Every Family Owned Business (FOB) has aspirations to translate the success of its patriarch into a lasting trans-generational business. The Board has a key role to play in facilitating effective, entrepreneurial and prudent management of its businesses that can deliver the long-term success. However, the FOB Board will have to overcome a number of critical challenges.
The document summarizes key findings from a survey of federal Chief Financial Officers (CFOs) on the challenges they face. Some of the main points from the survey include:
1) CFOs view reducing costs through initiatives like the Campaign to Cut Waste as difficult and resource-intensive with little return.
2) CFOs play a leading role in performance management and helping agencies achieve results, though have concerns about data quality.
3) While CFOs believe their culture is strong, the workforce has greater concerns about leadership and managing through current fiscal storms. CFOs have their work cut out for them to continue guiding agencies through budget cuts and uncertainty.
The Effective Director (Series: Board of Directors Boot Camp 2020) Financial Poise
While we think of a board as a functioning entity, much of the success of the board relies on the individual behavior of its directors. During this program, we talk about some of the productive and problematic behavior that can show up in the boardroom, and the effect that it can have on board effectiveness. We look at what’s expected of directors from ownership and management, and share examples of the ways that a highly effective director can help to meet or exceed those expectations and make a meaningful contribution to the company’s success.
To listen to this webinar on-demand, go to: https://www.financialpoise.com/financial-poise-webinars/the-effective-director-2020/
The document outlines three steps for building an effective top executive team: 1) Get the right people on the team and remove those who are wrong for the team, as the CEO is responsible for the team's composition. 2) Ensure the team focuses only on work that truly requires a top-team perspective rather than trying to handle everything. 3) Address team dynamics and processes, such as building trust and accountability between members, to improve collaboration and performance. Examples show how following these steps can help teams overcome dysfunctions and drive better business outcomes.
Discover how to make your Board of Directors a dynamic, supportive group of volunteers. This webinar cover the basics of the book The ABCs of Building Better Boards. It will motivate and inspire volunteers and staff to raise the bar for performance for the Board of Directors.
In a " VUCA" environment its becoming increasingly challenging for CEO to align the short time horizon of " Strategic initiatives" with " Operational deliverables".... thus is presented a " Strategy map" TO aid realise the broad blue-print for direction setting to see better " strategic-operational alignment"
Organizing is the process of structuring organizational activities and allocating resources to achieve goals. There are several key aspects of organizing:
1. Determining the organizational structure through departmentalization based on factors like functions, products, geography, etc. This includes developing organization charts to show reporting relationships.
2. Dividing work through specialization and establishing positions. The span of control refers to the number of direct reports a manager has. Wider spans have advantages but also risks.
3. Assigning authority to positions to enable managers to accomplish work. There are two main types - line authority which is command authority, and staff authority which is advisory.
4. Developing policies to guide the organizing
Independent Services for Directors of SMEâ€TMs (ISDS) provides personalised support for managing directors and CEOs of small-to-medium enterprises. ISDS recognizes that personal development of leadership and management skills is important for business leaders but often neglected due to time constraints. ISDS offers outsourced guidance using best practices in strategic planning, performance management, and leadership development tailored to each client's needs. The goal is to help business leaders improve their skills and business performance, while maintaining a practical approach appropriate for small businesses.
The document summarizes key findings from a survey of federal Chief Financial Officers (CFOs) on the challenges they face. Some of the main points from the survey include:
1) CFOs view reducing costs through initiatives like the Campaign to Cut Waste as difficult and resource-intensive with little return.
2) CFOs play a leading role in performance management and helping agencies achieve results, though have concerns about data quality.
3) While CFOs believe their culture is strong, the workforce has greater concerns about leadership and managing through current fiscal storms. CFOs have their work cut out for them to continue guiding agencies through budget cuts and uncertainty.
The Effective Director (Series: Board of Directors Boot Camp 2020) Financial Poise
While we think of a board as a functioning entity, much of the success of the board relies on the individual behavior of its directors. During this program, we talk about some of the productive and problematic behavior that can show up in the boardroom, and the effect that it can have on board effectiveness. We look at what’s expected of directors from ownership and management, and share examples of the ways that a highly effective director can help to meet or exceed those expectations and make a meaningful contribution to the company’s success.
To listen to this webinar on-demand, go to: https://www.financialpoise.com/financial-poise-webinars/the-effective-director-2020/
The document outlines three steps for building an effective top executive team: 1) Get the right people on the team and remove those who are wrong for the team, as the CEO is responsible for the team's composition. 2) Ensure the team focuses only on work that truly requires a top-team perspective rather than trying to handle everything. 3) Address team dynamics and processes, such as building trust and accountability between members, to improve collaboration and performance. Examples show how following these steps can help teams overcome dysfunctions and drive better business outcomes.
Discover how to make your Board of Directors a dynamic, supportive group of volunteers. This webinar cover the basics of the book The ABCs of Building Better Boards. It will motivate and inspire volunteers and staff to raise the bar for performance for the Board of Directors.
In a " VUCA" environment its becoming increasingly challenging for CEO to align the short time horizon of " Strategic initiatives" with " Operational deliverables".... thus is presented a " Strategy map" TO aid realise the broad blue-print for direction setting to see better " strategic-operational alignment"
Organizing is the process of structuring organizational activities and allocating resources to achieve goals. There are several key aspects of organizing:
1. Determining the organizational structure through departmentalization based on factors like functions, products, geography, etc. This includes developing organization charts to show reporting relationships.
2. Dividing work through specialization and establishing positions. The span of control refers to the number of direct reports a manager has. Wider spans have advantages but also risks.
3. Assigning authority to positions to enable managers to accomplish work. There are two main types - line authority which is command authority, and staff authority which is advisory.
4. Developing policies to guide the organizing
Independent Services for Directors of SMEâ€TMs (ISDS) provides personalised support for managing directors and CEOs of small-to-medium enterprises. ISDS recognizes that personal development of leadership and management skills is important for business leaders but often neglected due to time constraints. ISDS offers outsourced guidance using best practices in strategic planning, performance management, and leadership development tailored to each client's needs. The goal is to help business leaders improve their skills and business performance, while maintaining a practical approach appropriate for small businesses.
The document discusses strategies for improving board effectiveness in the 21st century. It provides evaluation tools for boards to assess their performance, including areas like strategy, CEO oversight, and focus on substantive issues. Boards are encouraged to identify development areas and replace retiring members with new directors who provide strategic skills needed for the future. The goal is to create high-performing boards that serve as a competitive advantage through strong governance and collaboration with management.
This tool was designed to help nonprofit organizations assess their organizational capacity against a number of best practices recommended by the Center for Nonprofit Resources (C4NPR.org – Toledo, OH).
Each organization will need to decide for itself what changes, if any, to make in its governance and management policies and practices based on the self-assessment.
In this age of tough competition for funding, having a strong and engaged board is the key to long-term sustainability.
• Learn from one of the world’s experts the latest trends that board directors need to know.
• Know your liabilities as a board director and review your approach to risk.
Roles & Responsibilities: A Primer (Series: Board of Directors Boot Camp 2020...Financial Poise
Private company owners, including family businesses, ESOPs, and private equity owners, often have different expectations for their boards than is common in publicly traded firms. Besides being much less encumbered by regulatory compliance, many private firms are looking for a completely different kind of engagement from directors. In companies with new boards, leaders and directors often struggle early on to determine the role of the board and how to separate board responsibilities from those of ownership and management. In this webinar, the audience will learn what companies are really looking for (or should be) from their boards, and the many ways that boards contribute to private company success.
To listen to this webinar on-demand, go to: https://www.financialpoise.com/financial-poise-webinars/roles-responsibilities-a-primer-2020/
Directors are elected to boards to provide guidance using their expertise and experience. While boards provide governance and oversight, directors' skills could add value in other areas like facilitating strategic planning discussions. The author provides two examples where a board member effectively facilitated strategic discussions, helping the companies identify new business opportunities. However, directors must be careful not to cross into direct management, which could undermine the executive team's responsibilities. Facilitating strategy talks can benefit from a director's insider knowledge but they must maintain their oversight role and not micromanage outcomes.
This document discusses the findings of a study on the role and responsibilities of chief financial officers (CFOs). It is based on surveys and interviews with hundreds of CFOs in Europe, the Middle East, India and Africa. Some key findings include:
- CFOs play a variety of strategic roles, from directly developing company strategy to providing analysis and support to strategic decision making. About a third directly contribute to developing strategy.
- CFOs must balance their objective oversight role with increasingly taking on operational responsibilities in areas like IT and real estate.
- While CFOs spend over half their time on strategic matters, the financial crisis has forced many to refocus on financial fundamentals like cost management
The document discusses how venture boards can add value to technology startups through different stages of development. It outlines several key points:
1) Venture boards provide social, intellectual, and interpersonal capital beyond just funding. This includes access to networks, experience to help navigate challenges, and mentorship for the CEO.
2) Effective boards focus on the company's interests, have complementary skills, communicate well with the CEO, and respect each other.
3) Board roles evolve as the startup progresses from seed to commercialization to expansion. Early on, boards help recruit talent and define roles. Later, they provide strategic guidance and prepare for exits.
4) Desirable board member traits include emotional stability
The document discusses the challenges private companies face in implementing long-term incentive (LTI) plans for executives. It outlines three main options for LTI plans - no LTI plan, cash-based LTI plans, and equity-based LTI plans - and challenges associated with each. Cash-based plans face difficulties with performance measurement and goal setting. Equity-based plans create new shareholders and issues around ownership, valuation, and corporate tax status. Overall, the document argues that while LTI plans are important for attracting executive talent, properly implementing them for private companies can be complex.
The document discusses CEO transitions in venture-backed technology companies. It notes that most venture-backed companies (around two-thirds) replace their founding CEO as the company evolves from a startup to a larger organization. While founders often see themselves leading the company long-term, the skills needed change, and replacement of the CEO is a natural part of corporate evolution that should be anticipated and planned for by VCs and entrepreneurs.
Outlining the Risks Inherent in Corporate Responsibility, and Preventative Measures Directors and Officers Can Put Into Practice to Manage and Reduce These Risks
This document discusses key concepts related to organizational design including centralization, complexity, formalization, structure, and departmentalization. It defines these terms and discusses their advantages and disadvantages. The document also covers different types of organizational structures like mechanistic, organic, and matrix structures. Finally, it discusses factors that influence organizational design decisions like span of control and flexibility.
Moving The Needle on Common Drainers of EngagementOxanaGhenciu1
This document outlines eight common drainers of employee engagement and provides recommended actions to address each drainer. The eight drainers are: 1) Ineffective Team Communication 2) Organizational Silos 3) Inconsistent Management 4) Leadership Vacuum 5) Lack of Empowerment 6) Misalignment of Total Rewards 7) Unclear Mission & Values 8) Resistance to Change. For each drainer, it identifies common challenges and provides three recommended solutions/actions to help improve employee engagement in that area. The overall document is meant to serve as a playbook for organizations to identify key engagement issues and take focused action to enhance engagement.
Build a board for competitive advantageTracy Houston
This document discusses building a board that provides competitive advantage. It emphasizes recruiting directors with skills aligned to future strategic challenges, mining the collective intelligence of the board through structured processes, and ensuring alignment between the CEO and board. Building a forward-thinking board focused on the next 5-10 years, and recruiting directors with experience in areas like growth, innovation and new markets can position a company for competitive edge. Processes like defining board roles and schedules in advance, and conducting structured board evaluations that produce high-level thinking also leverage the board's wisdom. CEOs should gain the board's trust and ensure no surprises through clear communication. Compensation varies but aims to attract expertise needed. An effective board composition demonstrates a company's strategic direction.
Charles Bayless held several leadership roles in North America and globally. His roles included leading Capgemini's alliances and technologies business in North America, managing key accounts such as Ernst & Young, and leading sectors like consumer products & retail. In these roles, he worked to consolidate activities, establish performance metrics, rationalize investments, and increase coordination & results. Through his efforts, annual bookings, revenues, and profits improved significantly.
This document summarizes a report about how Chief Financial Officers are responding to increasing pressures to do more with less resources in their finance departments. It outlines some of the key pressures finance departments face, such as increased regulatory compliance from Sarbanes-Oxley that requires more time and effort, demands for greater productivity and analytical support from business units, and uncertain economic conditions that have led to layoffs. The traditional finance function is seen as inflexible and unstable due to its specialized structure and inability to quickly adapt to changing business needs. Innovative CFOs are working to make their finance departments more flexible, stable and able to serve the whole organization.
The document discusses empowering corporate boards through improving governance practices and board resources. It finds that while boards focus on oversight, CEOs want boards to provide strategic guidance. However, boards lack resources and support for their duties. The governance office, led by the corporate secretary, could evolve to better support boards. This would involve providing education, insights into best practices, and tools to help boards add more value to business strategy and performance. For this to occur, CEOs must empower governance offices with mandates, resources, and status to act as a strategic advisory body for the board.
The board survey found that boards are increasingly focused on strategy and future challenges. They spend more time on strategic issues and expect stronger financial performance than competitors. However, boards recognize a need to improve understanding of company strategy and upgrade their own skills to address future challenges. Regular board evaluations are needed to improve performance through a better understanding of strategy, stronger board dynamics, and ensuring the right mix of competencies.
Whether you are considering forming a board or want to enhance existing governance practices, understanding the role of the board and expectations of directors is an essential ingredient to successful, value-added governance in private companies. Company leaders and board directors often struggle to determine the role of the board and how to separate board responsibilities from those of ownership and management. In this webinar, the audience will learn what companies are really looking for (or should be) from their boards, and the many ways that boards contribute to private company success. We will cover the definition of a board, typical expectations of a director, board oversight vs. management responsibilities, and many other basics of board formation and operation.
Part of the webinar series: Board of Directors Boot Camp 2021.
See more at https://www.financialpoise.com/webinars/
Excellence through talent management eyad ramlawiEyad Ramlawi
This document discusses excellence through talent management. It begins by outlining four stages of excellence from firefighting to competitive advantage through operations. It emphasizes that success relies on people, culture, processes and rewards. The document then notes challenges in talent management, including a growing gap between demand and supply of talent as experienced workers retire. It defines mentoring as a voluntary relationship where experienced employees accelerate learning for less experienced employees. The document suggests CFOs can be good mentors and talent managers due to their strategic exposure and insights. It outlines Alturki's value creation strategy and capital allocation model, which focus on shareholders returns, portfolio growth, talent efficiency and capital efficiency.
Boeing is a large aerospace company founded in 1916 with over 170,000 employees worldwide. It uses a matrix organizational structure with both vertical and horizontal reporting lines. Key departments include business development, engineering, finance, and human resources. While divisions operate independently, collaboration is important given Boeing's diverse product portfolio and rapidly changing technology. The matrix structure allows for efficient sharing of resources across multiple programs.
Why SME’s Need Assistance with Governance
What are the Benefits for SME’s when they create better Governance Structures
CEO’s or Founders need to get over the control aspects of their Board
Family Businesses vs. Private Corporations
Advisory Board vs. Board of Directors
The Five Best Governance Recommendations for a Private Corporation
Discuss experiences from the field
The Challenges for Consultants when Marketing and Engaging with SMEs
Best Practises in Contracting with SME’s
The document discusses corporate governance issues related to mergers and acquisitions. It covers the roles of boards of directors in monitoring management and advising on strategy, as well as how board structure and ties can impact deal outcomes. It also addresses potential conflicts of interest between managers and shareholders when acquisition incentives are not properly structured. Performance-based and equity-based compensation are discussed as ways to better align manager and shareholder goals, though they also present risks of incentivizing volume over quality or riskier deals.
The document discusses strategies for improving board effectiveness in the 21st century. It provides evaluation tools for boards to assess their performance, including areas like strategy, CEO oversight, and focus on substantive issues. Boards are encouraged to identify development areas and replace retiring members with new directors who provide strategic skills needed for the future. The goal is to create high-performing boards that serve as a competitive advantage through strong governance and collaboration with management.
This tool was designed to help nonprofit organizations assess their organizational capacity against a number of best practices recommended by the Center for Nonprofit Resources (C4NPR.org – Toledo, OH).
Each organization will need to decide for itself what changes, if any, to make in its governance and management policies and practices based on the self-assessment.
In this age of tough competition for funding, having a strong and engaged board is the key to long-term sustainability.
• Learn from one of the world’s experts the latest trends that board directors need to know.
• Know your liabilities as a board director and review your approach to risk.
Roles & Responsibilities: A Primer (Series: Board of Directors Boot Camp 2020...Financial Poise
Private company owners, including family businesses, ESOPs, and private equity owners, often have different expectations for their boards than is common in publicly traded firms. Besides being much less encumbered by regulatory compliance, many private firms are looking for a completely different kind of engagement from directors. In companies with new boards, leaders and directors often struggle early on to determine the role of the board and how to separate board responsibilities from those of ownership and management. In this webinar, the audience will learn what companies are really looking for (or should be) from their boards, and the many ways that boards contribute to private company success.
To listen to this webinar on-demand, go to: https://www.financialpoise.com/financial-poise-webinars/roles-responsibilities-a-primer-2020/
Directors are elected to boards to provide guidance using their expertise and experience. While boards provide governance and oversight, directors' skills could add value in other areas like facilitating strategic planning discussions. The author provides two examples where a board member effectively facilitated strategic discussions, helping the companies identify new business opportunities. However, directors must be careful not to cross into direct management, which could undermine the executive team's responsibilities. Facilitating strategy talks can benefit from a director's insider knowledge but they must maintain their oversight role and not micromanage outcomes.
This document discusses the findings of a study on the role and responsibilities of chief financial officers (CFOs). It is based on surveys and interviews with hundreds of CFOs in Europe, the Middle East, India and Africa. Some key findings include:
- CFOs play a variety of strategic roles, from directly developing company strategy to providing analysis and support to strategic decision making. About a third directly contribute to developing strategy.
- CFOs must balance their objective oversight role with increasingly taking on operational responsibilities in areas like IT and real estate.
- While CFOs spend over half their time on strategic matters, the financial crisis has forced many to refocus on financial fundamentals like cost management
The document discusses how venture boards can add value to technology startups through different stages of development. It outlines several key points:
1) Venture boards provide social, intellectual, and interpersonal capital beyond just funding. This includes access to networks, experience to help navigate challenges, and mentorship for the CEO.
2) Effective boards focus on the company's interests, have complementary skills, communicate well with the CEO, and respect each other.
3) Board roles evolve as the startup progresses from seed to commercialization to expansion. Early on, boards help recruit talent and define roles. Later, they provide strategic guidance and prepare for exits.
4) Desirable board member traits include emotional stability
The document discusses the challenges private companies face in implementing long-term incentive (LTI) plans for executives. It outlines three main options for LTI plans - no LTI plan, cash-based LTI plans, and equity-based LTI plans - and challenges associated with each. Cash-based plans face difficulties with performance measurement and goal setting. Equity-based plans create new shareholders and issues around ownership, valuation, and corporate tax status. Overall, the document argues that while LTI plans are important for attracting executive talent, properly implementing them for private companies can be complex.
The document discusses CEO transitions in venture-backed technology companies. It notes that most venture-backed companies (around two-thirds) replace their founding CEO as the company evolves from a startup to a larger organization. While founders often see themselves leading the company long-term, the skills needed change, and replacement of the CEO is a natural part of corporate evolution that should be anticipated and planned for by VCs and entrepreneurs.
Outlining the Risks Inherent in Corporate Responsibility, and Preventative Measures Directors and Officers Can Put Into Practice to Manage and Reduce These Risks
This document discusses key concepts related to organizational design including centralization, complexity, formalization, structure, and departmentalization. It defines these terms and discusses their advantages and disadvantages. The document also covers different types of organizational structures like mechanistic, organic, and matrix structures. Finally, it discusses factors that influence organizational design decisions like span of control and flexibility.
Moving The Needle on Common Drainers of EngagementOxanaGhenciu1
This document outlines eight common drainers of employee engagement and provides recommended actions to address each drainer. The eight drainers are: 1) Ineffective Team Communication 2) Organizational Silos 3) Inconsistent Management 4) Leadership Vacuum 5) Lack of Empowerment 6) Misalignment of Total Rewards 7) Unclear Mission & Values 8) Resistance to Change. For each drainer, it identifies common challenges and provides three recommended solutions/actions to help improve employee engagement in that area. The overall document is meant to serve as a playbook for organizations to identify key engagement issues and take focused action to enhance engagement.
Build a board for competitive advantageTracy Houston
This document discusses building a board that provides competitive advantage. It emphasizes recruiting directors with skills aligned to future strategic challenges, mining the collective intelligence of the board through structured processes, and ensuring alignment between the CEO and board. Building a forward-thinking board focused on the next 5-10 years, and recruiting directors with experience in areas like growth, innovation and new markets can position a company for competitive edge. Processes like defining board roles and schedules in advance, and conducting structured board evaluations that produce high-level thinking also leverage the board's wisdom. CEOs should gain the board's trust and ensure no surprises through clear communication. Compensation varies but aims to attract expertise needed. An effective board composition demonstrates a company's strategic direction.
Charles Bayless held several leadership roles in North America and globally. His roles included leading Capgemini's alliances and technologies business in North America, managing key accounts such as Ernst & Young, and leading sectors like consumer products & retail. In these roles, he worked to consolidate activities, establish performance metrics, rationalize investments, and increase coordination & results. Through his efforts, annual bookings, revenues, and profits improved significantly.
This document summarizes a report about how Chief Financial Officers are responding to increasing pressures to do more with less resources in their finance departments. It outlines some of the key pressures finance departments face, such as increased regulatory compliance from Sarbanes-Oxley that requires more time and effort, demands for greater productivity and analytical support from business units, and uncertain economic conditions that have led to layoffs. The traditional finance function is seen as inflexible and unstable due to its specialized structure and inability to quickly adapt to changing business needs. Innovative CFOs are working to make their finance departments more flexible, stable and able to serve the whole organization.
The document discusses empowering corporate boards through improving governance practices and board resources. It finds that while boards focus on oversight, CEOs want boards to provide strategic guidance. However, boards lack resources and support for their duties. The governance office, led by the corporate secretary, could evolve to better support boards. This would involve providing education, insights into best practices, and tools to help boards add more value to business strategy and performance. For this to occur, CEOs must empower governance offices with mandates, resources, and status to act as a strategic advisory body for the board.
The board survey found that boards are increasingly focused on strategy and future challenges. They spend more time on strategic issues and expect stronger financial performance than competitors. However, boards recognize a need to improve understanding of company strategy and upgrade their own skills to address future challenges. Regular board evaluations are needed to improve performance through a better understanding of strategy, stronger board dynamics, and ensuring the right mix of competencies.
Whether you are considering forming a board or want to enhance existing governance practices, understanding the role of the board and expectations of directors is an essential ingredient to successful, value-added governance in private companies. Company leaders and board directors often struggle to determine the role of the board and how to separate board responsibilities from those of ownership and management. In this webinar, the audience will learn what companies are really looking for (or should be) from their boards, and the many ways that boards contribute to private company success. We will cover the definition of a board, typical expectations of a director, board oversight vs. management responsibilities, and many other basics of board formation and operation.
Part of the webinar series: Board of Directors Boot Camp 2021.
See more at https://www.financialpoise.com/webinars/
Excellence through talent management eyad ramlawiEyad Ramlawi
This document discusses excellence through talent management. It begins by outlining four stages of excellence from firefighting to competitive advantage through operations. It emphasizes that success relies on people, culture, processes and rewards. The document then notes challenges in talent management, including a growing gap between demand and supply of talent as experienced workers retire. It defines mentoring as a voluntary relationship where experienced employees accelerate learning for less experienced employees. The document suggests CFOs can be good mentors and talent managers due to their strategic exposure and insights. It outlines Alturki's value creation strategy and capital allocation model, which focus on shareholders returns, portfolio growth, talent efficiency and capital efficiency.
Boeing is a large aerospace company founded in 1916 with over 170,000 employees worldwide. It uses a matrix organizational structure with both vertical and horizontal reporting lines. Key departments include business development, engineering, finance, and human resources. While divisions operate independently, collaboration is important given Boeing's diverse product portfolio and rapidly changing technology. The matrix structure allows for efficient sharing of resources across multiple programs.
Why SME’s Need Assistance with Governance
What are the Benefits for SME’s when they create better Governance Structures
CEO’s or Founders need to get over the control aspects of their Board
Family Businesses vs. Private Corporations
Advisory Board vs. Board of Directors
The Five Best Governance Recommendations for a Private Corporation
Discuss experiences from the field
The Challenges for Consultants when Marketing and Engaging with SMEs
Best Practises in Contracting with SME’s
The document discusses corporate governance issues related to mergers and acquisitions. It covers the roles of boards of directors in monitoring management and advising on strategy, as well as how board structure and ties can impact deal outcomes. It also addresses potential conflicts of interest between managers and shareholders when acquisition incentives are not properly structured. Performance-based and equity-based compensation are discussed as ways to better align manager and shareholder goals, though they also present risks of incentivizing volume over quality or riskier deals.
The Effective Board (Series: Board of Directors Boot Camp)Financial Poise
Running a productive and energized board meeting takes time and effort. Harnessing the expertise of board members while meeting the needs of the company is a balance that must be continually recalibrated by the board and company leadership. In this session, we will cover the process to achieve effective board practices ranging from board meeting formulation and preparation, board meeting execution and facilitation, and post-board meeting follow-up. The social aspects of a board will also be discussed – how to create engagement, teamwork, and camaraderie among board members to maximize their contribution. With boards charged with a company’s most important strategic matters, no company can afford to waste valuable meeting time.
To view the accompanying webinar, go to: https://www.financialpoise.com/financial-poise-webinars/the-effective-board-2021/
The document discusses the important relationship between the board of directors and general manager in a cooperative and provides guidance to maintain a balanced relationship. It outlines the key roles and responsibilities of each party, including that the board defines objectives and policies while the manager implements them. It also identifies common areas of friction and provides suggestions for both parties to respect each other's roles and authority to ensure smooth and effective cooperation.
Do you believe it is possible to have effective overall management i.pdfsolimankellymattwe60
Do you believe it is possible to have effective overall management in a decentralized company?
What are the advantages and disadvantages of decentralization? Does a company getting so large
that it has to decentralize play a part in the gap between financial goals and actual ones? Please
give personal opinion, experience and cite information gathered through research of existing
companies’ experiences.
Solution
A. Yes decentralisation enhances effective overall management.
B. Advantages of decentralisation are as follows:
1. There is effecient and quick and quick decision making since chain for approval is short and
decisions are taken considering operational level challenges.
2. There is ease in expansion since chief executive director and team can focus on expansion
strategies.
3. It empower employees to make active participation and focus on companies growth as well.
4. It prepares employees and managers for emergency decision making where Business Owner
might not be available..
Disadvantages:
1. Each department becomes self centered focusing only on their own growth and not company.
2. Decentralization increases the problem of co-ordination among the various units.
3. It increases the administrative expenses because highly-paid managers have to be appointed.
4. There shall not be uniformity in policies and actions, since each manager will form his own
genius in designing them.
C. Decentralisation doesn’t part a gap between financial goals and actual ones provided profits
from each decentralised department are reviewed quarterly.
D. Johnson and Johnson is a decentralised company and doing well..
Building exceptional boards of directors in growth stage technology businesse...Dave Litwiller
This document discusses building an effective board of directors for growth stage technology companies. It outlines three key aspects:
1) Choosing the right people for the board who are voracious learners, prepared, dedicate sufficient time, are competitively driven but balanced, optimistic yet skeptical, and tolerant of risk.
2) Advancing and renewing the board over time by developing a pipeline of talent, balancing CEO and outside director nominations, avoiding path dependency, conducting thorough reference checks, and finding independent thinkers.
3) Identifying underperforming directors who are sycophants, narrow-minded, unprepared, or have strong biases that hinder their effectiveness. Maintaining a high-performing
The success of the board relies on the individual contribution, expertise, and behavior of its directors. During this program, we talk about the role of the director, the critical attributes of a strong director, the role of the Board and Committee chairs, and common opportunities and challenges for boards and board members. Through sharing examples from our expert group of panelists, we look at what is expected of directors from ownership and management to help highly effective directors meet or exceed those expectations and make a meaningful contribution to the company’s success.
Part of the webinar series:
BOARD OF DIRECTORS BOOT CAMP 2022
See more at https://www.financialpoise.com/webinars/
This document discusses succession planning and governance for family businesses. It addresses the risks family businesses face, such as inadequate management or lack of a succession plan. Key issues include balancing family and business interests and resolving disputes. The document provides steps to take such as establishing a board of directors and governance policies to define roles, compensation, and conflict resolution. It also recommends developing a formal succession plan to select competent future leaders whether family or non-family. Overall, the document aims to help family businesses plan for generational transitions and long-term success.
The success of the board relies on the individual contribution, expertise, and behavior of its directors. During this program, we talk about the role of the director, the critical attributes of a strong director, the role of the Board and Committee chairs, and common opportunities and challenges for boards and board members. Through sharing examples from our expert group of panelists, we look at what is expected of directors from ownership and management to help highly effective directors meet or exceed those expectations and make a meaningful contribution to the company’s success.
Part of the webinar series: Board of Directors Boot Camp 2021.
See more at https://www.financialpoise.com/webinars/
This session covered:
- What do we mean by governance?
- What does it mean for NEDs?
- Main points from ‘Boardroom Behaviours’ and ‘Board - Effectiveness Guidance’ reports
- Good (and bad) governance – can it deliver value/prevent loss?
- Benefits of perceptive governance
This session covers the following:
- What do we mean by governance?
- What does it mean for NEDs?
- Main points from ‘Boardroom Behaviours’ and ‘Board Effectiveness Guidance’ reports
- Good (and bad) governance –can it deliver value/prevent loss?
- Benefits of perceptive governance
The family business analyzed is a medium-sized enterprise with low family and business complexity owned by a father with four sons as employees. It follows a "Captain" model with informal management. Recommendations include developing a strategic plan, encouraging innovation, formalizing roles and succession planning, and establishing boards to coordinate the family and business as complexity increases. The business is predicted to evolve into a more professional model by developing future generations' competencies through training and experience.
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1. Considering that family owned businesses (FOBs) are such critical engines of social and
economic development in the MENA region, the fact that less than a third survive the transition
from the first to the second generation is a critical concern. The root cause of many of these
FOB failures can be traced back to ineffective governance. While governance covers a broad
remit, the central role of the Board will be our focus. Boards in the region face seven typical
challenges that limit their ability to ensure trans-generational survival. Critical actions to address
these challenges will also be discussed.
Challenge #1: The Board Role – Family First or Business First?
Many FOB Boards have informally evolved over time as their businesses have scaled and as
younger family members have grown to take on leadership positions. Often there is no formal
communication for what the Board is there to do or any structured training for what the
individual Directors role and responsibilities are. Instead, new family Directors learn “on-the-
job” by watching how older siblings on the Board operate. To further complicate matters, FOB
Boards are faced by a unique challenge: whether to put family first or the business first. What
happens when, for example, the family wants bigger dividends but the business needs greater
funding for operations and growth? How does the Board respond to conflicts of interest – for
example, if a family member starts a competing business? Historically, clarity on the Boards
role, responsibilities and accountabilities were not necessary as the Board had time to be all
things to all stakeholders.
However, as the complexity of business operations has grown – both in terms of industry
participation, geographic footprint and competitive dynamics – and as the expectations of a
growing family has also increased, there is no way for a FOB Board to be effective without the
clarity of purpose and the focus of objectives. To address these complexities, FOBs are
increasingly segregating family governance from business governance.
2. Figure: Transition to a Modern FOB Governance Structure
Critical Actions:
1. Deploy segregated, but aligned, family and corporate governance structures
2. Draft and socialize the Board mandate
3. Detail and align on Directors roles and responsibilities
4. Provide structured and formal training for Board and individual directors
5. Utilize mentors for younger Board members
Challenge #2: Incorrect Board Composition
Many FOB Boards are comprised solely of family members who have grown up within – and
along with – their businesses. As their businesses have enjoyed success, they have taken on
greater leadership positions culminating in a role on the Board. While this not only ensures a
trusted individual with a vested interest in the long-term success of the business, it also
provides someone with a proven and intimate operational knowledge. A critical downside
however, is a Board that is skewed in its background, experience and mindset. The table below
illustrates the typical breadth a Board would need to have. A depth developed from within the
FOB may not translate into a breadth of experiences, mindset and skills required for a rapidly
dynamic business environment.
Figure: Typical Experience, Mindset and Skills Required for Board
3. An additional complication for FOBs is handling the transition from a family-only board to one
that includes independent Directors. Ensuring the exiting family Directors have an alternative
role – such as a Director on the Investment or HR committee or on a family entity such as the
Family foundation – is critical for maintaining commitment and family unity.
Key Actions:
1. Define the required Board composition based on foreseeable business challenges
2. Determine need and timeline for Independent Board members
3. Define selection criteria and process for family appointees to Board
4. Define selection criteria and process for independent appointees to Board
5. Find new roles for exiting Board members to retain motivation & family unity
5. Detail a process for ongoing Board succession and renewal
Challenge #3: Ineffective Board Dynamics
A Board has limited time to get behind the financials and truly understand the critical drivers of
business value and to effectively challenge management in order to make insightful and
impactful decisions. This requires each Board member to play their role and bring their specific
attributes to drive a productive dialogue. Ineffective board dynamics – both between Board
members and between the Board and management – severely limit value add impact.
Poor Board dynamics in regional FOBs typically stem from common behaviors:
§ A lack of trust based on poor transparency, past failures or lack of accountability,
resulting in aggressive dialogue with management rather than insightful challenge
§ cultural norms of avoiding potential conflict, especially within the family hierarchy
§ Weakened commitment as real discussions held in privacy of majlis and only rubber
stamped at Board or due to a disconnect between family values and business practices
§ An abdication of accountability because the Chairman doesn’t enable or encourage
effective dialogue
§ Poor results driven by conflicting individual and business agendas that stay below the
surface during the Board but influence decision-making in the day-to-day operations
4. Effective Board dynamics are critical – as with any team, the better its participants work together
and are able to leverage their specific skills and experiences, the better the impact on business
outcomes. It is the Chairman’s responsibility to ensure authentic and constructive debate that
ensures clarity, accountability and, ultimately, results.
Key Actions:
1. Align Board objectives and behaviors with Family values and expectations
2. Establish formalized Director onboarding program
3. Ensure Board development has regular slot on Board agenda
4. Institute annual independent and peer assessment of Board performance
5. Deploy annual independent and peer assessment of Director performance
Challenge #4: Wrong Focus of Board Time & Discussion
As each Board meeting is an expensive use of senior executive time, it is imperative that this
time is used efficiently and for optimal business impact. Typically, as FOB Directors have
evolved from hands-on roles from within the family business, the focus of the board can
become very operational and granular. This can result in too much time and attention being
given to the most recent operational issue rather than more critical commercial or strategic
issues. Also, many FOBs will revert Board meetings to a review of each business units’
financials. Going line by line through a profit and loss statement offer little real value add and is
akin to driving a car using only the rear-view mirror – in the middle of the night! FOB Boards
may feel they can transition away from a predominantly monitoring and control function only
when management improve transparency and eliminate typical year end “surprises.” However,
this will only result in an inwardly focus that is too paralyzed to exploit market opportunities.
Figure: FOB Board Focus
An effective Board must balance not only and internal operational with an external market
perspective, but also understanding past performance with future opportunities. The Board
must focus on its strategic functions while ensuring other structures – such as the Executive
Committee or Audit Committee – enforce monitoring and control functions.
5. Key Actions:
1. Chairman to align with CEO/ExCom on critical discussion topics for the Board
2. Circulate detailed agenda for each Board
3. Develop standard reporting template with common KPIs & section for discussion topics
Challenge #5: Lack of Preparation
The responsibility for productive Board meetings lies with the Chairman whose primary
function is to ensure the right agenda is set, dialogue in the Board is focused, rigorous and
constructive, and accountability for action is established. However, this relies on Board
members ensuring they are up-to-date on the agenda topics and on management to provide
insight and transparency. If a common fact base of issues is understood prior to the meeting,
Board time can be more effectively spent on assessing options and aligning with management
on the optimal way forward. Without this understanding, Board time will, at best, be wasted on
bringing Directors up to the same level or, at worst, end with frustrating indecision that delays
progress and action.
Figure: Sample Board Director Time Allocation
As the saying goes “proper planning and preparation prevents painfully poor performance”
and nowhere is this more apt than for effective Board meetings. With Board meeting dates for
the year usually scheduled in advance, Directors should easily be able to set aside regular
blocks of time to review materials, prepare questions and submit requests for additional
information or clarifications. This should really be the base expectation of any credible Director
whether they are family members or independent.
Key Actions:
1. Set annual Board dates and communicate agenda focus for each session
2. Send Board papers 7-10 working days in advance
3. Evaluate Board reporting packs for transparency and insight
4. Utilise tools such as Boardpad for electronic store of latest reports and offline voting
6. Challenge #6: Reluctance to Make Difficult Decisions
Decision making in regional FOBs can be very complex. The benefits of the FOB model – a
patient long-term approach to the deployment of capital together with an entrepreneurial
mindset – drives a different decision-making approach to a Board driven by a short term focus
on quarterly earnings. This approach has resulted in decisions to enter new industries or
geographies driven as much by family reasons as commercial. A new business can be born
from the passion of one of the family members and, if they are able to convince the patriarch,
the new venture can easily raise funding. As the rationale to enter a new sector is often not
wholly commercial, the decision for FOBs to exit out of businesses – many of which may have
the emotional attachment of been started by parents or even grand-parents – is also not just
driven by numbers. Consequently, a FOB can carry loss making entities for years and years.
Every Board the hockey stick turnaround (a short period of continuing decline followed by a
sudden and prolonged upturn in performance) is promised and unfortunately almost every
subsequent Board the hockey stick is revised further out.
Figure: Evaluating the FOB Operating Asset Portfolio
An effective Board will not hesitate to make dispassionate decisions driven by cold hard facts.
Family harmony and unity is not best served by turning a blind eye to underperformance of
assets with emotional attachment. It is best served by maintaining a healthy portfolio of cash
generating businesses that will serve the social and economic needs of family members. By
taking a strategic view, the Board can maximize shareholder value by addressing assets before
they enter the Business Model: Broken & Financial Performance: Off-Track quadrant.
Key Actions:
1. Implement a commonly understood performance management model (as above)
2. Conduct detailed portfolio review every two to three years
3. Supplement portfolio review with annual refresh of key assumptions
4. Establish Corporate Development function to execute for portfolio decisions
5. Deploy a robust investment, M&A and divestiture process
7. Challenge #7: Inadequate Follow Up
A common complaint of FOB Boards is the lack of certainty that decisions made at the Board
will flow though to management actions in day to day operations. Board frustration is palpable
when management does not reflect the urgency or priority the Board expects. Even with the
best will in the world, the Board cannot be everywhere and know everything that is happening
in its businesses. Equally, the company secretary is often nothing more than a note taker who
checks-in just before Board papers are due for an update that it cut-and-pasted into the pack.
This can lead to a breakdown in trust which is only compounded by micro-management that
only creates a burdensome bottleneck that chokes decision making and paralyzes the
businesses.
Establishing a clear hierarchy of support structures under the Board is essential for driving
follow through and execution. The Board must provide clear direction and oversight but must
also give accountability to the relevant support structure. The Corporate Centre – which is often
nothing more than a financial reporting and administration function in many FOBs – needs to
step up as this group will carry a significant role as the execution arm of the Board.
Key Actions:
1. Institute functional committees to develop detailed recommendations for the Board
2. Deploy industry specialist committees to provide sector insight and validation
3. Establish controlled delegation of authority to support committees (i.e. ExCom)
4. Enable corporate centre to facilitate execution of key initiatives
5. Employ full-time company secretary to proactively follow up on Board actions
Conclusion
All FOBs harbor the dream of translating the success of the patriarch into a truly sustainable
trans-generational business. The benefits of the FOB model – an entrepreneurial mindset
coupled with a patient approach to deploying capital – can only become sustainable by
ensuring the appropriate discipline and governance is instituted. As the Board has a central
role to play in this, it must dispatch the typical challenges that create inertia and friction in the
execution of its objective: facilitate effective, entrepreneurial and prudent management that
can deliver the long-term success of the company (Institute of Chartered Accountants of
England & Wales)
8. About the Author: Sohail Gondal, Founder & Managing Partner
Sohail has a proven track record of delivering shareholder value for principal investors through active management of a
portfolio of companies. Over the course of his professional career, Sohail has built new businesses as a founder and early stage
Director, delivered operational and bottom line improvements to companies in Family Office portfolios in interim positions,
restructured or turned around businesses as a CEO and served Boards and CEOs of large corporations as a strategic advisor.
At home in a broad number of industries, Sohail has a deeper understanding, from a strategic, investment and operational
leadership perspective, across sectors including retail, technology, telecoms, media, education, financial services and private
equity. Sohail holds an MBA from Columbia Business School, a Masters in Industrial Engineering from the London School of
Economics and a bachelors degree with double major in Accounting & Computer Science from the University of Liverpool.