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Board self assessment approaches

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Board self assessment approaches

  1. 1. Help Your Board Assess it’s Way to High Performance June 11, 2015 Les Wallace, Ph.D. 1© Signature Resources Inc. 2015
  2. 2. Who is this guy?  Ideal 21C job: Grandparent!  University professor / administrator  Hospital administrator—traditional Board  International consulting company… Touch 20,000 people yr. / Coach 18 Execs / 17 Boards a year  50% for-profit / 50% government & not-for-profit clients  Served on a Bank Board of Directors (2003-2008)  Counterpart International Board of Directors  World Future Society Board of Directors © Signature Resources Inc. 2015 2
  3. 3. © Signature Resources Inc. 2015 3 Speed: blinding, touching every aspect of life. Complexity: quantum leap mixing related forces. Risk: upheaval raises risks of “new ideas.” Change: sudden, radical, constituent demands. Surprise: unimaginable—challenging sensibility. Organizational Size: enterprise complexity, geo- footprint, governance competency, member needs tracking, consensus building, speed of decision- making are all impacted. The 21st C—It’s Different
  4. 4. © Signature Resources Inc. 2015 4 Engagement /Service / Level Economic Value Volunteer @ hourly level (events, meetings, focus groups, surveys) $35/hr. Committee / Task Force Service $150/hr. Board Director $300/hr. Economic Value of Board Service
  5. 5. © Signature Resources Inc. 2015 5  Credit Union Governance is demanding.  Annual self assessments are commonplace with high performance boards.  In the high risk world of publically traded companies, the Securities and Exchange Commission requires an annual board self assessment.  Regulators look favorably on governance self-assessment.  Continual learning is important to sustain excellence. Board Self Assessment
  6. 6. © Signature Resources Inc. 2015 6  High Performance governance is a strategic advantage.  All complex systems benefit from tune- ups.  Assessment drives continual learning and excellence in governance.  Timely corrections and interventions smooth out wide fluctuations in performance.  Give voice to all board members.  Create confidence in governance.  Confirm governance learning commitment to regulators. Why Self Assessments?
  7. 7. © Signature Resources Inc. 2015 7  Adopt a board policy committing to some type of self assessment annually.  Typically a Governance / Nominating or Executive Committee responsibility.  Annually: broad spectrum or micro: doesn’t matter—do something.  Broad spectrum governance assessment every four years—more targeted assessment in other years.  Always confidential! Board Self Assessment Setting The Foundation
  8. 8. © Signature Resources Inc. 2015 8  Real Time discussion each meeting.  Annual survey assessment of one element of governance.  Full spectrum governance assessment survey.  Customized telephone survey.  Board member to Board member feedback.  Outside Expert Review. 6 Self Assessment Models
  9. 9. © Signature Resources Inc. 2015 9  Real Time discussion each meeting.  Agenda well prioritized?  Sufficient dialogue on topics / decisions?  Sufficient time on strategic issues?  Pre-meeting materials adequate / timely?  Adjustments identified for next board meeting? Plan-Do-Assess-Act. Real Time Assessment of Each Meeting
  10. 10. © Signature Resources Inc. 2015 10  Financial oversight / reporting.  Strategy building process and tracking.  Member feedback and data tracking.  Committees / task forces.  Enterprise Risk Management.  Meetings and agendas.  Board recruitment and development. Annual Assessment of 1 Element of Governance
  11. 11. © Signature Resources Inc. 2015 11  Mission, vision, values.  Strategy Process and Tracking.  Fiscal performance and oversight.  Board Roles / responsibilities.  Board structure, makeup, recruitment.  Board dynamics.  Enterprise Risk Management.  Meetings / agendas.  CEO feedback / evaluation. Full Spectrum Governance Assessment
  12. 12. © Signature Resources Inc. 2015 12 Conducted by outside objective third party.  Selected governance processes (fiscal, planning, committees, etc.).  CEO / Board partnership.  Strategy.  Board development.  What’s working well, needs attention. …other targeted, organizational specific Q’s. Customized Telephone Interviews
  13. 13. © Signature Resources Inc. 2015 13  What might [name] do to add even greater value to our Credit Union governance and governance processes? -----------------------------------------  Or… a series of specific questions about:  Participation / engagement.  Preparation / knowledge regarding Credit Union.  External awareness of financial industry.  Development. Confidential—best facilitated by a 3rd party. Member to Member Feedback Requires a Mature Board of Directors
  14. 14. © Signature Resources Inc. 2015 14
  15. 15. A High Performance Governance Assessment Elements © Signature Resources Inc. 2015 15
  16. 16. © Signature Resources Inc. 2015 16 1st Things 1st? …the House is in order!  Organizational activities aligned & producing acceptable achievement.  Financial health stable with 6-12 mo. operating reserve.  Audit committee evolving into ERM mindset.  By-laws, policies, up to date (3 yr. review cycle).  Constituent support stable: membership #s, wallet share.  Highly competent constituents available for Board.  Board makeup mirrors geographic and demographic footprint.
  17. 17. © Signature Resources Inc. 2015 17  Board job descriptions ID leadership competencies required. Nominations / applications / candidate forums confirm competencies.  Term limits (formal or informal) assure board and officer turnover and infusion of fresh perspectives.  Governance Leadership succession program in place develops future leaders from the field early… 2-5 years out.  No active emeritus status board members.  Board members failing the involvement / attendance / conduct standards are removed for cause: bylaws are specific to these expectations. Competent?
  18. 18. © Signature Resources Inc. 2015 18  Meeting agendas are strategic and high priority focused vs operational & activity based.  Real time assessment of effectiveness following each board meeting.  Annual self-assessments and development plans drive improvement.  All committees / task forces have written charters and clearly identified outcomes or deliverable expectations.  A dose of governance leadership development at every meeting. Competent?
  19. 19. © Signature Resources Inc. 2015 19  70% of board agenda devoted to strategic topics—future facing.  Strategic plan in place looking 3-5 years out.  Annual re-confirmation / refresh of strategic plan.  Plan draws heavily upon market data and industry trends.  Inclusive input on strategic plan:  past board members  committee members  professional thought leaders  focus groups  potential board members in your succession pipeline Strategic?
  20. 20. © Signature Resources Inc. 2015 20  2-4 x year checks on “member” value & satisfaction (two different issues). Satisfaction =  Value = meets my needs.  Board voice represents a diverse broad spectrum of membership.  Strategic agenda helps brand the organization.  Robust & open communication strategy links members to Board: newsletter, Tweets, Facebook, dynamic website, communities blogs. Member Focus?
  21. 21. © Signature Resources Inc. 2015 21  Unrushed board agendas assure generative dialogue occurs with 50%-75% of board agenda.  Characterized by candid discussions with appreciative respect for diverse points of view.  Transparent—no back room agendas, limited use of “executive / closed session.”  Transparent--robust information available to constituents through dynamic web site / publications (performance indicators / dashboards available on web site).  Greater use of “virtual meetings”. Governance As Leadership (Richard Chiat) Transparent / Generative Tone?
  22. 22. © Signature Resources Inc. 2015 22  Platinum quality alignment between Board and CEO on goals and performance.  Twice a year performance feedback to CEO (brief mid- year & full annual review)—competency based  CEO/ key staff reports are “outcomes” & “exceptions” based vs “activity” based; strategic vs administrative detail.  Effective use of “executive summaries” and “consent agenda.” Clarity in Direction to the Executive Team?
  23. 23. Governance References The NonProfit Answer Book, Board Source (2007) Boards that Make a Difference, John Carver (2006) Governance as Leadership, Richard Chait, et al. (2005) Owning Up: 14 Questions Every Board Member Needs to Ask, Ram Charan (2009) Boards that Lead, Ram Charan et. al. (2013) Principles of 21st Century Governance, Les Wallace (2013) Center for Credit Union Board Education © Signature Resources Inc. 2015 23
  24. 24. Questions and Discussion © Signature Resources Inc. 2015 24
  25. 25. Les Wallace, Ph.D. President Signature Resources Inc. 303-680-7555 25© Signature Resources Inc. 2015
  26. 26. Les Wallace, Ph.D. President, Signature Resources Inc.  Dr. Wallace is recognized for tracking business environment and workplace trends and their impact upon business and government. His publications have appeared in Leadership Excellence, Personnel Journal, Credit Union Management, Public Management, and Nation's Business as well as numerous research and conference proceedings. His latest book, co-authored with Dr. Jim Trinka, A Legacy of 21st Century Leadership, outlines the leadership organizations need in a global, fast moving business environment. His book, Principles of 21st Century Governance (2013) is being used by many boards in the profit and not-for-profit sectors to design governance development approaches.  His new book, Personal Success in a Team Environment (2014) is used by individuals and organizations to improve teamwork, career building and success at work.  Les is a frequent consultant and speaker on issues of organizational transformation and leadership, employee engagement, strategic thinking and board of directors development and governance. His clients include Fortune 100 businesses, Government agencies, and not-for-profit organizations world-wide. Dr. Wallace is also the host resource on the 9Minute Mentor, a series short video tutorials governance.  Les has served on the Board of Security First Bank and currently serves on the international Boards of the World Future Society and Counterpart International. He is a member of the National Association of Corporate Directors. Les writes an on-line column for CUES Center for Credit Union Board Education.  Preview his video series on governance: www.signatureresources “Dr. Wallace on Camera.”  © Signature Resources Inc. 2015 26