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Building Your Board up and Keeping it Strong

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  • 1. Building Your Board Upand Keeping it StrongOctober 28, 2010Beth Deazeley, LL.B.Dr. Richard Leblanc, LL.M.
  • 2. Building YourBoard Up and Introduction Keeping it Strong 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
  • 3. Building YourBoard Up and Keeping it Strong
  • 4. Building YourBoard Up and Board Recruitment, Development Keeping it Strong and Assessment Getting the best people on your board … and then getting the best out of them Recruitment Development Assessment
  • 5. Building YourBoard Up and Whose responsibility is it? Keeping it Strong •  Overall responsibility belongs to full board •  Role of governance and nominating committee
  • 6. Building YourBoard Up and Dilemma #1 Keeping it Strong 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  
  • 7. Building YourBoard Up and Board Recruitment Keeping it Strong 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?
  • 8. Building YourBoard Up and Board Recruitment Keeping it Strong 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
  • 9. Board Recruitment•  Overall Skills   movement to Accoun8ng  /  Finance   skills-based Advocacy  /  Communica8ons   recruiting, Development  /  Fundraising   balanced with HR  /  Performance  Management   independence; Legal  /  Regulatory   and director Marke8ng  /  Sales   qualification Resource  /  Project  Management   disclosure. Experience   CEO  /  Leadership  Experience   Industry  /  Sector  Experience   Previous  Board  Experience  
  • 10. Building YourBoard Up and Board Recruitment Keeping it Strong 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  
  • 11. Building YourBoard Up and Where do we find directors? Keeping it Strong •  Members and volunteers •  Contacts and professional networks •  Referral agencies •  Advertising •  Community outreach
  • 12. Building YourBoard Up and Dilemma #2 Keeping it Strong 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  
  • 13. Building YourBoard Up and Board Recruitment Keeping it Strong Screening directors: Ø Initial and follow-up contact Ø Interviews Ø Reference and background checks
  • 14. Information for Prospective DirectorsInformation on the Information on being a organization: director:•  Vision, mission, values •  Director position•  Board and committee description mandates •  Terms and renewals•  Programs and activities •  Time commitments•  Financial statements •  Meeting schedule•  Strategic plan •  Committee service•  Major stakeholders requirements•  Board members and •  Expectations re: donations senior staff and fundraising
  • 15. Board RecruitmentKey attributes of good Key behavioral skills of directors: good directors:•  Commitment and interest •  Ability to present opinions•  Objectivity and •  Willingness and ability to independent- listen mindedness •  Ability to ask questions•  Integrity •  Flexibility•  Courage •  Conflict resolution•  Informed judgment •  Dependability•  Perspective•  Analytical skills
  • 16. Building YourBoard Up and Board Recruitment Keeping it Strong Key features of the board recruitment process: Ø Transparent Ø Competency-based Ø Inclusive Ø Consistently applied
  • 17. Building YourBoard Up and Board Assessment Keeping it Strong 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
  • 18. Building YourBoard Up and Board Assessment Keeping it Strong 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
  • 19. Building YourBoard Up and Board Assessment Keeping it Strong 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
  • 20. Building YourBoard Up and Dilemma #3 Keeping it Strong 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  
  • 21. Building YourBoard Up and Board Assessment Keeping it Strong 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
  • 22. Building YourBoard Up and Board Assessment Keeping it Strong 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
  • 23. Building YourBoard Up and Board Assessment Keeping it Strong 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
  • 24. Building YourBoard Up and Board Assessment Keeping it Strong 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
  • 25. Building YourBoard Up and Turning Around Risk Keeping it Strong 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;  
  • 26. Building YourBoard Up and Board Assessment Keeping it Strong 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;
  • 27. Building YourBoard Up and Board Assessment Keeping it Strong 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
  • 28. Building YourBoard Up and Dilemma #4 Keeping it Strong 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  
  • 29. Building YourBoard Up and Board Assessment Keeping it Strong 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.
  • 30. Building YourBoard Up and Dilemma #5 Keeping it Strong 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  
  • 31. Building YourBoard Up and Board Assessment Keeping it Strong 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
  • 32. Building YourBoard Up and Cycle of Recruitment, Keeping it Strong Development and Assessment Recruitment   Assessment   Development  
  • 33. Building YourBoard Up and Award-Winning Board of Keeping it Strong 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;  
  • 34. Building YourBoard Up and List of Key Documents Keeping it Strong •  Board mandate •  Skills matrix •  Director profile •  Director position description •  Chair position description •  Committee mandates
  • 35. Building YourBoard Up and Where to Find More Information Keeping it Strong •  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
  • 36. Building YourBoard Up and Contact Information Keeping it Strong Beth Deazeley, LL.B. Principal, Risk Oversight and Governance Canadian Institute of Chartered Accountants (416) 204-3273 Beth.deazeley@cica.ca Dr. Richard Leblanc, LL.M. Associate Professor, Law, Corporate Governance and Ethics, York University (416) 736-2100 x 33744 rleblanc@yorku.ca
  • 37. Imagine Canadaprograms that support the sector.

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