8 components that impact board effectiveness 1 analyze current board functioning board action plan...
TRANSCRIPT
8 Components that Impact Board Effectiveness
1
Analyze Current Board Functioning
Board Action Plan
BoardComposition
BoardLeadership
BoardDynamics
Board Agendas and Meetings
BoardInformation
Board/ ManagementRelationship
Board Committees
Board Processes
Source: Great Companies Deserve Great Boards: A CEO’s Guide to the Boardroom, Palgrave-Macmillan, 2011
Agenda Magazine 2011 Survey of 770 directors
How effective do you consider your board evaluation process?
Have you changed your board evaluation process in the past 2-3 years?
31%
Board Engagement in Strategy
SWOT(Strengths,
Weaknesses,Opportunities,
Threats)
Strategic Alternatives
Strategic Choice
StrategyImplementation
Educating the board about key businessfactors
Where most CEOs
Engage their Boards
On Strategy
Optimal Point to
Engage Board
On Strategy
Appendices
5 Hallmarks of a High-Performing Board
1. When you ask the CEO and executives how the board about the board’s most significant contributions – how the board really adds value for the company – they reply positively and can give 2-3 specific and substantive examples.
2. When you ask the board members the same question, they can also provide 2-3 specific and substantive examples.
3. When you ask board members if the board can improve in any way, they can give you at least 2-3 ideas for further improvement – high performing boards become that way through a mindset of “continuous improvement”.
4. The climate of the boardroom is one of vibrancy, energy – good give and take on important issues impacting the company
5. The performance of the company – financial, operating and strategic performance – is strong. A high performing board ultimately guides a company to increased value for shareholders.
5
How Satisfied are You With??
15%
50%20%
Source: PWC 2011 Study of approx. 800 US public company board members.
# of Outside Directors with Industry Knowledge: Top 100 CDN Companies (Spencer Stuart 2011 Board Index)
Board Composition: Amazon.com
Name Age Tenure
Boards
Experience/Background
A. Monie 61 4 2 CEO Ingram Micro; formerly Pres. of Ingram’s Asia/Pacific Region based in Singapore
B. Kirkorian 44 1 1 Co-founder of digital TV tech firm (SlingMedia)
J. Gorelick 61 0 2 Former Deputy US Attorney General
J. Bezos 48 18 1 Chairman and CEO; founder
J. Seely Brown 71 8 3 Former Chief Scientist, Xerox.
J. Rubinstein 55 2 1 SVP Product Innovation, Hewlett-Packard; former CEO, Palm (acquired by HP)
P. Stonesifer 55 15 1 Former SVP, Interactive Media Division, Microsoft
T. Ryder 67 10 4 Former CEO, Readers’ Digest; Chairman, Virgin Mobile
T. Alberg 72 16 1 Lead Director; Managing Director, venture capital firm investing in tech companies
Wm. Gordon 62 9 2 Founder, Electronic Arts; Partner, Kleiner Perkins
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Board Composition: Intuitive Surgical
Name Age Tenure
Boards
Experience/Background
A. Levy 74 12 1 CEO, Incline Therapeutics; co-founder and CEO Northstar Neuroscience
A. Johnson 59 2 1 CEO, Market Tools (software services)
C. Barratt 49 1 1 CEO, Antheros (semiconductors); co-inventor of many US patents in wireless communications
Dr. F. Loop 75 7 2 Retired CEO, Cleveland Clinic ; cardiac surgeon
E. Halvorson 62 9 2 Lawyer; former COO, Salem Communications
G. Guthart 46 12 2 Chief Executive Officer. Part of core team who developed computer-enhanced surgery at Stanford
G. Stalk 61 5 1 Senior advisor and fellow, Boston Consulting Group; professor of strategy, Rotman Business School
L. Smith 67 15 1 Former CEO, Intuitive (software), previously with IBM
M. Rubash 54 5 1 Chief Financial Officer, Heartflow (med. devices), former CFO, Shutterly (personal publishing)
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If There Were 13 Seats in the Boardroom…..
Family
Family
Family
Industry Experience Food &
Drink
International Experience
Finance: Accounting
Finance: Capital Markets
Branded Goods
Industry Experience Retail
Government Political, Regulatory
Legal, Risk,
Insurance
Mergers & Acquisitions
CEO Experienc
e