8 Components that Impact Board Effectiveness 1 Analyze Current Board Functioning Board Composition Board Information Board Agendas and Meetings Board Leadership Board Dynamics Board/ Management Relationship Board Committees Board Processes Board Action Plan Source: Great Companies Deserve Great Boards: A CEO’s Guide to the Boardroom, Palgrave-Macmillan, 2011
Agenda Magazine 2011 Survey of 770 directors How effective do you consider your board evaluation process? Have you changed your board evaluation process in the past 2 -3 years? 31%
Board Engagement in Strategy Educating the board about key business factors SWOT (Strengths, Weaknesses, Opportunities, Threats) Strategic Alternatives Strategic Choice Optimal Point to Where most CEOs Engage Board Engage their Boards On Strategy Implementation
Appendices
5 Hallmarks of a High-Performing Board 5 1. 2. 3. 4. 5. When you ask the CEO and executives how the board about the board’s most significant contributions – how the board really adds value for the company – they reply positively and can give 2 -3 specific and substantive examples. When you ask the board members the same question, they can also provide 2 -3 specific and substantive examples. When you ask board members if the board can improve in any way, they can give you at least 2 -3 ideas for further improvement – high performing boards become that way through a mindset of “continuous improvement”. The climate of the boardroom is one of vibrancy, energy – good give and take on important issues impacting the company The performance of the company – financial, operating and strategic performance – is strong. A high performing board ultimately guides a company to increased value for shareholders.
How Satisfied are You With? ? 15% 20% 50% Source: PWC 2011 Study of approx. 800 US public company board members.
# of Outside Directors with Industry Knowledge: Top 100 CDN Companies (Spencer Stuart 2011 Board Index)
Board Composition: Amazon. com 8 Name Age Tenure Boards Experience/Background A. Monie 61 4 2 CEO Ingram Micro; formerly Pres. of Ingram’s Asia/Pacific Region based in Singapore B. Kirkorian 44 1 1 Co-founder of digital TV tech firm (Sling. Media) J. Gorelick 61 0 2 Former Deputy US Attorney General J. Bezos 48 18 1 Chairman and CEO; founder J. Seely Brown 71 8 3 Former Chief Scientist, Xerox. J. Rubinstein 55 2 1 SVP Product Innovation, Hewlett-Packard; former CEO, Palm (acquired by HP) P. Stonesifer 55 15 1 Former SVP, Interactive Media Division, Microsoft T. Ryder 67 10 4 Former CEO, Readers’ Digest; Chairman, Virgin Mobile T. Alberg 72 16 1 Lead Director; Managing Director, venture capital firm investing in tech companies Wm. Gordon 62 9 2 Founder, Electronic Arts; Partner, Kleiner Perkins
Board Composition: Intuitive Surgical 9 Name Age Tenure Boards Experience/Background A. Levy 74 12 1 CEO, Incline Therapeutics; co-founder and CEO Northstar Neuroscience A. Johnson 59 2 1 CEO, Market Tools (software services) C. Barratt 49 1 1 CEO, Antheros (semiconductors); co-inventor of many US patents in wireless communications Dr. F. Loop 75 7 2 Retired CEO, Cleveland Clinic ; cardiac surgeon E. Halvorson 62 9 2 Lawyer; former COO, Salem Communications G. Guthart 46 12 2 Chief Executive Officer. Part of core team who developed computer-enhanced surgery at Stanford G. Stalk 61 5 1 Senior advisor and fellow, Boston Consulting Group; professor of strategy, Rotman Business School L. Smith 67 15 1 Former CEO, Intuitive (software), previously with IBM M. Rubash 54 5 1 Chief Financial Officer, Heartflow (med. devices), former CFO, Shutterly (personal publishing)
If There Were 13 Seats in the Boardroom…. . Family Finance: Accounting Finance: Capital Markets Branded Goods Government Political, Regulatory Family CEO Experience Family Industry Experience Food & Drink Industry Experience Retail Mergers & Acquisitions International Experience Legal, Risk, Insurance
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