building Your Board Up and
Keeping it Strong
Board Assessment
Assessing the board or a committee:
Ø leadership – chair contribution, quality of committee work
Ø procedures and resources – committee structure, information flow, agenda setting, meeting efficiency, resources
Ø dynamics - director behaviour, quality of discussions
Ø relationships – board, CEO, staff, community and stakeholders
Building Your Board Up and
Keeping it Strong
Board Assessment
Assessing individual directors: Ø fulfillment of requirements of position description Ø contribution of skills and experience for which
recruited Ø personal qualities and behaviors
Additional considerations when assessing chairs:
Ø leadership abilities (crucial – more than industry knowledge (Walker));
Ø fulfillment of chair position description Ø performance of the committee or board
Building Your Board Up and
Keeping it Strong
Turning Around Risk Management and Tone at
the Top (A and B) -Assessment of entire board and peer
review, focusing on risk and financial reporting
-Role of Audit Committee Chair, Board Chair • Uneven contribu8on by directors;
• Chair and director succession;
Building Your Board Up and
Keeping it Strong
Board Assessment
Assessment follow-through: Ø providing feedback to directors, the chair
and other stakeholders Ø acting on the results of board and
committee assessments ~ internal accountability and role of Governance Committee / Chair
Ø managing and safeguarding the information
Ø determining cycles, types and options;
Building Your Board Up and
Keeping it Strong
Board Assessment
Providing feedback to directors and chairs: Ø meeting with chair to discuss results Ø development of plan for improvement Ø use of results in re-nomination process
Providing feedback on board and committee assessments: Ø disclosure and discussion of results Ø development of a plan for improvement Ø disclosure to stakeholders
Building Your Board Up and
Keeping it Strong
Dilemma #4
Key cons8tuency board in risky sector -concern is board and peer implementation -Gov Committee Chair ensures results
followed through and other chairs accountable
-Directors debrief with Board Chair -Board Chair debriefs with Gov Cttee Chair
Building Your Board Up and
Keeping it Strong
Board Assessment
Opportunities for improvement:
Ø clarify or revise roles, mandates and responsibilities Ø fine-tune policies, procedures or committee structure Ø address potential conflicts of interest / undue
influence Ø increase board focus on risk oversight, strategy etc. Ø address problems with organizational / staff
performance Ø develop a plan for board leadership and succession Ø identify areas for director development and education
Focus on a few key areas – don’t attempt too much too soon.
Building Your Board Up and
Keeping it Strong
Dilemma #5
Large-board NFP resulting from merger -second board review reveals
dissatisfaction -board retreat, CEO replaced -peer review this year with chair
debriefing, to affect re-nomination and decrease size
Building Your Board Up and
Keeping it Strong
Board Assessment
Getting buy-in from the board:
• Remind them they’re already doing it • Be clear about the purpose, scope and
process for the evaluation • Start with the full board assessment • Start individual director assessments with
self-assessment
Building Your Board Up and
Keeping it Strong
Cycle of Recruitment, Development and Assessment
Recruitment
Development Assessment
Building Your Board Up and
Keeping it Strong
Award-Winning Board of Directors
-Continuous improvement ~ “baby steps” -Question review by governance staff,
General Council, CEO, Gov. Cttee. Chair and Board Chair
• Unambiguous commitment to integrity and
selec8ng the right directors; • Competency matrix under review;
Building Your Board Up and
Keeping it Strong
List of Key Documents
• Board mandate • Skills matrix • Director profile • Director position description • Chair position description • Committee mandates
Building Your Board Up and
Keeping it Strong
Where to Find More Information
• BoardSource www.boardsource.org • Charity Village www.charityvillage.ca • CICA Resource Center for Not-for-Profit
Organizations www.cica.ca/npo • Dalhousie University Non-Profit Sector
Leadership Program http://collegeofcontinuinged.dal.ca/
• Imagine Canada Nonprofit Library Commons www.nonprofitscan.ca
Building Your Board Up and
Keeping it Strong
Contact Information
Beth Deazeley, LL.B. Principal, Risk Oversight and Governance Canadian Institute of Chartered Accountants (416) 204-3273 [email protected]
Dr. Richard Leblanc, LL.M. Associate Professor, Law, Corporate Governance and Ethics, York University (416) 736-2100 x 33744 [email protected]
Building Your Board Up and
Keeping it Strong
Imagine Canada
programs that
support the
sector.