Dr. Earl R. Smith II

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.

CEO involvement in succession planning is a delicate dance. Too much and the process clogs up – too little and it can go seriously astray.

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 have become much more substantial lately.

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.

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.

Investors and shareholders need to make sure that major business risks are covered. Failure to do so can result in major losses.

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.

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.

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.

Board of director responsibilities are increasingly being scrutinized in the face a new round of financial mismanagement and high profile corporate failures.