Governance Committees Performance Catalyst for the Board. David Anderson, MBA, PhD, ICD.D The Anderson Governance Group

Transcription

1 Governance Committees Performance Catalyst for the Board David Anderson, MBA, PhD, ICD.D The Anderson Governance Group

2 Introduction Beth Deazeley, LL.B Principal, Risk Oversight and Governance CICA David Anderson, MBA, PhD, ICD.D President The Anderson Governance Group

3 Background The Canadian Institute of Chartered Accountants, through the Risk Oversight and Governance Board (ROGB), develops guidance materials for boards of directors and senior officers The 20 Questions series addresses subjects important to directors by posing questions that directors may ask of management, advisors, or themselves A brief summary of current thinking and some recommended practices are provided for each question

4 Background Topics covered by the 20 Questions Series include: Building a Board Codes of Conduct Crisis Management Directors and Officers Liability and Insurance Executive Compensation Governance Assessments Internal Audit Risk Strategy Human Resources and Compensation Committees

5 20 Questions Directors Should Ask about Governance Committees

6 Overview Understanding the role and value of the governance committee Building an effective governance committee Composing the board Enhancing the board s performance effectiveness Emerging roles of governance committees

7 Role and value of the governance committee Evolution of the role of the governance committee Key responsibilities: Nomination of directors Development and review of governance principles / policies Compliance with governance requirements Enhancing board performance: Managing board and committee structure and composition Conducting director orientation and ongoing education Overseeing board evaluation process

8 Role and value of the governance committee Determining the appropriate role for the governance committee Regulatory requirements Allocation of responsibilities to other committees Emerging roles Enhancing the board s relationship with management Stakeholder engagement

9 Building effective governance committees Required skill sets Governance mindset and ability to make governance relevant to the business Passion to shape board s philosophy and behaviour Respect for external perspectives Tactful, persuasive communication Who should sit on the governance committee? Staffing strategies Independence Choosing the chair

10 Composing the board Creating the board composition strategy Director recruitment / selection Recruiting and assessing potential directors Staffing committees Selecting board and committee chairs Director succession / retirement Tenures and term limits Chair succession

11 Enhancing the board s performance The importance of ongoing director development Initial board orientation Ongoing director education Supporting individual director development initiatives Advising the chair on board performance

12 Enhancing the board s performance Managing the board evaluation process: Articulate the evaluation s purpose and principles Decide the scope of the process Choose the sources of feedback Decide how feedback will be obtained and reported Determine who will receive the feedback reports Involve the board chair in individual feedback Act constructively on feedback Addressing underperformance by directors

13 Enhancing the board s performance Supporting chair succession Development of chair mandate Inclusion of chair succession in governance committee mandate Set out board chair succession process Maintaining mandates, policies and practices Reviewing policies and mandates for currency and alignment with the organization s philosophy and practice Keeping abreast of new developments Development of annual board calendar

14 Emerging roles of governance committees Some of the new and evolving roles: Acting as a forward-looking radar to identify developing issues Contributing to strategy and policy development re: shareholder and stakeholder relations Strengthening the CEO succession planning process Preparing the board for crisis Determining director compensation

15 Governance Committee Performance Catalyst for the Board Questions & Answers

16 More information CICA resources are available at: The Anderson Governance Group