Archive for the “Governance” Category
Posted by Dr. Earl R. Smith II in Advisory, Governance, Turnaround Management, Venture Capital, tags: adviser, advisory board, board of directors, CEO, chairman, coaching, consulting, director, Executive Coaching, Governance, investing, investor, Leadership, leadership assessment, leadership coaching, leadership development, leadership styles, Life Coaching, management assessment, non-profit, nonprofit, Personal Growth, spirituality, turnaround, Turnaround Management
Dr. Earl R. Smith II
DrSmith@Dr-Smith.com
www.Dr-Smith.com
I am sometimes asked by investors to ‘parachute’ into a company and give them a quick assessment of conditions and possibilities. Most of the time, the company has been under-performing. Frequently the money that the investors provided has been spent and they are facing the need for follow-on funding. The investors want to know if additional investment is prudent. Generally I am asked to opine on four options: 1) shut it down, 2) sell or merge the company, 3) overhaul the team and value proposition and re-launch, or 4) make an additional investment and stay the course. My first steps are to prioritize those options and present a quick summary of the strengths and weaknesses of each. I also focus on the threats and opportunities that will most likely present themselves. Read the rest of this entry »
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Posted by Dr. Earl R. Smith II in Governance, tags: adviser, advisor, advisory board, board of directors, CEO, chairman, coaching, consulting, director, Executive Coaching, Governance, Leadership, leadership assessment, leadership coaching, leadership development, leadership styles, Life Coaching, management assessment, non-profit, nonprofit, Personal Growth, spirituality, turnaround, Turnaround Management
Dr. Earl R. Smith II
DrSmith@Dr-Smith.com
www.Dr-Smith.com
A confusion of roles can cause much friction in a senior team. It is important to know who is responsible for what and that they will be held accountable. Disorganization is bad enough but when that confusion reduces the ability of the team to cover the range of important governance functions essential to success, the business can suffer great harm. Two roles stand in more than symbolic opposition – the Chairman of the Board and the CEO. When both roles are filled by competent and dedicated individuals, the result is a dynamic and productive tension between the interests of the shareholders and the management team. When these roles are combined, one set of interests suffers and it is almost always that of the shareholders.
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One of the most commonly ignored conflicts in corporate governance is that between the role of the CEO and the one of Chairman of the Board of Directors. In some companies, this conflict is papered over by giving the same person both roles. This arrangement not only degrades the ability of the Board to meet its fiduciary responsibilities to the share holders – it also is an indicator that a Machiavellian culture has taken root within management and that the Board has ceded its responsibility – in direct terms, is acting negligently. Read the rest of this entry »
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Posted by Dr. Earl R. Smith II in Governance, tags: adviser, advisor, advisory board, board of directors, CEO, chairman, coaching, consulting, director, Executive Coaching, Governance, Leadership, leadership assessment, leadership coaching, leadership development, leadership styles, Life Coaching, management assessment, non-profit, nonprofit, Personal Growth, spirituality, turnaround, Turnaround Management
Dr. Earl R. Smith II
DrSmith@Dr-Smith.com
www.Dr-Smith.com
CEO involvement in succession planning is a delicate dance. Too much and the process clogs up – too little and it can go seriously astray.
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Professional corporate governance demands the organization have a succession plan in place. It must allow for an orderly transition of power and authority. The plan must anticipate the retirement, incapacitation or death of members of the senior management team. It should also anticipate the possibility that the board might have to change management leadership. The Succession Committee formalizes the strategic succession plan and makes recommendations to the full board of directors. Sarbanes-Oxley requires this for public companies but most privately held companies have recognized the importance of an orderly transition and have adopted some type of formal succession plan as well. Read the rest of this entry »
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Posted by Dr. Earl R. Smith II in Governance, Venture Capital, tags: adviser, advisor, advisory board, board of directors, CEO, chairman, coaching, consulting, director, Executive Coaching, Governance, Leadership, leadership assessment, leadership coaching, leadership development, leadership styles, Life Coaching, management assessment, non-profit, nonprofit, Personal Growth, spirituality, turnaround, Turnaround Management
Dr. Earl R. Smith II
DrSmith@Dr-Smith.com
www.Dr-Smith.com
Good talent is always hard to find. Good board members are getting much harder to find and recruit for two reasons. First, there are fewer of them around. Second, the risks of serving haev become much more substantial lately.
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Talent and leadership are commodities and as such react to the pressures of supply and demand. As baby boomers age, the supply of talent has become somewhat lower. Some far-sight companies began preparing for the inevitable exodus of talent many years ago and instituted effective coaching and leadership development programs. Companies that did not or could not take this approach are finding the best way to attract new board members to their board of directors is by means of increased compensation. Read the rest of this entry »
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Posted by Dr. Earl R. Smith II in Governance, tags: adviser, advisor, advisory board, board of directors, CEO, chairman, coaching, consulting, director, Executive Coaching, Governance, Leadership, leadership assessment, leadership coaching, leadership development, leadership styles, Life Coaching, management assessment, non-profit, nonprofit, Personal Growth, spirituality, turnaround, Turnaround Management
Dr. Earl R. Smith II
DrSmith@Dr-Smith.com
www.Dr-Smith.com
Corporate insurance is much more important these days. Adequately covering directors and officers is much harder and more expensive. The risks and liabilities are much better defined – but also much more severe. Investors need to make sure that the right coverage at the right price is firmly in place.
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The board of directors has a fiduciary responsibility to protect the assets of the company they serve. Good governance involves the use of insurance for various predictable risks. Some companies opt to self-insure for some risks, a strategy to employ when a company has a large number or employees or a large amount of control over the activity they are self-insuring against. If a company chooses to purchase insurance against risk, a good understanding of the policy chosen is important. In today’s litigious society, a company, CEO or corporate director cannot afford to be without coverage. Read the rest of this entry »
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Posted by Dr. Earl R. Smith II in Governance, tags: adviser, advisor, advisory board, board of directors, CEO, chairman, coaching, consulting, director, Executive Coaching, Governance, Leadership, leadership assessment, leadership coaching, leadership development, leadership styles, Life Coaching, management assessment, non-profit, nonprofit, Personal Growth, spirituality, turnaround, Turnaround Management
Dr. Earl R. Smith II
DrSmith@Dr-Smith.com
www.Dr-Smith.com
The right board members can insure that the board functions at a high level and covers its fiduciary responsibility to the shareholders. But getting the right members is far harder than it might seem.
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Adjusting the composition of an existing board often proves to be a more challenging engagement than the construction of one from scratch. One of the principal challenges is the establishment of new leadership. A second is to force the evolution of a new and more productive culture. A third is the professionalization of the board. Finally, the question of evolving a new definition of success and mission can prove particularly difficult. One place I generally start is with the Nomination Committee. Read the rest of this entry »
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Posted by Dr. Earl R. Smith II in Governance, tags: adviser, advisor, advisory board, board of directors, CEO, chairman, coaching, consulting, director, Executive Coaching, Governance, Leadership, leadership assessment, leadership coaching, leadership development, leadership styles, Life Coaching, management assessment, non-profit, nonprofit, Personal Growth, spirituality, turnaround, Turnaround Management
Dr. Earl R. Smith II
DrSmith@Dr-Smith.com
www.Dr-Smith.com
Investors and shareholders need to make sure that major business risks are covered. Failure to do so can result in major losses.
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Business risk too often is defined very narrowly and only in the context of the business plan and establishing credit. Business risk is much broader extending to probable material effects of events on a businesses’ ability to achieve established strategic goals. Professional governance will be concerned with business risk in the broadest sense and establish strategic plans to identify and mitigate risk. Read the rest of this entry »
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Posted by Dr. Earl R. Smith II in Governance, tags: adviser, advisor, advisory board, board of directors, CEO, chairman, coaching, consulting, director, Executive Coaching, Governance, Leadership, leadership assessment, leadership coaching, leadership development, leadership styles, Life Coaching, management assessment, non-profit, nonprofit, Personal Growth, spirituality, turnaround, Turnaround Management
Dr. Earl R. Smith II
DrSmith@Dr-Smith.com
www.Dr-Smith.com
My work with boards – both for-profit and non-profit – often involves an assessment of a search for new leadership. Strong, focused leadership is an essential part of any organizational success. This is as true for boards of directors as it is for senior management teams. Read the rest of this entry »
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Posted by Dr. Earl R. Smith II in Governance, tags: adviser, advisor, advisory board, board of directors, CEO, chairman, coaching, consulting, director, Executive Coaching, Governance, Leadership, leadership assessment, leadership coaching, leadership development, leadership styles, Life Coaching, management assessment, non-profit, nonprofit, Personal Growth, spirituality, turnaround, Turnaround Management
Dr. Earl R. Smith II
DrSmith@Dr-Smith.com
www.Dr-Smith.com
General liability insurance coverage will not cover claims for errors and omission and neither general liability nor errors and omission policies will cover mismanagement or director misconduct. Businesses operating without any one of these types of policies are seriously under insured. Boards of directors should provide errors and omission policies as well as directors and officers policies as a protection to the stockholders of the company, as protection from personal liability for themselves and as a tool for the Succession committee to use in the recruitment of new directors to the board. Most seasoned executives insist on being covered by directors and officers policies and errors and omissions policies prior to agreeing to serve on the board. No matter how much a person believes in the company, the organization or the strategic plan, they should not be asked to risk their personal assets in service to the organization. Read the rest of this entry »
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Posted by Dr. Earl R. Smith II in Governance, tags: adviser, advisor, advisory board, board of directors, CEO, chairman, coaching, consulting, director, Executive Coaching, Governance, Leadership, leadership assessment, leadership coaching, leadership development, leadership styles, Life Coaching, management assessment, non-profit, nonprofit, Personal Growth, spirituality, turnaround, Turnaround Management
Dr. Earl R. Smith II
DrSmith@Dr-Smith.com
www.Dr-Smith.com
Leadership is a critical factor in the functioning of a well-organized board of directors. Every board (organization) should strive to diversify the composition and have overlapping layers of expertise to call upon in any given situation. Good governance stresses the need for each director to attend seminars to enhance their leadership development skills. CEO’s engage their senior managers in one-on-one and peer-to-peer coaching programs to prepare for an orderly transition of power. Succession committees meet regularly to identify future talent and future skills the company will need to train or recruit for as the company moves through the business cycle. All of these efforts address the issue of leadership. Read the rest of this entry »
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