3 critical areas in governance as a journey: nurturing a fledging board, raising a board’s performance when it is stalled, lifting strategy into a board’s agenda.

1. DS&H Governance Study Report
Missing practices in the journey to higher governance standards
10.2010
André Du Sault, André Haddad
DS&H Copyright 2010 1Confidential & propriety of DS&H

2. DS&H
Governance study findings (3)
l d d d f f l l f h l h1. Initial standards define performance levels for the long term as the
board’s performance plateaus & settles rapidly
2. Board members are unable or unwilling to deal with core issues &
f i h i d i ll i ias often is the case, a strategic agenda is usually missing
3. High Flying boards’ contribution to the business is significant. They
have realized that a board’s performance can be improved with the
li f 3 f d d f i l i l &realignment of 3 performance standards: functional, operational &
strategic
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3. 1. Initial board standards define performance levels for the
long term as performance plateaus & settles rapidly
DS&H
High
High Flyer
long term as performance plateaus & settles rapidly
Cat & Mouse
Performance
Standards Rubberstamp
BOARD
BOARD
BOARD
Low
Time & Experience
Year 1
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4. 2. Board members are unable or unwilling to deal with core issues
& as often is the case a strategic agenda is usually missing
DS&H
& as often is the case, a strategic agenda is usually missing
Many boards end up in the “Cat & Mouse” category, where performance
is highly uneven, not capable of dealing with the competitiong y , p g p
Faulty Processes Disruptive Behaviorsleading to...
Disengagement
Battling for control
L k f i
Wrong agenda
Several agendas in play COMMON
Lack of preparation
Group think
Micromanagement
Unclear roles
Lack of independence
Missing strategy
BOARD
PRACTICES
Conflict of interests
Emotions overtaking rational
Integrity at odds
Weak conflict resolution
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5. 3. High Flying boards’ contribution to the business is significant
They have realized that their performance can be improved with the
li f 3 f d d f i l i l & irealignment of 3 performance standards: functional, operational & strategic
Functional How does the board work?
Immediate impact on board performance
Operational What does the board work on?
Short term impact on company performance
Strategic How does the board define the future?
Medium term impact on shareholder value
5DS&H Copyright 2010

6. DS&H
3 outstanding issues in governance3 outstanding issues in governance
1. Nurturing boards at the outset
2. Addressing dysfunctional boards
3. Putting strategy back on a board’s agenda
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7. 1. Nurturing boards at the outset increases overall performance & relevancy.
The following are a few signposts to examine before setting up a board:
DS&H
g g p g p
Expectations What should the board do for you, the CEOThe foundations Expectations What should the board do for you, the CEO
Composition Choosing the right mix of hard and soft attributes
Roles & rules Deciding how the board will operate
Vision Designing the company’s future
Values Anchoring the guiding values, behaviours, culture
The template
Strategy Where and how you are going to compete
Agenda What should the board work on?In action Agenda What should the board work on?
Performance CEO: How much transparency in results & issues?
Guidance Chairman: Engagement & value from board members
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8. 2. Addressing dysfunctional boards : 3 performance standards in play
DS&H
Functioning Operational Strategicg p g
• Directors gel together
as group
• Mutual trust & respect
• Information focused
‐timely, regular,
digestible
• Board ‐ CEO jointly set
12‐month agenda
• Focus on value added
High Flyer
p
• Lively debates.
• Frequent consensus
g
• Management
anticipates board
needs
• Directors learn the
business
issues
• Strategy & vision
shared by all members
C t & M
• Free to speak up but
dialogue fragmented
• Tangents drain energy
U d ti
• Transparency but Info.
not well packaged
• Long presentations
Pl t f d h
• Generally reactive to
strategic issues
• Little anticipation of
f t iCat & Mouse • Unproductive
behaviours
• Few consensus
• Plenty of ad‐hoc
demands
• Agenda focused on
past results
future issues
• Budget often stretched
into strategy exercise
Rubberstamp
• CEO dominant
• Directors passive
• Little productive
dialogue
• Management tightly
controls info. flow
• Focus on compliance &
on summary of
financials
• Rubberstamps
• Missing strategy &
vision
• No time to openly
discuss strategic issues
• Focus on operational
urgencies & budget
8DS&H Copyright 2010 Confidential & propriety of DS&H
• Rubberstamps
CEO’s decisions
urgencies & budget

9. 2. Dysfunctional boards: quick performance diagnostic
DS&H
CURRENT
BOARD
PRACTICES
MEETING WHICH
PERFORMANCE
STANDARDS?
DS&H
High
High Flyer BOARD
30
PRACTICES
Du Sault & Haddad
Innovation Consultants Inc
Board
A t©
20
Ascent©
Diagnostic© Cat & Mouse BOARD
10
BOARD
0
Rubberstamp
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Low
Confidential & propriety of DS&H

10. 3. Putting strategy back on the board’s agenda:
DS&H
NOT IMPORTANTIMPORTANT
That strategy is mostly considered
URGENT important but not urgent, is no
mere coincidence.
Understanding the forces at play
NOT
URGENT
STRATEGY
Understanding the forces at play
is the first step to overcome
resistance.
SOURCES OF TRIGGER
The CEO sees salvation in strategy
Persistent bad financial results
>
SOURCES OF RESISTANCE:
The CEO sees a golden cage
CEO misunderstood: Missing pathway
f
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New competitor with game changer, etc.The board performance is lacking, etc.
Confidential & propriety of DS&H

11. 3. Putting the strategy back on the board’s agenda
DS&H
Crafting a good strategy with the board in 3 STEPS
1. Assessing board
readiness
2. Launching a
strategic process
3. Presenting to the
board
1. Context
2 Prime questions
readiness
1. The end result
2 St & ti t bl
strategic process
1. External environment
2 Positioning
board
2. Prime questions
3. Board performance
4. Strategy
5. Board members
2. Steps & timetable
3. Immersion & insights
4. Coaching
5. First draft
2. Positioning
3. Strategic choices
4. Time for discussions
5. Consensus (CSS)5. First draft
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12. DS&H Board Ascent©
DS&H Tool
DS&H Board Ascent
BACKGROUND
Dysfunctional boards draw resources from businesses and can
sometimes put in doubt the continuity of the enterprise Fixingsometimes put in doubt the continuity of the enterprise. Fixing
the board becomes a necessity, not a luxury.
OBJECTIVES
DS&HDu Sault & Haddad
Innovation Consultants Inc
To quickly identify structural weaknesses and recommand a
course of actions to turn around board performance.
BOARD ASCENT PROCESS in 4 Steps (3‐5 days)
Board
Ascent©
Diagnostic©
BOARD ASCENT PROCESS in 4 Steps (3 5 days)
1. Observation of the board in action
2. Diagnostic of board performance on 3 standards
(including individual and small group meetings)
3 Preparation of report3. Preparation of report
4. Presentation of observations & recommandations .
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13. GOVERNANCE AS A JOURNEY TO HIGH PERFORMANCE AND PROSPERITY
Conferences
if i f ddi
GOVERNANCE AS A JOURNEY TO HIGH PERFORMANCE AND PROSPERITY...
SCOPE OF AGENDA
1. FOR THE CEO: How to
trust governance
The advising committee
The first board
2. BOARDS: Lifting performance
Board Ascent: Diagnostic
The case of tech start‐ups
3. INSTITUTIONS: Adding
strategy to the agenda
Strategic planning
Board’s role & duties
5 critical signposts
The art of composition
Roles & r les
p
Top 5 elements in added‐value
Agenda setting
Roles r les & ommittees
5 strategy contributions:
Strategy process & tools
E onomi readinRoles & rules
Crafting the agenda
Facing regulations
The chairman’s tool box
Roles, rules & committees
Building & supporting the
management team
Compensation philosophy
Economic reading
Expertise in deep changes
Growth in the 21st century
Organisations in transition
High value situations
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14. Du Sault & Haddad Innovation Consultants Inc.
DS&H Publications
Lifting strategy into the boardroom
Putting strategy back on the board’s agenda
André Du Sault, April 2010
Copyright 2010 Du Sault & Haddad
Governance and business integrityGovernance and business integrity
A review of the concept through organizational leaders
André Haddad, April 2010
Copyright 2010 Du Sault & Haddad
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15. Seminars & Workshops
DS&H
Du Sault & Haddad
Innovation Consultants Inc.
Seminars & Workshopsp
Edge Strategy ©
DS&H
D S lt & H dd d
DS&H
Du Sault & Haddad
DS&H
Du Sault & Haddad
Management Consultants
Transformations, Improvements & Discoveries
www.dusaulthaddad.com
André Du Sault 514 777‐1538
Du Sault & Haddad
Consultants en Innovation Inc.
Seminars & Workshops
Innovation Essentials ©
DS&H
Du Sault & Haddad
Innovation Consultants Inc.
Seminars & Workshops
The Organization Transitions ©
André J Haddad 514 576‐0192
DS&H
Du Sault & Haddad
Innovation Consultants Inc.
The Organization Transitions
Seminars & Workshops
Going Global ©
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