Don’t Get Board – Know Your
Role
The duties and responsibilities of the
Board and Directors
It Starts at the Top
• As the Board goes, so goes the company
• The Directors carry the responsibility to
ensure the Board is operating efficiently
and effectively.
4/16/2015
CAHRMA Conference Presentation
Elders versus Directors
• As you look at how Board’s operate, I
see a lot of similarities to the Aboriginal
culture and how elders were the guiding
influence to decisions and how the
community moved forward.
• Elders passed on their wisdom and
experience and boards should do the
same.
4/16/2015
CAHRMA Conference Presentation
Let’s Take a Look at What Not To Do!
• Here’s a clip from the comic strip Dilbert
showing how some Board’s seem to
operate.
4/16/2015
CAHRMA Conference Presentation
4/16/2015
CAHRMA Conference Presentation
What’s the Board’s Job
• At it’s simplest, the Board is responsible
for the direction and protection of the
company.
• The Board oversees, it does not manage.
• Ultimately, if something goes wrong, it is
the Board’s responsibility.
4/16/2015
CAHRMA Conference Presentation
Where do you go now?
Let’s take a look at another video that
starts to explain the Board’s role and
responsibilities.
4/16/2015
CAHRMA Conference Presentation
4/16/2015
CAHRMA Conference Presentation
1. Set Strategic Direction
•
•
•
•
4/16/2015
Decide what the company should do.
Decide how it should do it.
In what time frame?
In what way?
CAHRMA Conference Presentation
2. Obtaining Resources
• It is the job of the Board to make sure
the company has what it needs to have,
in order to do what it needs to do.
4/16/2015
CAHRMA Conference Presentation
3. Monitor Performance
• Make sure you’re on track.
• Have some clever KPI’s (key
performance indicators).
– Things that you know will tell you that
people are doing what they need to do.
• Make sure that you measure things that
count.
4/16/2015
CAHRMA Conference Presentation
4. Make Sure You Are Managing Risk
• Includes compliance
– Understanding what could go wrong.
– Understanding what could cause it to go
wrong.
– Understanding what could prevent it from
going wrong.
• Making sure you have policies and
procedures in place to manage those
risks effectively.
4/16/2015
CAHRMA Conference Presentation
5. Provide Accountability
• Make sure that you report to your
shareholders.
• Report in a transparent and open
fashion and in a timely manner about
the performance of the company.
4/16/2015
CAHRMA Conference Presentation
Director’s Liability
• ”Directors of a corporation are jointly and
severally, or solidarily, liable to employees
of the corporation for all debts not
exceeding six months wages payable to
each such employee for services performed
for the corporation while they are such
directors respectively.”
• Section 119 (1) of the Canada Business
Corporations Act
4/16/2015
CAHRMA Conference Presentation
Canada Business Corporations Act
• There are a number of definitions within
the Act that define the personal liability
that is assigned to directors of the
corporation.
• As a director, it is very important that
you understand the business before you
and make decisions that are in the best
interests of the ownership.
4/16/2015
CAHRMA Conference Presentation
Jim Brown – The Imperfect Board
Member
“It is obvious that having the skills and
knowledge to perform as a smart board is
not enough. It is also important that boards
be healthy. By this, we refer to issues
including the level of trust and candor that
exists at the board, the clarity of the
respective roles of board and management,
the relationship dynamics within the board,
and the determination of the directors to
subordinate their personal interests and
serve the interests of the shareholders or
members.”
4/16/2015
CAHRMA Conference Presentation
The Imperfect Board Member
“The board’s position is not
management one step up, it’s ownership
one step down.”
Jim Brown
4/16/2015
CAHRMA Conference Presentation
Seven Disciplines of Governance
Excellence
• DIRECT – Organizational Performance
The most fundamental discipline of a
board of directors is to direct the
organization for high performance.
Directing is a proactive discipline, focused
on the future.
4/16/2015
CAHRMA Conference Presentation
2nd Discipline
• PROTECT – Organizational Performance
The board is responsible to protect the
interests of the owners. Boards are
assembled to act as trustees on behalf of
the owners they represent, be they
stockholders or members or taxpayers in
the community.
4/16/2015
CAHRMA Conference Presentation
3rd Discipline
• RESPECT – Owner Expectations
The essence of a board’s job is to direct
and protect the organization in the
interests of the owners. It follows that
being clear about who your owners are
and what they are expecting is paramount
to governing well.
4/16/2015
CAHRMA Conference Presentation
4th Discipline
• REFLECT – On Organizational Results
It is common for boards to react – either
favorably or disparagingly – when they
learn of recent results of the organization.
However, rather than react, the best
response of the board is to take time to
reflect.
4/16/2015
CAHRMA Conference Presentation
5th Discipline
• SELECT – Your Prominent Leadership
The people you choose to be officers and
directors are very important, because
everyone associated with the organization
is affected by the results these prominent
leaders achieve and the impressions they
project. Strong, confident, competent
leaders enhance the organization and it’s
potential for the future.
4/16/2015
CAHRMA Conference Presentation
6th Discipline
• EXPECT – Great Board-Management
Interaction
Great board-management interaction is
vital for governance excellence and
organizational success. It is helpful for us
to remember that lots of organizations
thrive with talented CEOs and
dysfunctional boards, but no organization
does well for long with an ineffective CEO.
4/16/2015
CAHRMA Conference Presentation
7th Discipline
• CONNECT – For Healthy Board Relations
The best boards work together as a team,
capitalizing on the strengths that each
director brings to the table and
demanding full engagement by everyone.
4/16/2015
CAHRMA Conference Presentation
Your turn!
• What did you learn?
• What’s happening in your community
that I missed in the presentation?
• What do you need to change your
situation?
• Questions
4/16/2015
CAHRMA Conference Presentation