During my investment career I have always been perplexed by the make-up of most firm’s Board of Directors, from my coverage of U.S. stocks to global Stocks, from small cap to mega cap companies, from the buy side to the sell side. I have seen it all, and I have almost universally been disappointed. I have seen a medical doctor sit on the board of one the largest railroads in the U.S., management from top customers sitting on compensation committees, and active Fortune 100 CEO’s that also held three board of director positions. But like most investors, I have just noted the poor board make-up, and included it in the mosaic of information I use to make investment decision, because in reality most board memberships are poorly filled and there was little as investor I could do about it. Unfortunately, I did not think about it much, I did not ask why boards were so poorly filled.
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Does your board have directors who trust each other, are committed, are comfortable with conflict, hold each other to account and are focused on results?
If not, your board is likely to have some degree of dysfunctionality and is possibly in need of an intervention.
I have been working with boards of organisations of all sizes in all sectors for a number of years and most of them exhibit some degree of dysfunctionality,
The chairman’s presentation at Diligent’s (DIL –NZX) 2013 AGM (June 23rd) included the following brief statement under the heading Strengthened Internal Controls: “The Board is currently undertaking a review of corporate governance matters with the assistance of an outside consultant, including with respect to the desired skill sets for the Board, share administration and other internal processes related to corporate governance.”
Right answer! – nothing except their ISIN (International Securities Identification Number)
It was Rolf-E. Breuercon who set the ball rolling for DeutscheBank with an inept interview that triggered a ten-year-long stint of legal battles. In the end the bank was near on a billion Euros poorer in hard cash and loss of image, not even counting legal fees.
By Terrance M. Booysen (Director: CGF) and peer reviewed by Jayson Kent (Cowan-Harper-Madikizela Attorneys: Senior Associate)
In today’s fast-paced business environment, where time is of the essence, any manner in which processes can be streamlined, made more efficient, and concluded within a shorter time frame than previously possible, is generally met with positivity and appreciation. This is no less the case in the realm of dispute resolution, since parties to a failed agreement often find that there is hardly time to have a dispute, let alone resolve it. Increasingly the benefits of Alternative Dispute Resolution (‘ADR’) are being lauded over more traditional, litigious methods which most often start with contending and expensive lawyers, followed by complex, expensively drawn out legal processes. Juxtaposing the traditional approach of settling disputes first and formally through the courts, there are international calls for greater efficiencies in all aspects of the dispute resolution process. However, notwithstanding the benefits expected by ‘side-stepping’ the formal courtroom process, the success of ADR depends largely on negotiation, including the goodwill and collaboration of all the affected parties. If any of these elements are missing, then it is inevitable that the ADR process may be negatively impacted and even fail.
The structure of organisational leadership is conceived as being two dimensional. That is, there are two teams, the board and an executive, operating independently of one another, yet residing within the same organisation.
For clarity, my definition of the term ‘executive’ refers to the CEO and senior functional managers, e.g. chief financial officer, operations manager, marketing manager, etc., who have regular contact, formal or informal, with the board and/or individual directors.
Family and social pressures on top of a busy executive job leave very little time for many to consider anything more than managing the status quo. However, not carving out some time to develop your personal brand can have serious consequences for your future board career. This means that starting your search for board roles early is absolutely critical.
In the past few years in Iran there have been publications of guidelines set out by the Central Bank on issues such as: internal control systems based on Audit and Risk Management and the improvement of corporate governance in the banks organizations. As a result, similar to other countries, Iranian banks are also in the process of implementing corporate governance principles and systems. With the support of the Central Bank and Tehran Stock Exchange, corporate governance is developing in Iran.
The basic model of commercial aviation is a thin tube of highly pressurised metal being propelled at 600 miles per hour by inflammable fuel at 35,000 feet in all weathers at temperatures of -57 degrees. So have you ever wondered how aviation got to be one of the safest forms of transport, despite being inherently full of such potentially catastrophic risks?
Do B Companies’ boards of directors have their own characteristics?
By definition, B Corps have a three-dimensional DNA, being concerned not only with economic results, but also with social and environmental matters. Traditional boards of directors assume a fiduciary duty that is related with loyalty and care: loyalty, by treating every shareholder in equal conditions; and care, by safeguarding their economic interests. Therefore, the success of a traditional company is measured by the economic value provided its shareholders or owners.