Director s Manual. Peter C. Browning William L. Sparks

Transcription

1 Director s Manual Peter C. Browning William L. Sparks

2 Chapter 1 The Changing World of Board Governance: How We Got Here... 1 Learning Objectives... 1 Introduction... 1 How and Why Boards Have Changed... 1 Why These Events Are Important... 2 A Barometer for CEO Compensation... 3 Global Competition Brings Change... 3 The Impact of Strategic Planning... 3 The Impact of Long-Term Incentives... 3 Phase Three The Results of Uncertainty A Board Governance Tipping Point... 5 The Most Impactful Governance Change... 5 Other Important Governance Changes... 6 Impact of the 2008 Financial Meltdown... 7 Federal Bailout... 8 Chapter Summary... 8 What s Next?... 9 Review Questions Review Answers Chapter 2 Role of the Board Learning Objectives Introduction Home Depot s Leadership Question Poor Choices by Chairman A Change of Direction Share Price Drop Two Key Guiding Principles Why Boards Exist Three Critical Questions That Boards Ask Is the Right CEO Running the Company? Predicting Leader Success Is Impossible The Cost of a Wrong Choice The Real HP Story How to Make the Right Choice Is A Robust Succession Plan In Place? Determining the Right Strategy Chapter Summary What s Next? Review Questions Review Answers Chapter 3 Key Board Leadership Roles Learning Objectives Introduction Public Outcry for Action Changes in NYSE Listing Requirements The Debate over the Separation of Roles Large Financial Institution Example Should CEO and Director Be Separate Roles? Nonexecutive Chairman, Lead Director, or Presiding Director Defining the Role of Nonexecutive Chairman The Challenge of Board Leadership Challenges of Transition and Letting Go... 28

3 Communicating with Shareholders Institutional Investor Activity Chapter Summary What s Next? Review Questions Review Answers Chapter 4 Board Culture Learning Objectives Introduction Understanding Board Culture Examples Illustrating Schein s Model of Culture and Board Dynamics A Nominally Engaged Board A Highly Engaged Board The Three Elements of Board Culture Individual Personalities of Board Members The Larger Context or Macro-Environment Factors Impacting the Business CEO Leadership Style Narcissistic Leaders Example of Context The Leadership and Board Performance Cycle Impact of Style The Detached Culture Achiever Leadership Style The Dramatic Culture Affirmer Leadership Style The Dependent Culture Asserter Leadership Style The Dynamic Culture Actualized Leadership Style Transforming Board Culture Transforming the Detached Group Culture Transforming the Dramatic Group Culture Transforming the Dependent Group Culture Maintaining the Dynamic Group Culture Chapter Summary What s Next? Review Questions Review Answers Chapter 5 Group Dynamics and Board Decision-Making Learning Objectives Introduction Why Working in Groups Is Difficult Factors to Consider Groupthink: Managing Conflict in the Boardroom Understanding and Avoiding Groupthink Getting Past the Abilene Paradox The Abilene Paradox in the Boardroom Diagnosing The Abilene Paradox Optimizing Board Decision-making Chapter Summary What s Next? Review Questions Review Answers Chapter 6 Board Structure and Schedule Learning Objectives Introduction Board Size Meeting Requirements and Preparation ii

4 Board Meeting Preparation The Realities of Preparation How Many Committees Are Needed Committees of the Whole Effective Meetings and Service Chapter Summary What s Next? Review Questions Review Answers Chapter 7 Assessing Board Performance Learning Objectives Introduction The Evolution of Board Assessments Examples of Boards Assessments Customizing the Assessment Process Where to Start Finding Your Own Best Practice Impact of Board Culture Conducting Peer Reviews Other Peer Review Options Chapter Summary What s Next? Review Questions Review Answers Chapter 8 The Challenge of the Disruptive Director Learning Objectives Introduction Disruptive Members a Common Issue Firing Board Members Not Simple The Ying and Yang of Conflict An Effective Dissenter Five Types of Disruptive Directors The Dominator The Micromanager The Expert The MIA Director The Dinosaur Director Dealing with Disruptive Directors How Assessments Help End of the Process Chapter Summary What s Next? Review Questions Review Answers Chapter 9 The Other Succession Challenge: The Board of Directors Learning Objectives Introduction Why a Board Needs To Plan for Succession Demographics and Board Service Realities Enron, the 2008 Financial Collapse, and Dodd-Frank Building a Board Succession Plan Where to Begin Board Job Description Single-Issue Board Members iii

5 Hire a Consultant? The Chemistry Factor The Selection Process Educating, Onboarding A New Member Chapter Summary What s Next? Review Questions Review Answers Chapter 10 What s Next in the Boardroom? Learning Objectives Introduction Ongoing Scrutiny of Executive Compensation Pressure to Address CEO Pay Pay for Performance Continuing Demands for More Proxy Information Responsibilities Detailed More Shareholder and Investor Activism Greater Demands for Proxy Access Sharper Focus on Risk Management Ever-Increasing Scrutiny of Board Composition The Way Forward Chapter Summary What s Next? Review Questions Review Answers Appendix A Board of Directors Self-Assessment Appendix B Audit Committee Assessment Appendix C Compensation Committee Assessment Appendix D Governance/Nominating Committee Appendix E CEO Assessment Appendix F Lead Director Assessment Appendix G Nonexecutive Chairman Assessment Appendix H Peer Assessment Glossary Index iv