Executive and Team Coaching, Leadership Coaching, Mentoring - Strategic Planning - Board Service

Officer and Director Vetting

 Governance  Comments Off
Nov 232008
 

Dr. Earl R. Smith II
Managing Partner, The Federal Circle
DrSmith@Dr-Smith.com
Dr-Smith.com

Historically, the process of selecting and vetting candidates for board of directors membership is one of those areas where many companies came up short. Some picked from a narrow range of friends and associates. Others outsourced the process to a recruiter. Few preceded the search and selection process with a board assessment. Much of that is changing in this post-Sarbanes-Oxley world. Continue reading “Officer and Director Vetting” »

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 Posted by Dr. Earl R. Smith II at 10:41 AM

Non-Profit Board Member Selection – Excellence Breeds Excellence

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Nov 222008
 

Dr. Earl R. Smith II
Managing Partner, The Federal Circle
DrSmith@Dr-Smith.com
Dr-Smith.com

Every company and every organization should have a highly skilled and engaged board of directors. This is true for both for-profit and non-profit organizations. Non-profit organizations often make the mistake of believing they are lucky to have anyone at all to donate their time and expertise to serve on their board. Continue reading “Non-Profit Board Member Selection – Excellence Breeds Excellence” »

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 Posted by Dr. Earl R. Smith II at 11:50 AM

Errors and Omissions Insurance – Necessary Protection of Officers and Directors

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Nov 212008
 

Dr. Earl R. Smith II
Managing Partner, The Federal Circle
DrSmith@Dr-Smith.com
Dr-Smith.com

One area of my work that has gotten a lot more attention since 2002 is the question of exposure of directors to liabilities arising from their board service. Most serving directors realize that managing this liability is only partially under their control. Certainly, they can be sued for neglecting their responsibilities to the shareholders – and minority shareholders are much more aggressive these days. However, they also incur risks for the actions – or lack of actions – of the management they are supposed to be overseeing. Some of these risks – but not all – can be mitigated with the proper insurance. Continue reading “Errors and Omissions Insurance – Necessary Protection of Officers and Directors” »

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 Posted by Dr. Earl R. Smith II at 10:36 AM

The CEO’s role in board member selection

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Nov 192008
 

Dr. Earl R. Smith II
Managing Partner, The Federal Circle
DrSmith@Dr-Smith.com
Dr-Smith.com

Sarbanes-Oxley and the rules reflected by the Security and Exchange Commission and most stock exchange listing rules, have redefined what good governance practices look like. Succession committees, nominating committees and audit committees have begun to exercise greater authority in governance practices of a company. Many functions traditionally carried out by the CEO have been shifted to the various committees. Committees now review and provide recommendations to the full board which then delegates the authority to the CEO to act on behalf of the board. This may seem like a minor change, but board members now understand they will be held accountable for the actions of the board or for the actions of the CEO. They are now taking their job of recommending actions much more seriously. Continue reading “The CEO’s role in board member selection” »

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 Posted by Dr. Earl R. Smith II at 10:01 AM

Non-profit Boards – Supporting and Governing

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Nov 182008
 

Dr. Earl R. Smith II
Managing Partner, The Federal Circle
DrSmith@Dr-Smith.com
Dr-Smith.com

Non-profits corporations are often the governance model used to address community-based problems. Non-profit boards are often composed of community leaders with a common goal of eradicating issues affecting the quality of life in their community. Boards of directors of these organizations serve as supporters, fundraisers, officers and staff members of these critical organizations. Boards of directors of non-profits must find ways to establish missions, map strategies, demonstrate fiduciary compliance, and provide oversight for the organization with a goal of supplying the maximum funds to carrying out the organization’s mission. Continue reading “Non-profit Boards – Supporting and Governing” »

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 Posted by Dr. Earl R. Smith II at 9:18 AM

Determining Board Compensation Structure

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Nov 162008
 

Dr. Earl R. Smith II
Managing Partner, The Federal Circle
DrSmith@Dr-Smith.com
Dr-Smith.com

A board’s primary responsibility to the shareholders of the company is to protect and enhance the value of the shareholders interest in the company. This responsibility has not changed with the business environment today’s boards operate in, however the work boards engage in and the scrutiny directors now fall under has changed drastically. Sarbanes-Oxley ensures that directors now face legal consequences for board decisions as SOX attempts to codify good governance policies. Corporate governance demands more from directors than ever before, while at the same time a negative wind blows against the compensation levels directors enjoy for their services. As part of governance activities, boards assess compensation policies, set benchmarks for the level of director compensation and document its method for future compensation assessments. Continue reading “Determining Board Compensation Structure” »

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 Posted by Dr. Earl R. Smith II at 10:40 AM

Good Governance – Minority Board Service

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Nov 152008
 

Dr. Earl R. Smith II
Managing Partner, The Federal Circle
DrSmith@Dr-Smith.com
Dr-Smith.com

Minority corporate directors play an important role in leading companies. Each minority board member brings something different to the board. Hiring committees should consider the skills and background the director brings to the board. Is should also assess how the prospective director’s leadership style will affect board dynamics. As with many other high-level positions, increases in minority representation in the boardroom has been slow, but it is improving as minority members prove their value Continue reading “Good Governance – Minority Board Service” »

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 Posted by Dr. Earl R. Smith II at 11:15 AM

Good Governance – Balancing Eight Key Factors

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Nov 142008
 

Dr. Earl R. Smith II
Managing Partner, The Federal Circle
DrSmith@Dr-Smith.com
Dr-Smith.com

Boards operate in complex environments that require them to balance a wide range of issues and challenges. Their charter – to preserve and extend shareholder value – might sound simple enough but the pursuit of that objective can quickly bring on some very complex questions. Continue reading “Good Governance – Balancing Eight Key Factors” »

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 Posted by Dr. Earl R. Smith II at 1:45 PM

Board Compensation – Cash versus Equity

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Nov 132008
 

Dr. Earl R. Smith II
Managing Partner, The Federal Circle
DrSmith@Dr-Smith.com
Dr-Smith.com

Some of my engagements are with start-up and middle market companies that are experiencing very high growth rates. These companies face a challenge in recruiting high-quality directors. The combination of risk (the exposure of board service is much higher these days) and limits on the types of compensation available, make the search particularly challenging. Such companies are generally limited in their options. The most logical alternative is equity as compensation. Continue reading “Board Compensation – Cash versus Equity” »

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 Posted by Dr. Earl R. Smith II at 10:59 AM

Non-profit Board Governance Models

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Nov 122008
 

Dr. Earl R. Smith II
Managing Partner, The Federal Circle
DrSmith@Dr-Smith.com
Dr-Smith.com

Demands on non-profit boards are greater today than at any time in recent history. Scandals at venerable organizations coupled with apathy and difficult economic times make fund raising and funding streams uncertain. Boards of directors must constantly assess priorities in keeping with corporate ethics. Charitable organizations must insist upon a transparent governance model that keeps donors informed and recipients needs confidential. Continue reading “Non-profit Board Governance Models” »

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 Posted by Dr. Earl R. Smith II at 11:12 AM
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