Dr. Earl R. Smith II

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

The corporate world changed significantly in 2002. Regulatory actions – including several successful lawsuits against sitting directors – have demonstrated that directors need to become more serious about the operations and management of the board. Under the Sarbanes-Oxley Act of 2002, a board of directors has explicit responsibilities for financial oversight, succession planning and other legally binding obligations for good governance practices. Boards of directors typically meet ten to twelve times a year. The meetings are the primary venue within which board members meet their responsibilities. Good corporate governance allows delegation to advisory boards or committees to conduct assessments, and offer advice and recommendations to the board as whole. Several key issues must be taken into consideration as the board considers such delegation. Continue reading “Good Governance and Delegation” »

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

Corporate governance is about leadership. Boards are composed of leaders, and in the normal course of their duties, directors will form friendships and working groups. The board Chairman has the responsibility for establishing working committees. This responsibility demands the Chairman pays particular attention to these informal networks. Informal networks are inevitable and good of the organization. However, if the Chairman is unaware or unconcerned with committee composition, informal networks can create serious problems for the board as a whole. Continue reading “Corporate Governance and Informal Committees” »

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

Work with boards of directors can bring up some complex issues and delicate balancing acts. One of the most challenging is the conflict between the drive for increasing profits and the social responsibility of the company – particularly if corporate activity produces negative impact on society or the environment. These challenges frequently present dilemmas for directors who have to make a fairly complex calculation in order to decide what is in the best interest of the shareholders. Continue reading “Corporate Boards in a Green World” »

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

In my work with boards of directors, I often focus on the need for leadership that engages over a wide range of areas and issues. A pro-active leadership assures that the board will live up to the terms of its fiduciary obligations to the shareholders. Often, a leadership assessment of the entire board – along with a board assessment – will establish a baseline of current capabilities and leadership needs and provide a program for improving leadership and the effectiveness of board governance. Continue reading “Board Governance – Engaging Leadership” »

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

Visionary boards of directors create governance models that fit the organizational needs of the company they govern. These boards are an ongoing source of new ideas and fresh evaluations of old ones. One of its principal roles is monitoring the results against the strategic plan and developing alternatives when performance is less than desired. During this process, the board conducts assessments to identify strengths, weaknesses, opportunities and threats. It compares results to industry standards. When necessary, it develops resources to help in this evaluation and planning process. Committees and advisory boards develop and submit for approval plans that address the issues raised by the assessments. Directors monitor these efforts, vote on the submitted plans and charge the CEO with carrying out the operational aspects of the plan. Continue reading “Visionary Boards of Directors” »