Global Governance Advisors

Risky Business & Board Oversight

Posted by Brad Kelly on Oct 29, 2018 9:00:00 AM

Good board members ask good questions.

Risk exists in every organization and it is a board member’s role to probe until they are convinced that management is not incurring any undue risk or risk that is outside of the boundaries they helped to establish. Board members must be cognizant of the lengthy list of risks that exist. Be it:

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Topics: board of directors, Corporate Governance, Risk Management

Skills Matrix - An Essential Tool for Improving Your Board Composition

Posted by Peter Landers on Oct 22, 2018 9:00:00 AM

An essential question asked by board members is how can we improve our performance? While there are many possible answers to solve this riddle, making sure your board composition is set-up as intended is key. An increasingly prevalent tool used by boards in evaluating their board’s composition is the Board Skills Matrix. According to a 2017 study by Equilar, 307 U.S. and Canadian public companies disclosed the use of a Skills Matrix within their proxy statement. A Board Skills Matrix strengthens an organization’s overall governance practices by identifying the current skills, knowledge, experience and capabilities of current board members. The matrix is a relatively simple table that lists all board members along the top with a board’s view of the essential skills and experience required by the board to be most effective.

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Topics: Board Composition, board of directors, GGA

D&O Questionnaires: The Importance of Pre-Population

Posted by Linaeya Horn-Muller on Oct 15, 2018 9:00:00 AM

You delicately bring your knuckles to your face to satiate the itching sensation tickling your cornea. The kind of itch that only materializes after countless hours of forcing your eyes to be glued to the department issued Commodore 64. More specifically, glued to your annual Directors & Officers (D&O) questionnaire template. You’ve been assiduously working at finalizing this year’s survey, because that is what is required of the board administrator. You’re torn because you fully understand the necessity of this tedious labor, but your mind can’t help but wander to a world where D&O questionnaires are pre-populated.

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Topics: D&O Questionnaires, GGA

The Importance of Understanding Proxy Voting Guidelines

Posted by Peter Landers on Sep 24, 2018 9:00:00 AM

Autumn brings more than crimson leaves, pumpkin spice lattes, and the resurgence of candy corn on the shelves of your local corner store. The start of fall is also a glaring reminder that proxy voting guideline season is upon us.

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Topics: Proxy Voting, ISS, Glass Lewis

How to Chair a Board Meeting

Posted by Linaeya Horn-Muller on Sep 17, 2018 9:00:00 AM

Welcome. Please everyone, take your seats.

You’re standing at the front of the room, ready to nosedive into the fifteen agenda items scheduled for the next 2.5 hours. There’s never enough time in the day, let alone allocated for that quarterly board meeting. Nevertheless, you’re ready. Thanks to an über knack for preparation, your watch and smart phone have already been synced to the antiquated clock ticking away at the back of the room. Hell-bent on keeping everyone focused and on schedule, nothing can stop you now.  

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Topics: Board Chair, Board Meeting, Robert's Rules of Order

Strategy Mapping & Succession Planning

Posted by Brad Kelly on Sep 10, 2018 10:00:00 AM

Fifty years. That's how long it has been since Japanese manufacturers introduced the world to “just-in-time” production methods. Toyota is credited as the initial birthplace of this methodology, which is aimed primarily at reducing flow times within production systems as well as response times from suppliers and customers. A huge aspect of this process is understanding production schedules and timelines and making sure that inputs, resources and parts are supplied and readily available. 

One of the many responsibilities for Boards of Directors is to hire and oversee the compensation and performance of the top executive within their organization. As well, Boards are responsible for establishing the organization's long-term strategic direction. Embracing the “just-in-time” approach and applying it to human capital management will allow Boards to anticipate what executive skills and characteristics are needed, at each stage of their strategic plans. 

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Topics: CEO Succession, Executive Compensation, GGA

Learning From Past Mistakes: Tips to Avoid a Proxy Fight

Posted by Peter Landers on Aug 27, 2018 10:00:00 AM

All publicly-traded companies face the risk of a proxy fight with one or more of its current shareholders. In a nutshell, a proxy fight is a situation where two corporate factions (typically the Board/Executive Team vs. an activist shareholder or a group of company shareholders) fight for votes from remaining shareholders in order to effect change in a particular area of governance in the company.

This issue often occurs when a new slate of board members is proposed to replace a group of existing board members by an activist shareholder or group. The new slate of board members are generally individuals who are receptive to the activist shareholder’s views on how to change the company while the existing board members are often resistant to the activist shareholder’s views. Common areas of disagreement that can lead to a proxy fight include: future company strategy, executive compensation, company performance or whether a sale of the company or continuing as a stand-alone company is in the best interest of shareholders.

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Topics: Proxy Fight, GGA, Shareholder Activism

Robert's Rules of Order Meets the Digital Boardroom

Posted by Linaeya Horn-Muller on Aug 20, 2018 10:00:00 AM

Picture this: an annual general meeting with no agenda. There’s no board chair or other administrator present to facilitate the meeting. What happens next? Can the board members stay organized, efficient and effectively discuss every necessary item? No, they can't.

The inability to have successful meetings with no set procedures led to the creation of Robert’s Rules of Order. Simply put, Robert’s Rules of Order is just another term for parliamentary procedure. It’s a widely accepted standard for conducting meetings and efficiently making decisions.

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Topics: Robert's Rules of Order, Digital Boardroom, GGA

The Secret to Successful CEO Succession Every Board Should Know

Posted by Paul Gryglewicz on Aug 15, 2018 10:00:00 AM

“Tim Hortons is hiring -- Canada's No. 1 coffee chain is looking for a new leader after the abrupt departure of its CEO.

The company announced Wednesday that Don Schroeder, 65, no longer serves as president and CEO after three years at the helm and two decades as an employee.” 1 [i]said in a 2015 press release.

The board’s number one responsibility is CEO succession planning, yet so many boards ignore the criticality of proactively discussing the senior leadership succession plan.  While industrial psychologist researchers have identified that some of the most successful CEO successors are those that have been hired from within,  most organizations do not have the depth of talent necessary to identify the new captain of the team. 

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Topics: CEO Succession, GGA, board of directors

Assessing Governance Effectiveness in Pensions

Posted by Brad Kelly on Aug 13, 2018 10:00:00 AM

In the compensation and governance world, it is commonly known that shareholders are relatively quiet when companies are successful and driving returns. However, when things go south, shareholders question more and demand to know how corporate governance can be improved. These demands are accentuated for public pensions. When pension funds are performing well, there is little pressure, but after weathering through the past two recessions and, for some, experiencing co-payment holidays, under-funding status levels are understandably correlated to the increased level of pressure they are experiencing today.

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Topics: Pension Governance, GGA, Corporate Governance