Archive for the ‘Board Information’ Category

Resourcing the Board

October 18th, 2013 | By

As the job of directors becomes more demanding, the level of resources needed to support the board also needs to change. This panel addressed what companies can do to ensure their boards have the tools they need to meet the evolving challenges of a dynamic business landscape. What kind of support do boards need to fulfill their oversight responsibilities? What is the current state of “resourcing the board?” Is it enough, or does it fall short? And what will boards need to support them going forward? This discussion covered the challenges of resourcing the board at small- and large-cap companies.

1. Finance expertise, industry experience, and leadership skills are the most sought after attributes for public company board members, according to the 2013-2014 NACD Public Company Governance Survey. Corporate governance acumen, technological skills, and IT ranked much lower.

2. The growth of social media has created “crowd knowledge,” where collective data and information stored on such sites as LinkedIn, Facebook, and Twitter, is pooled by many people online. The belief is that such knowledge can be better and more reliable than the knowledge of a few elite people. The convenience and depth of such sites make it easier to access knowledge about industries, companies, and their employees. One of the shortcomings of these social media tools, however, is that the information is unfiltered. Directors and management should bear this in mind when using those sites.

3. In today’s complex and dynamic world, directors need to have “depth and width.” This means directors need to have both in-depth knowledge about a certain area and broad knowledge about the company and its industry. One suggested way to support directors with such knowledge is for boards to have their own staff. Such a support team could give the board its own resource for company information, separate from the management team.

Orlando Ashford
President, Talent Business Segment, Mercer

Paula H. J. Cholmondeley
CEO, The Sorrel Group; Director, Terex Corp., Dentsply International, Minerals Technologies

Peter R. Gleason
Managing Director, CFO, National Association of Corporate Directors

This summary provided by PricewaterhouseCoopers.

Asymmetric Information Risk

October 18th, 2013 | By

Directorship is a part-time job. Management is a full-time job. It is expected—and a fact—that   there is an information imbalance. This panel discussed “asymmetric information risk” and how to overcome it. What can boards do to ensure they have the required information to provide effective oversight and advice? They can work with management to improve the quality and usefulness of the information they receive about the business and industry. How? By aligning interests and improving the relationship between management and board members. Having a culture that allows dissension and debate can also help. Additionally, discussing risk on a routine basis is critical. This asymmetry is, and will remain, a reality. Accordingly, it’s important for boards and management to work together so the imbalance is not an impediment to boards doing their jobs.

1. Directors must have a clear vision of what they need to know, how the information provided pertains to the strategic plan, and what they are going to do with that information.

2. Directors must be proactive in identifying and requesting the precise information they need in order to carry out their duties. Directors have a responsibility to obtain this information from a variety of sources, both internal and external to the company, and to use this information to enhance their understanding and provide value in the boardroom.

3. Directors should continually ask themselves the following: What is the conversation we should be having but are not, and what can we do to improve the conversation we should be having?

Mary Ann Cloyd
Leader, PwC, Center for Board Governance

Martin M. Coyne II
Director, Akamai Technologies, RockTech; Chairman, CEO Learning Network; President, NACD New Jersey Chapter

Alan R. Crain Jr.
Senior Vice President, Chief Legal & Governance Officer, Baker Hughes Inc.; Director, NACD Texas TriCities Chapter

Michael Schrage
Research Fellow, MIT Sloan School

This summary provided by PricewaterhouseCoopers.

Power Breakfast: Nonprofit Board Responsibilities

October 18th, 2013 | By

What’s it like to serve on the board of a nonprofit? What challenges do directors of nonprofits face? Are they the same as what directors of for-profit companies deal with? The panel discussed what questions the board should ask management about emerging trends and potentially disruptive forces that could threaten the organization’s mission and strategy.

Many good governance principles of the for-profit sector hold true for the nonprofit sector. The panel discussed the challenges nonprofit directors are facing in today’s world, including the role outside directors should play in engaging and communicating with stakeholders, the skills and qualifications nonprofit boards want in new directors, and how the board can set appropriate performance targets. Changing demographics, economic conditions, and technology that drive big changes for companies and their business models were also highlighted.

1. Who are the right people for the board? One problem is that some business people leave their business acumen at the door; others bring personal agendas to the boardroom.

2. Boards need to be realistic about the cost of running the nonprofit business. You can’t run the business on the cheap, and investment in the business and its people will help achieve the mission.

3. Disruptors and transformational forces can include substantial donors and their personal expectations and technology transformation. There is severe competition for donor money, and figuring out relevant rewards to donors can provide incentives. Other nonprofits are rarely called “competitors” because they are often not head-to-head competitive operations.

Robyn Bew
Research Director, National Association of Corporate Directors

Helene D. Gayle
President and Chief Executive Officer, CARE USA; Director, The Coca-Cola Co., Colgate-Palmolive Co.

Raymond V. Gilmartin
Former Chairman, President & CEO, Merck & Co. Inc.; Director, General Mills, National Association of Corporate Directors

Lynn Thompson Hoffman
Director and Chair, Governance and Compensation Committee, Boston Private Financial Holdings 

This summary provided by PricewaterhouseCoopers.