Category Archives: Studies

Drag your corporate boards into the digital age

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The Globe And Mail published the Monday, Feb. 25 2013 a new article about Leading Boards !!! By Ivor Tossell.

ipad-user

When corporate directors need to read up on company affairs in the run up to a board meeting, they can find themselves sitting on telephone books’ worth of paperwork. Never mind reading it – it also needs to be delivered and securely disposed of afterwards. Enter Leading Boards – content management software tailored to help boards of directors and built for the age of the iPad.

The goal is better governance, says Jean-Marc Félio, the company’s president: A more-informed board will make better decisions, and the sooner new directors can be brought up to speed on a board’s decision-making history, the sooner they’ll step up and offer effective guidance.

“Directors don’t have access to information. You have a new director coming in, it will take three to six months before they’re up to date,” he says. “Giving them access to their archives is already a big change.”

Leading Boards acts as both a security-minded information repository and a decision-making hub. Many of its features, which include access to old minutes and files, the ability to search documents by content and collaborative document-editing, are available through its regular web interface. But Mr. Félio puts his firm’s emphasis on its iPad app, which takes advantage of the touch interface to offer document-management tricks such as highlights and annotations. (In the interests of security, annotations are purged after a meeting has run its course, and documents returned to their original state.)

In addition to offering full access for board members, the software can act as a venue to create a virtual meeting space that puts specific users together with just the documents they need to see; anxious stakeholders, for instance, can be invited to a session with two or three directors, and just the relevant documents from the archives. Alternately, a suitor interested in buying a stake in the company could be given an account on the system allowing access for due diligence.

It also tackles the decision-making process itself, letting boards create structured debates, in which a question is mooted and members can add arguments into ‘pro’ and ‘con’ lists. After the meeting, the decision-making process is expunged, leaving only its result for the record.

The six-person startup’s software is used by about 60 companies in Canada and beyond. Mr. Félio says its touch-based capabilities are important in speeding adoption among board members – not always the youngest members of an organization, nor the most eager to embrace technology. The company experimented with buying small computers for clients, but found that, regardless of the training Leading Boards offers, the iPad was far more intuitive.

“There is one old board member who called and said ‘I don’t need your training any more. My five-year old granddaughter taught me.’”

See the article: Montreal startup drags corporate boards into the digital age

Peter Hadekel: Montreal startup develops governance tool

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This article come from Thegazette, write by Peter Hadekel

MONTREAL — Better corporate governance has become a top objective of just about every publicly traded company. Boards of directors are more scrutinized than ever before by analysts, shareholders and regulators.

Amid an outbreak of corporate fraud over the last decade, legislative changes have placed a lot more responsibility and accountability on the shoulders of directors.

Now, a small Montreal startup has identified a way to help boards work more efficiently and with greater transparency

The business, known as Leading Boards, started four years ago under entrepreneur Jean-Marc Félio after he had served as director of a non-profit organization.

At the time, the organization needed to distribute a number of documents to directors and Félio realized that a digital system for sharing and archiving documents would make sense.

He spent a couple of years developing a software program with an information-technology specialist and then took eight months testing the product with a range of small, medium and large enterprises.

At the end of 2010, Leading Boards began to commercialize the system and has signed 60 clients so far — many of them either publicly traded firms or non-profit institutions.

The system is a secure “board portal” that reduces or eliminates printouts and multiple copies of documents. It can eliminate courier service costs and reduce meeting preparation time, Félio says.

“Just look at the amount of paper that is sent to the board of a large company — it’s the equivalent of about two telephone books every month.”

Directors often find they need to consult a corporate document of some kind only to find that it’s not at hand and they need to have it sent. They get another set of the same binders when they come to a board meeting.

That wastes even more money. Document costs can run to more than $15,000 a year for a single committee of seven directors.

Leading Boards puts together a complete archive of documents ranging from agendas and minutes of meetings to financial statements, directors’ committee reports and corporate policy statements.

The system has been developed with the practical needs of directors in mind. “You get powerful search engines, information sharing, quick, easy access,” Félio says. Agendas are interactive and directors can write personal or shared notes in a “Post-it” style.

Perhaps the biggest gain is increased transparency. The system can be set up to allow different levels of access, whether by shareholders, regulators or fellow directors.

It’s best suited for iPads and tablets, he says.

Félio worked in film and television and taught communications at the university level before taking the entrepreneurial plunge. He financed the startup out of his own pocket but recently got an additional investment from an angel investor to help him develop the market.

Leading Boards is not the only player in this game. Two other software providers — BoardBook and BoardVantage — service the market for Fortune 500 companies in the U.S.

But Félio hopes to capitalize on the market in Canada for smaller, listed companies that need to save time and money on governance and compliance.

Among clients that have recently signed up are two publicly traded mining companies in Quebec: Argex Titane Inc. and St-Georges Platinum & Base Metal Ltd. Both companies said they expect the software package will wind up improving board governance.

The trilingual nature of the software package, offering English, French and Spanish capabilities, will open up new avenues of growth in Europe and Latin America, as well the Middle East and North Africa, Félio believes. He is already in discussions with a firm about a joint venture to sell the product in France.

The company hosts the web-based system for clients who pay an annual service fee. It has about half a million dollars in annual revenue so far and six employees, expecting to double in size every year.

Among the non-profit or public organizations using the system is Montreal’s Palais des congrès, he said. Expressions of interest have come from a number of other provincial agencies.

Ten things for boards of directors to avoid

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Here we will see ten things that a boards of directors can avoid to improve their performance.

 

 1. Avoid presentation overload

Presentations should not dominate board meetings. If your board meetings consist of a scripted agenda packed with one presentation after another, there may not be sufficient time for substantive discussions. The majority of board meetings should be focused on candid dialogue about the critical strategic issues facing the company. Management should feel confident that the board will read these pre-meeting materials, and the board must commit an adequate amount of time in advance of the meeting to do so. Board portal can help administrators to be prepared before the meeting.

2. Avoid understating the importance of compliance

There is no room for a culture of complacency when it comes to compliance with laws and regulations.

3. Avoid postponing the CEO succession discussion

CEO succession planning is one of the primary roles of the board. During this time of rebuilding and prior to the implementation of new regulations, boards should assess where time is being spent and perhaps redirect focus on succession.

It is important to note that the succession planning process is continual and doesn’t end when a new CEO is selected.

4. Avoid the trap of homogeneity

The topic of board composition and having the “right” people on the board continues to receive much attention. The board needs to assess whether this new mix translates into a positive and productive board dynamic. Boards should take a closer look at the expertise, experience and other qualities of each member to ensure the board that can provide the right expertise. Diversity of thought provides the perspectives needed to effectively address critical topics, which can contribute to greater productivity and ultimately a stronger board.

5. Avoid excessive short-term focus

Recent history offers many examples of modern corporate entities managing to reach short-term results at the expense of long-term prosperity. The board can demonstrate its leadership by being the voice of reason and openly discussing the sustainability of strategic initiatives. This can result in a well-governed company with a greater chance of achieving long-term, sustainable success.

6. Avoid approvals if you don’t understand the issue

Complex issues can have significant implications for the survival of an organization. It is up to directors to make sure that they understand issues that can alter the future of an enterprise before a vote is taken. If you don’t adequately understand the issue, ask for more education from management or external experts. True consensus results from a thorough debate and airing of the issues before the board, resulting in a more informed vote by directors.

7. Avoid discounting the value of experience

As a director, it is important to recognize the value that your experience can bring to the issues at hand. It is bringing together the diverse skills and experiences of each director to lead the company through challenges. Directors can provide greater insight by being ‘situationally aware’ when evaluating events and courses of action to take.

8. Avoid stepping over the line into management’s role

A board that makes management decisions will find it difficult to hold the CEO accountable for the outcome. A director’s role is to oversee the efforts of management rather than stepping into management’s shoes. Directors must make a concentrated effort to ensure that they have clarity on management’s role, which is to operate the company.

9. Avoid ignoring shareholders

A company’s shareholders are among the most important and potentially vocal constituents of the enterprise. Concerns can sometimes be addressed by providing shareholders an audience with the board to air their concerns.

10. Avoid a bias to risk aversion

With the recent focus on excessive risk-taking and its impact on the credit crisis, there is concern that companies and boards may become risk-averse.

 

This article is extract from: Ten things for boards of directors to avoid by Deloitte

Apple shareholders face California conundrum

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This article is an extract from The Wall Street Journal:

“Call it the California conundrum.

It’s the reason Apple’s board of directors did not act on a straightforward and nonbinding proposal favored last year by about 74% of the company’s shareholders.

Now, the same issue will be back in front of Apple shareholders at the company’s Feb. 23 annual meeting. And the conundrum, unfortunately, is still around.

Here’s the story. The big public pension fund and influential investor known as CalPERS (the California Public Employees’ Retirement System) wants Apple to adopt what it says more than 80% of S&P 500 companies already have adopted: majority voting for directors in uncontested elections.

This is a key governance issue. It used to be that most companies (as Apple still does) used what’s called a “plurality” system for choosing directors when there’s only one candidate. In reality, plurality means one “for” vote gets a director re-elected, no matter how many unhappy shareholders “withhold” their votes.

“Majority” voting pretty much delivers what it implies and should make sense to anyone with an understanding of what the word election means. With various caveats, it means directors at many U.S. public companies need to garner more “for” votes than “withhold” votes to keep their seats at boardroom  tables…”

To read the full article: The Wall Street Journal



Toward Effective Governance of Financial Institutions

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“Drawing lessons from the financial crisis, the G30 calls on boards of directors of financial institutions to do far more to strengthen governance. The report stresses that values influence the behavior of those with governance responsibilities and the key to reform is to promote changes in the ways in which these individuals think about their responsibilities.”

Toward effective governance of financial institutions

2011 Board Practices Report – Deloitte

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This report by the Deloitte Center for Corporate Governance and the Society of Corporate Secretaries and Governance Professionals provides results from a survey of over 200 corporate secretaries on topical governance questions, including shareholder engagement, board committees, strategy, and sustainability. New to this eighth edition is an analysis of director qualifications, which includes insight on board composition related to gender, age, and ethnicity…

2011 Board Pracices Report by Deloitte


Tech CEOs – life on the edge of risk management

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By Aarty Maharaj

“Heading up a company is not all it’s cracked up to be. A CEO has to be a master - at almost everything. Whether it’s legislative advocacy, solid corporate governance practices, strategic planning or even choosing the right staff members, these head honchos must be able to balance every aspect of an organization’s future and stand at the forefront of success or failure.

In the tech industry, for instance, CEOs have been experiencing a significant amount of change. Sometimes these executives are stretched too thin because of the complex nature of tech services now driven by the evolving social networking platform. In this setting, the job of the CEO goes beyond simply achieving excellence in strategic execution. He or she must have the ability to react quickly to a situation, craft capabilities and watch for early warnings of changes. In business, this is where risk management comes in.

A report on Business Insider, On the hot seat: 10 tech CEOs who could be fired tomorrow, examines major risk management missteps some executives have made while heading up a tech company.

According to the report, the following CEOs are expected to get the boot soon: Dick Costolo, CEO of Twitter, who has yet to demonstrate the social networking site is more monetizable than AIM or chat; Scott Thompson, Yahoo’s new CEO who is already wrestling with a proxy fight against shareholder activist Dan Loeb; and Andrew Mason, Groupon’s CEO who can’t seem to get the company’s financial reporting right – as a result, the ‘deal-of-the-day’ website is undergoing an investigation by the SEC.

‘These are strategic risk oversight and management on steroids – mostly about exploring how millions of people ‘stick’ to social media and then monetizing,’ says Brian Barnier, an industry analyst and risk management expert…”

This is an extract from Corporate Secretary, to read more: www.corporatesecretary.com


Boardroom Trends – Is Your Board Prepared?

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Say on pay, director indemnification, the structure of risk committees, Bob Bostrom, partner, SNR Denton, talks to Corporate Board Member about the top issues for corporate boards this year, and what directors should do ahead of time to prepare.

To see the video: Boardroom Trends – Is your Board Prepared ?