Dr. Earl R. Smith II

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

One of the areas that I work with boards on is crisis management. Boards have a responsibility to develop and promulgate plans to mitigate the risks of crises developing. They also need to develop and put in place protocols for managing crises when they occur. This responsibility arises because of the board’s fiduciary responsibility to the shareholders. Continue reading “Governing in a Crisis” »

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

Board member selection is one of the most important aspects of ensuring a continued high level of professional governance and leadership by a Board of Directors. Boards with established Nominating and Governance Committees should delegate to these committees the duty to screen and select candidates to present to the full Board as seats on the Board become open. The committees should also prepare and periodically review skills sets and attempt to identify the future skills sets the board will need to carry the company into the future. Continue reading “Good Governance – Board Member Selection Criteria” »

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

Some of my work with boards focuses on risk management. This attention to risk has intensified and diversified since the passage of Sarbanes-Oxley. Directors are now assessing both corporate and personal risks and sometimes the calculations become complex and conflicting. Some recent court cases have highlighted the increased exposure of directors – particularly if they are less than diligent in fulfilling their responsibilities to the shareholders. Directors who align too closely with the interests of management now do not have the effective cover that they once did. D&O insurance is no longer adequate as carriers decide on the risks that they will and will not cover. I always counsel prudence and the development of a risk management strategy that will serve the shareholders and protect the directors. Continue reading “Governance and Risk Management Strategic Plans” »

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

Diversity is a buzzword when it comes to board population and the trend towards minority board membership seems to be gradually increasing. There are consultants who specialize in bringing minority members to companies with the proposal that diversity is a corporate obligation. Most of these consultants focus on either race or gender. My work with boards has led me to a conclusion about this trend. Continue reading “Board Diversity – A Subtle Challenge” »

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

One of the challenges facing any board of directors is to manage the inputs from sources outside the board and maintain a deliberate process that focuses on protecting and extending shareholder value. Even boards of smaller companies face this challenge. Some of the inputs may come from advisers and consultants. Other sources include the media, industry news, communications about or from competitors, company management or employees, major shareholders and the network of connections that each director maintains. Much of this information is extremely valuable and should be included in board deliberations. The trick is to balance it with the deliberative process and maintain focus on the board’s fiduciary responsibility to the shareholders. Continue reading “Managing External Influences on Governance” »