Breakthrough Strategies ImprovingBOARDROOM

RELATIONSHIPS

Boardroom relationships

are importantneed improving

Assumptions

• 25 years of corporate governance focus Continued tweaking and refinement

Focus on structure and process More rules and regulation

Board performance issues persist Still focused on old issues and similar solutions

• Overlooked organizational risk Board / Management relationship

Premise / Hypothesis

• Between Board members Conflicting understanding and expectations

Difficulty getting everyone on the same page

Reluctance to defer to the group

Complacency until crisis occurs Individualism

Challenge of group work / decision-making

Relationship Risk

•Between Board & Management Sharing power and control Boardroom double standards

AttendancePreparationConductAccountabilityPerformance

Relationship Risk

•Board / Management Conflicting loyalties

Mission vs. Minister vs. _____? Significant resources for intangible

returnReal value of your Board?Contribution to your organization’s success?

Relationship Risk

• Systemic governance challenges Challenge of group work and decision-making Information ownership

Source of real power and control resides with Management

Inherent structural flaw Joining hierarchical and horizontal power

structures

Root Causes

• Continued focus on structure & process Things to which rules can be applied• Preoccupation on governance inputs

Juggling regulations, best practices, guidelines

• Difficulty dealing with conflict Lack of sufficient trust, confidence, courage

How did we get here?

TIME FOR NEW KINDS OF

BOADROOM CONVERSATIONS

T i m e l y i d e n t i fi c a t i o n a n d t a c k l i n g o f t h e t o u g h i s s u e s

New Questions / A New Posture

Can the Board fully support status quo? If not, what needs to change?

BOARD’S OFTEN “LIVE” SOMEWHERE BETWEEN THESE QUESTIONS

The Way Forward

• Different questions about board performance

• Proactively adopt governance practices• Apply practices with rigour

Traditional board evaluations/assessments focus on structure, process, compliance At best, superficial attention given to issues No real accountability to act; little impact Pro forma produces predictable results

The Way Forward

From Inputs to Outcomes Governance outcomes in addition to traditional

structural and process inputs The Board’s impact as opposed to isolated

practices The Board’s value as a strategic asset; and, The Board’s tangible contribution to the

Corporation’s success

The Way Forward

Other tactics (not strategies)… Commit to an explicit boardroom culture

Tenor and tone of meetings The way directors interact/work together Director behavioural requirements

Board and Committee Chairs defer to board needs

ACCOUNTABILITY MECHANISM

The Way Forward

Clarity of accountability relationships• Candid, mission focused

consideration of:Minister to BoardBoard to MinisterBoard to ManagementManagement to Board

The Way Forward

How are we going to work together?How are we going to share power and

control?How are we going to deal with conflict?

The Way Forward

Board/Management relationship

The Way Forward

How Board & Management will govern well?

Stewardship Independence Transparency

Stakeholder rights

Accountability Oversight

Critical Board QUESTIONSTHAT RARELY GET ASKED

What does governance mean for your organization?

• Create common understanding about the primary role of the Board and what it

means to govern

Question #1

What would be lost if the Board ceased

to exist?• Define the unique contribution the

Board makes; the value it brings

Question #2

MANAGEMENT RESPONSIBILITIES

21

BOARD RESPONSIBILITIE

S

SHARED OR OVERLAPPING

RESPONSIBILITIES

Question #3: What is the Board 100% responsible for?

What’s the working relationship between

the Board and the CEO/ED?

• how power will be shared• how the Board and CO / ED will work

together• how conflict will be addressed

Question #4

What is the boardroom culture?

• How do we choose to go about or work?• How will Board members conduct themselves and

relate to each other?• What will the tenor and norm of meetings be?

Question #5

Does the Board support the status quo without

reservation? Or, does something have to change?• What difficult issues is the Board

obligated to address?• What steps to get to resolution?

• Including mitigating risk

Question #6

What issues are known but not being

addressed and resolved?

Elephants in the room Sacred cows

Question #7

What double standards exist between the Board and Staff?

• What leadership inconsistencies/expectations?• What Board behaviours would not be tolerated

of Management?

Question #8

 

What does the Board aspire to become?

• What does the Board want to be able to say is true about its value, contribution, etc.?

Final Question

TD Canada Trust Centre55 King Street West, Suite 716

Kitchener, ON  N2G 4W1T: 519-502-0409

W: www.boardgovernance.caE: john@boardgovernance.ca