Way back in 2006 we also urged readers to get cracking on making all their Board materials available to Directors over the internet, in a secure environment…and at long last, as noted above, this has been gaining major traction.
Another indispensable service in our book is to get some expert, outside assistance when it comes to evaluating the effectiveness of board committees – and of directors themselves – which stock exchange listing requirement require boards to do. Not so long ago, most such programs were administered internally – maybe with the assistance of outside counsel – and mostly in a very general, ‘check-the-box’ kind of way. Lately, the ante has been going up big-time – as public companies are increasingly eager to prove to activist investors that they have very rigorous evaluation, re-nomination and ‘director refreshment’ programs in place.
There are tons of people who are eager to help here – with everything from designing questionnaires and summarizing the findings, to conducting more probing one-on-one interviews and doing peer reviews on each individual director. So finding and using an outside provider to deal with such touchy and intimate subject matter is one of the trickiest things a corporate officer is ever called on to do.
Our advice: Do not consider anyone who has not spent considerable time in and around board rooms, or anyone whom a director would not consider to be a “near peer” in terms of their general knowledge, and their business and life experiences.
Do not pick anyone who is not a true expert on the kinds of issues facing board members in today’s environment.
Do not pick anyone who comes across as pompous, or full-of-themselves, or worst of all, as a smarty-pants. The best candidates will be the best listeners. Above all, the “chemistry” needs to be exactly right for your corporate culture – and for that of your board as a whole: The career consequences of picking a dud to put before your board are too horrible to contemplate. We have a handful outstanding providers of services like these in our Directory.
Smart corporate citizens are also looking, increasingly, to bring in outside experts for brief sessions on hot-topics du jour: To provide a big-picture update on emerging corporate governance issues – or on cyber-security, for example. (Most directors much prefer brief and highly customized presentation to those at all-day or multi-day “Directors’ Schools.”) In our 1st quarter issue, we proposed a brief pre-annual-meeting info-session for directors and senior officers on the many changes in voter demographics and voting dynamics, on the mechanics of proxy voting (which most directors do not understand at all) – and on the importance of voting their own proxies – which many senior officers and directors fail to do.
When it comes to potential presenters to the board, we’d offer the same advice about ‘facilitators’ as we did in the previous paragraph.