Post on 22-Jan-2018
SHAREHOLDERS WERE BECOMINGCONCERNED WITH THE ROLE ANDCONTRIBUTION OF BOARD MEMBERS,
including William
For instance, members
did not have a clear &
shared understanding
about the value and
role of the board
What are the board’s main
responsibilities?
Source: PwC’s What is the board’s role in a family business. 2014
56
56
59
61
62
74
85
Evaluate top executive
performance
Succession planning
Oversee risk management
Set/approve compensation for
top executives
Oversee/approve capital budget
and key operating budgets
Set corporate strategy
Monitor company's performance
THEY WERE STRUCTURED TO MEET REGULATIONS,
NOT STRATEGIZE WHAT THE COMPANY NEEDED
FOB Boards
NON-FOB Boards
52%
42%
The skills missing from boards
Source: Boris Groysberg and Deborah Bell
They would spend most of the time
reviewing
REPORTS &
COMPLIANCE
2
6
7
7
15
15
16
24
29
14
25
34
35
40
45
45
42
50
Other
Regulatory Compliance
Crisis Management/Planning
Executive Compensation
IT Strategy
Risk Management
Information Technology Risks
Succession Planning
Strategic Planning
Yes, much more time & focus than in the past
Yes, but not a great increase from the past
Would you like your board to devote
more time in the upcoming year to
considering the following matters?
Source: PwC’s 2013 Annual Corporate Directors Survey
VALUE & ROLELEAST INVOLVED TO MOST INVOLVED
The
Passive Board
The
Certifying Board
The
Engaged Board
The
Intervening Board
The
Operating
Board
Least Involved Most involved
Source: David Nadler. Building Better Boards. HBR, 2004.
NEXT GENERATION BOARDS
ARE INVOLVED WHERE THEY
ADD THE MOST VALUE
Boards That Partner
Boards That Monitor
Boards That Take Charge
Boards That Can Step Back
Source: David Nadler. Building Better Boards. HBR, 2004.
DIFFERENTSTRUCTURE
A winning team with a
Chairman or lead
member
Dependent
member
Independent
member
Dependent
memberIndependent
member
ALSO HAVE INDIVIDUAL & TEAM COMPETENCIES
TO DIRECT THIS STRATEGY & FULFILL ROLES
Next generation boards
Professional AssetsMember
1Member
2Member
3Member
4
Internationalization & global management
Professional network, knowledge, & experience in industry & regions where the company competes
Technology
Risk Management
Strategic Talent Management
EXPLICITLY DEFINEWHAT ARE THEIR KEY
PROCESSES
Directing strategy & capital
allocation
Risk management
CEO and key executives evaluation
Succession plan for CEO & key
executives
Strategic talent management
& compensation
Board evaluation & management
And for each key process, they define where and
when to intervene each
year
Educating the board
about the business
SWOT
(Strength,
Weakness,
Opportunities,
Threats)
Strategic
Alternatives
Strategic
Choice
StrategyImplementatio
n
Optimal Point
Engage Board
On Strategy
Where most
CEOs Engage
their Boards On
Strategy
BOARD DYNAMICS
IS ACTIVELY
DESIGNED AND
MANAGED
Agenda management
Information management
Session Management
Off-session Coordination
Relationships With Management
& Shareholders
Competencies & Culture Building
Dedication & Compensation
When William explained
the concepts… But later
changed their minds
because they realized that doing nothing would not
change the reality.
The board was hesitant
Implementing this new strategy
would take three steps:
1.Define value
& role
2.Design the
board
3.Lay the
road map