Tag Archives: bard evaluation

Several keys questions for board members and their comittees.

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The PwC (refer to Price water house Coopers) has published a report about the keys questions that a board should consider in order to carry out their governance duty.

 

Here you have the questions and a link to read the Pwc answer to this thematic.

 

1/ how is management evaluating and executing its strategic plan and risk management practices to address today’s competitive global marketplace?

 

2/What is the company doing to comply with anti-corruption laws and regulations?

 

3/How is management addressing contemporary accounting hot topics, including asset impairments, income taxes, and segment reporting, and ensuring the transparency and appropriateness of the company’s disclosures?

 

4/Does the audit committee engage in sufficient discussions and interactions with the external auditor in response to the current dialogue relative to audit quality and the reliability of financial reporting?

 

5/Has management considered the financial and business implications of the new tax law, and what is it doing with respect to the impact of potential corporate tax reform?

 

6/is the company effectively addressing the key opportunities and risks of IT?

 

7/Does management have processes in place to address cybersecurity risks?

 

8/what is the board’s approach to communications with shareholders and other stakeholders, and should it be reconsidered?

9/As regulatory bodies and lawmakers continue to discuss, propose, and enact laws and regulations, and shareholders continue to be active, is management analyzing possible effects and considering “no regrets” moves?

 

Here read the all report and answers: Key questions for board and audit committee members

 

Guide for Nonprofits Boards Candidates

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You certainly want to join the board of an organization where you find the mission meaningful. But be careful not to wind up in a situation that you will regret. You can save yourself and the non-profit from a bad match by taking a few steps before committing to join a board.

 

 

Here are 10 recommendations to candidates in considering a non-profit:

 

  • Meet with the organization’s chief executive officer — sometimes referred to as the executive director. The CEO’s effectiveness is essential to the organization’s success, so getting a sense of the CEO is important. Additionally, the CEO is likely to have a say in who is selected for the board, so meeting is an opportunity for you to establish rapport. And, the CEO should be able to bring the organization’s work to life and help give you insights into items 2-9 below.

 

  • Understand the work of the organization and how it assesses its effectiveness. It’s a good idea to visit at least one program site to see the program(s) and staff in action. Do they use a board Portal? Are they evaluating themselves? etc…

 

  • Find out the size of the budget and the revenue model: what percentage of funding comes from government, fees for services, and philanthropy — corporations, foundations and individuals. When you know where the money comes from, or where it might be augmented, then you can better understand how the board can be useful to the CEO in building revenues.

 

  • Find out who is chairing the board, and how they regard their role as chair and the role of the board. Try to get a sense of the rapport between the chair and the CEO. See who serves in the other officer positions. And ask if there is a plan for leadership succession.

 

  • Meet with at least one board member, ideally a board member in a leadership position, such as the chair of the board governance committee (nominating committee) or board chair.

 

  • Review the list of board members and their backgrounds to find out the caliber and diversity of experience and backgrounds. Find out the extent to which they are contributing financially and otherwise. This will also help you understand if you have something to add that others might not bring to the table and the likelihood of your being a fit for the board.

 

  • Ask what will be expected of you as a board member, in terms of attendance at board meetings, participation on committees, financial contributions, fundraising and anything else.

 

  • Ask for and read the following items: the organization’s bylaws, most recent audit and management letter, budget, a strategic plan if there is one, and organizational materials.

 

  • Find out the size of the organization’s cash reserve. Also check if there is an endowment, whether the organization is cutting into it, and the implications and long-term plan related to the endowment.

 

  • Google the organization to see if there were any past problems.

Don’t be scared away by an organization that has challenges. That’s exactly why they need you. Furthermore, your sense of reward and satisfaction will be magnified by your ability to be useful.

 

The key is finding the right board for you, and going in with your eyes wide open.

 

 

Read the full article: LinkedIn Board Connect: 10 Things Board Candidates Need To Know

The Board of Directors & Compliance: 4 Ideas for Improving the Effectiveness of & Reducing the Risk to Directors

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By Stuart M. ALTMAN for www.corporatecomplianceinsights.com

“A number of high profile corporate scandals at some large and supposedly sophisticated companies have, if nothing else, driven home the fact that no matter how strong you think your corporate compliance and ethics program is, the risk of failure is still there. This month I want to look at this issue from the standpoint of the board of directors.

Right now, there are a number of very concerned directors asking themselves whether they have done all they could, or should, have to prevent this and what are the ongoing risks, not only to the company, but to them personally. True, directors should always be thinking about the institutional risk to the company, but nothing motivates effectiveness like the risk of personal liability.

Ordinarily directors are protected by the business judgment rule which provides that well informed decisions of directors taken after due consideration and in good faith will not be attacked by a court because the decisions turned out wrong. In cases of compliance failures – whether issues of foreign bribery, cartel activity or environmental hazards, to name a few – the issue for a board is usually one of omission. Rarely has a board approved such activity. Rather, the issue is whether it has done everything possible to avoid such conduct. Here are four ideas that can help strengthen the effectiveness of the board in these situations and thus, limit risk.

Training

Interestingly, in many companies directors do not necessarily receive the same compliance training that employees do. Directors may claim they are too constrained by time, or that they, of course, know this material already. Perhaps they do, but even if the directors are compliance experts shouldn’t they know how the employees are trained? How do you measure the effectiveness of a program you have opted out of? In short, directors should go through, at a minimum, the same training employees receive.

But that is not enough. Directors need specialized training, not just in the nuts and bolts that line employees receive but also in the issues at the center of compliance and ethics. Directors need to be focused on the big picture of why a company has a compliance program. They need to know what questions their compliance professionals should be asking, and if directors don’t see this happening, they need to act quickly.

Moreover, at least some of this training should be external to the company. Even if management is well intentioned, it is vital that directors get an occasional different perspective on compliance from that which prevails in the company.

Structure

A long discourse of the various pros and cons of possible compliance structures would fill several of these columns. There is an active professional debate out there as to whether or not the chief compliance officer should be separate from the general counsel? Should both ethics and compliance roles be rolled into one position? Where does internal audit fit in? I won’t attempt to evaluate these debates here. Indeed, there may be no one right answer. But the way in which your company structures these roles is vital to your governance and your ability to address compliance and ethics.

Boards of directors should be intimately involved in planning for these issues. Directors should regularly review the existing structure and make sure they are comfortable with it and it is serving the company’s interests. Whatever the specific structure chosen, those primarily responsible for compliance must have direct access to the board or a compliance committee. Given this dictate, you can decide what works for your company. Is your organization hierarchical in nature? Are managers expected to closely follow superiors with little questioning? If so, asking a GC who reports directly to the CEO to also serve as CCO and report to the board may place him or her in an unworkable position. If the CFO uses internal audit as a personal resource how comfortable can the board be that the head of IA would bypass that CFO if the situation called for it? On the other hand, where a company operates in a matrix environment with multiple reporting lines standard, such dual roles and reporting may come naturally.

Seek Advice

Most boards of directors do not have separate counsel from the entity they serve. Directors typically rely on the general counsel and regular outside counsel to do their job except in the rare situation such as the need for a special committee and counsel thereto. In general, most boards do not need regular and continuing counsel involved in every decision they make. But that does not mean such outside advice may not be useful some of the time…”

To read the complete article : www.corporatecomplianceinsights.com

Crisis Management and Board of Directors

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In this article you will find different kinds of crisis management which have more or less failed. At the end of the article there are some advice for board members and CEOs.

“I was working closely with the CEO of a large public company facing a crisis a few years ago. The company was in the news for days and it is fair to say the management team, the board and many employees felt under siege. The company was being hauled onto the carpet for issues related to the disclosure of confidential customer information. Many on the team knew that the issue, while serious, was contained to a small number of cases and could easily be corrected. Unfortunately, their message wasn’t getting through and as such, the CEO and his management team planned a major news conference to apologize and present a forward-looking plan to resolve the issue once and for all.

The day prior to the announcement, I was with the CEO preparing him for the news conference. Late in the afternoon came word that the Board Chair would not be available to participate. This came as a shock to the team. The CEO and Board Chair had a positive relationship. On major issues they always stood together. Given their history, the CEO turned to me and murmured, “Something really important must have come up for him to miss this”. I suspected that there was more to the decision than a scheduling conflict. As it turned out, his decision was an intentional move to distance the Board from the CEO.

It was soon clear that the Board had their own crisis management plan to announce… the termination of the CEO. The Board eventually came to the conclusion that the public would never accept that the very same leader that was in place while the breaches took place, could also be leader responsible for regaining public confidence.

Most Boards tend to stand arm-in-arm with the management team and the CEO during a crisis, saying that management enjoys complete support from the Board of Directors. This approach is correct in many cases. It is the duty of the Board to be informed, to be engaged, to provide counsel to management and to monitor both the effectiveness of the crisis management team and the impact of the crisis on the corporation. It is critical that directors do not try to manage the crisis on their own, over-react or speak to the media.

Where classic crisis management theory is light, as it relates specifically to the Board’s role in more complex situations. The scenarios described below provide different perspectives on Board involvement and obligations. The first is when the crisis relates specifically to the CEO. We have seen this situation play out in recent years where the CEO is accused publically of something illegal or inappropriate. Most recently, this happened at Hewlett Packard. Where, once informed, the Board acted proactively and clearly with regard to what had happened and communicated subsequent decisions taken…”

This is an extract from National, read full article here : National.ca

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 ?