Dr. Earl R. Smith II
Managing Partner, The Federal Circle
DrSmith@Dr-Smith.com
Dr-Smith.com
Boards of directors have the responsibility of preserving and extending shareholder value and holding the CEO and management team accountable for developing and deploying strategies to deal with a dynamic market. Smaller corporate governance often overlooks a very important part of this responsibility – risk governance. Continue reading “Risk Governance – Managing Safe Companies” »
Dr. Earl R. Smith II
Managing Partner, The Federal Circle
DrSmith@Dr-Smith.com
Dr-Smith.com
The Nomination committee advises the board of directors regarding new board members. It has the power and authority to change board composition which in essence will change how the board functions as a unit. The Nomination committee must work year round with regular meetings, necessary resources and members with insight into how the board works. Continue reading “Nomination Committee Strategies” »
Dr. Earl R. Smith II
Managing Partner, The Federal Circle
DrSmith@Dr-Smith.com
Dr-Smith.com
Task oriented directors are very focused and committed to reaching the goals and objectives set out in the corporate strategic plan. These directors are very detailed oriented in defining the steps necessary for corporate management to undertake to reach their objective. Boards need task oriented members to function at very high levels with a tight focus on the goal. Continue reading “Characteristics of a Task Oriented Director” »
Dr. Earl R. Smith II
Managing Partner, The Federal Circle
DrSmith@Dr-Smith.com
Dr-Smith.com
Directors and CEOs alike want extraordinary results from their company. Inspiring leaders lead people, managers manage employees. Leadership development entails learning to inspire ordinary people to achieve extraordinary results. Continue reading “Inspirational Governance” »
Dr. Earl R. Smith II
Managing Partner, The Federal Circle
DrSmith@Dr-Smith.com
Dr-Smith.com
Director and Officer Insurance (D&O) was first introduced to the market to cover directors and officers of for-profit corporations, and unlike general liability insurance standard language is generally not available. The issue of determining what cover is actually provided is a difficult task unless the customer has a basic understanding of the particular language and the specific use is has in the insurance business. There is a wide variety of policies available, but a non-profit organization should look for the following distinctions which make some policies far superior to others. A detailed assessment of individual polices with a trusted insurer will reveal the following coverage distinctions: Continue reading “Non-Profits – Director and Officer Insurance” »
Dr. Earl R. Smith II
Managing Partner, The Federal Circle
DrSmith@Dr-Smith.com
Dr-Smith.com
Non-profit boards of directors are rarely compensated for their governance. However, the practice is growing, slowly, due to the increased demands, increased regulations, and greater financial oversight responsibilities of non-profit board members. Boards of directors should review their mission and the time commitments expected of board members. The single biggest factor a board should consider relative to director compensation is whether any amount of compensation will increase the effectiveness of board governance. Continue reading “Non-profit Board Compensation Practices” »
Dr. Earl R. Smith II
Managing Partner, The Federal Circle
DrSmith@Dr-Smith.com
Dr-Smith.com
Few decisions made by a board can alter the functionality of a board more than new board member selection. The Nominating committee is one of the three most powerful committees a board usually establishes in the course of normal business. The Nominating committee must consider a candidate’s business affiliations, business experience, educational attainment and leadership style during the interview phase of the vetting process. The board of director’s duty is to the shareholder and to returning acceptable returns in the form of long-term value. New board members should assure the Nominating committee of their commitment to the organization’s corporate ethics and strategic plan, as well as, their loyalty to the organization itself. If a candidate has other loyalties of more importance, the Nominating committee should be comfortable with the arrangement or not recommend the candidate to the full board. Continue reading “New Board Member Selection” »
Dr. Earl R. Smith II
Managing Partner, The Federal Circle
DrSmith@Dr-Smith.com
Dr-Smith.com
Errors and Omissions insurance has been popular since the 1960’s and covers mistakes, wrongful acts, acts of negligence on the part of a company with respect to products and services and extends to contractors performing services on behalf of the policyholder as well. Boards of directors and corporate officers and management have a duty to protect the company against lawsuits, frivolous and otherwise. Errors and Omissions insurance is a prudent measure. However, with the explosion in lawsuits against companies, especially in the era of mega awards by juries, additional measures are needed to protect board members. Continue reading “Directors and Officers Insurance” »
Dr. Earl R. Smith II
Managing Partner, The Federal Circle
DrSmith@Dr-Smith.com
Dr-Smith.com
Corporate governance is the subject of many books and seminars. Every expert has theories to enhance performance and to take the board to the next level. Many of these proscriptions are convoluted and extensive. However, there are some very practical ways boards can effectively manage their responsibilities, and still improve the performance of their board and boost the confidence shareholders have their company. Continue reading “Practical Governance Practices” »
Dr. Earl R. Smith II
Managing Partner, The Federal Circle
DrSmith@Dr-Smith.com
Dr-Smith.com
Companies must have professional governance to operate in the complex business and corporate finance environment prevalent in today’s business world. This is true for privately held companies as well as publicly traded ones. The question is one of risk mitigation as much as regulatory compliance. Corporate directors must have a working knowledge of Sarbanes-Oxley, compliance management, corporate finance and must demonstrate personal leadership, and a willingness to comply with corporate ethics. In return, directors must receive appropriate reimbursement for their performance. Continue reading “Some Notes on Board Compensation Norms” »
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