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We like to profile our members by showcasing their board experiences to help inspire and empower others on this board journey. We are grateful for our members sharing their board insights and experiences – thank you!
February 19, 2018
By Ellen Pekilis
Many women are reluctant to talk about themselves. What are the keys to presenting yourself in networking?
Organize yourself on paper and see what you’re good at. You should first do a SWOT [strengths, weaknesses, opportunities and threats] analysis. Target your strengths and find those that boards are really looking for. They have to be strengths that are true so you can believe in yourself. If not, you won’t be able to convince anybody else.
You don’t have to be good at everything, but you have to find the few things that you believe you are good at. Have examples of situations where you have used those qualities and experience to accomplish something.
How did you develop your elevator pitch?
Start with your SWOT and your board business plan. Assemble your strengths and board goals in a one minute elevator pitch. And then, practice it with your friends, in small groups where you know everyone. Just say it out loud. The first time I said my goal out loud, I said it at a breakfast: “I’d like to be on the board of a publicly traded company.” I was shy to say it because it sounded like I was bragging and trying to talk too much about myself. But I found that after saying it a few times, it’s just your goal and that’s it. You have to get used to it and you really have to believe in yourself.
What networking advice do you have for women who don’t have access to higher ranking mentors and only know people in their peer group?
Have a goal. Know where you want to be in five years to understand who you need to meet to get there. Then find events where you can meet people who do that job or have those skills.
Join LinkedIn groups which are about your topic of interest, your skills or where people you want to network with go and post comments. When you feel confident, write on that topic, so you start to get known.
When I go to an event like a seminar, I often am the first to get up, say my name and ask a question. People are often shy to ask the first question, which creates an opportunity. Of course, you have to have an intelligent question, but people look at you and then they know you. It’s easier afterwards when you are mingling because they remember you. That’s a very good networking trick.
At many events there is a table of honour where the most connected people are sitting. Once they get up, go up and introduce yourself and try and get their business card. Just say, “I’m so interested in this, I’d like to get your advice and maybe I could contact you and we could have a coffee. Would it be ok if I sent you an email?” They always say yes. They give you their business card and then you follow up with an email and build like that.
Many women start getting board experience at charitable organizations for which they have a personal interest. How do you leverage that experience to progress to a paid Board position?
Find a charity that you believe in but that also gives you some of the experience that you need. Two objectives for being on a charity board are: grow your strengths and develop your network. Some charities are focused on raising money for a cause. The board work involved in fundraising may be less like the work of a paid board. There are many other types of charities that allow you to give back to the community while developing your board skills. I was on the board of a charity for entrepreneurship.
Would you recommend cold calling a board member for advice as to how to get on a board? Has anybody ever cold called you, and how did you react?
It hasn’t happened. That’s interesting. It goes to your question of women being uncomfortable asking for what they want. Ask something that you’re comfortable to ask. Don’t ask for a job. Don’t ask for a board reference or help getting on that board from someone you don’t know. Ask for advice. That was my way of doing it. “Could I meet you, could I show you my resume, could I show you how I present myself? Can you tell me what you think? What events should I attend that would help me in my board career?” People always say yes to advice. That’s a good ask.
What closing advice do you have for women starting their board journey?
Know what you want. It’s the same thing as your career. What are you good at, what do you want and what makes you have fun?
Then, build your own network. I had an event last week with a women’s network that I started myself. I started it 20 years ago because I was working in financing. I needed to know people who knew about life sciences. I wanted people to give me advice. In my network there were not a lot of people like that. But I had a few friends, two other women. We each invited three other people that we knew, and we started a breakfast club. It was not formal or structured. I have kept that network alive for 20 years. Now it’s fun because we have known each other for so long. Some of the women now have very big positions so it’s nice to have them in your network from the beginning. So, you can start a network of women your age but from a different field. It’s a good way to grow your network and have fun at the same time.
January 12, 2018
By Ellen Pekilis
What key learnings about M & A governance have you taken from your experience working directly on the M & A team?
M & A is not a strategy. It’s a way to execute a growth strategy.
If you need to grow in that manner because organic growth is not achievable, not fast enough or you don’t have the necessary capabilities internally to enter a new market, then make sure you are ready for M & A. If you still manage your business by putting out fires, as part of the senior management team every day, then you’re not ready.
When I say, “be ready for M &A”, I mean:
- Have your infrastructure in place (operations, finances, HR, IT, policies and procedures, reporting) in place
- Know that it is scalable
That is the drum that I beat at the boardroom table.
How should the Board engage with senior management regarding a strategy that includes M & A?
Dialogue About Strategy
Have a much more open dialogue upfront about the strategy. What is the objective – is it growth, is it innovation? Is it entering a certain market or a new jurisdiction? What is the appetite for how you’re going to execute that? Individual directors may have personal sensitivities to jurisdictions; M & A or organic growth through R & D or exploration because they’ve had bad experiences or don’t believe those capabilities to critically assess opportunities exist internally.
Moving those discussions upfront could be done better. Have a dialogue around that. Are we on board with the strategy? How can we execute on the strategy? How does everybody feel about M & A vs organic growth or development? Do we have the capabilities internally to execute on one or the other or both?
Have a set of agreed upon criteria by which you will critically assess and rank opportunities so the management team can focus and prioritize. I understand nobody wants to be boxed in. Management may feel constrained by criteria, but criteria as a roadmap doesn’t mean you have to check all the boxes. It provides objectivity and ranks what is completely off or on the table.
What I’ve seen work is a Strategic Opportunities Committee of the Board that allows the Board to be a bit more agile and flexible in assessing opportunities as they are being considered by management. To get seven or nine people together to assess the opportunities is difficult. Waiting until management has done a lot of work to bring it forward to the entire Board could be wasted effort. So have those touch points of saying, “This one is of interest to us. We’ve done this much work on it; we continue to like it for the following reasons. Let’s take the temperature of the Committee on how people are feeling. Should we keep going or is there pushback?” That really helps provide clarity and direction. The Board needs to be comfortable delegating to three people out of nine. Make it inclusive – all Board members can come if they want. Nobody is excluded from the discussion, but we need to keep things moving. This helps facilitate a process that is easier to manage.
What are the roles & responsibilities of a Strategic Opportunities Committee?
I have been a member of committees or part of management that has dealt with committees that have had a broad written mandate approved by the Board. We discussed what criteria we were going to use, what are we good at and not good at (a SWOT on the company), what jurisdictions we are comfortable in, what jurisdictions we want to enter, what stage of projects or products. Generally, the criteria has been structured to provide management with quite a bit of flexibility.
When we have a Board meeting there is a list of opportunities that is maintained and ranked based on how many of the criteria are met and the likelihood of transacting. If the other side is only at 20% willingness to transact, then that opportunity may not be ranked #1 even if it meets all of the criteria.
As the opportunities get closer to being executable we are more involved depending also on the level of materiality.
Is the Board required to approve non-binding letters of intent (LOIs)?
I’ve insisted on it. I’ve come across management that have taken the position that if it’s not binding they don’t really have to get the Board’s approval of the LOI since the deal is subject to Board approval. Otherwise, will you go back and re-trade commercial terms in a letter of intent? At the end of the day that’s how you bring your experience to the table and ensure Board consensus and support for a proposed transaction.
How should the Board approach considering whether there is a good social or cultural fit with the target company?
On the social issues side, it is a hard issue. It’s important to have those discussions upfront with management. What is the company prepared to do to get a transaction done? If the target is insistent on not being 100% taken over; on some of their Board members or management team surviving, what does that look like? From our perspective, what are we willing to do to get something done?
Boards should have a real conversation around what a combined Board would look like. How many, who, why? What kind of capabilities do we need on the Board following the completion of a transaction and why? Who is going to be the Chair and why? Is the Chair ultimately willing to step aside, and the CEO and the CFO? Knowing where those sensitivities are is really important to determine up front. I’ve heard stories where major acquisitions did not take place because two or three people were not willing to step aside. It becomes about the personalities versus a discussion about what is best for the shareholders. Those are not easy discussions to have but one should have them.
In terms of cultural fit, in speaking to various colleagues, we are seeing more VCs and PEs add soft due diligence that includes culture, succession and engagement assessment before they advance funds so it is natural that this would form part of the due diligence. This is also a difficult issue particularly since many M & A discussions are confidential with a small group of people being involved in M & A within companies that transact so the ability to do this type of due diligence could be more limited. This does not mean that it should be off the table; more creativity is needed on how to assess it. A plan to integrate cultures or create a new one on the back of M & A is critical to have in place when the deal is structured, not after it closes.
Fariba Anderson, ICD.D
September 21, 2017
By Ellen Pekilis
Fariba Anderson, ICD.D, Board Director shares her views on the role of the Digital Director.
How would you define the role of a Digital Director?
The critical element of a Digital Director is an individual that knows the blind spot that the corporation is stepping through all the time. It’s someone who has that kind of integrative critical thinking. Somebody who has technology; somebody who is a woman — we are innately wired to think that way– those are the people that have the building blocks. I think that a Digital Director is a person that can help their other colleagues at the Board realize that the world of digital is not any different than the world of bricks and mortar.
What are the key digital questions that Boards should be asking?
The fundamental problem at the Board level is that the responsibility for digital issues is abdicated to the CIO. There is a saying, “I succeeded in spite of IT [Information Technology] and I failed because of IT.” It’s an auto-pilot switch that everybody has. The same way that people blame government for all their problems, they blame IT for everything that doesn’t go right. IT is no different than any other business line or function. I will share with you an example. Does anybody in their right mind say, ‘I don’t know about this expense I incurred. Can somebody figure this out for me? It’s really Finance’s problem that I spent this money’. Does anybody talk like that? The language cannot be articulated because it would be idiotic. How many times do you go into a boardroom or to an Executive Committee meeting and basically people say, ‘I have this IT system, I don’t know why it happened. I spent $100 million.’ Whose fault is it that this system doesn’t work? Such failures have nothing to do with IT systems. It has to do with a mindset that says, “I can abdicate responsibility to IT and walk away.” Every major digital investment that fails is because the Board and the Executive have put the responsibility on the shoulders of one individual, the CIO. That’s the fundamental problem.
What is the role of the Digital Director in raising general Board awareness of digital issues facing the organization?
Find a specific issue on the Board agenda when an opportunity arises. Use the opportunity, very concisely, very briefly, to introduce the concept that there is an aspect here for which the Board might need some education. Then resort to independent people to get the education. I think that you have to find a specific scenario to raise the topic. Avoid the soapbox. When you identify the issue, find out specific details so that you can say, “Oh by the way, I saw this and I’m a bit concerned. What do other people think?” Then read what the other Board Members say in terms of body language and tone of voice.
What critical skills do you bring to the Board as a Digital Director?
What I bring at the Board level is that I know we all have a blind spot. I probe the blind spot. As I got recruited and joined the roster of Boards, I became known as a Director who will always be probing the blind spot – what we don’t know. Because in my view, it’s not what we know, it’s what we don’t know. By the time we realize that, it is too late. The market opportunity is gone.
What were key steps on your path to becoming a Digital Director?
In the very early years of my career I couldn’t speak much English, so I became an expert in body language. That’s how I survived. Now we know that people do 90% of their communication through body language as opposed to words. I didn’t know it then, but that’s how I got around.
I did really well in the field of computer science because I connected the dots that nobody else could connect. I became really good at solving business problems with technology early on in my career. As a matter of fact, I joined the executive ranks of industry in my early 30s. That’s unheard of!
When I was CIO, I realized that I was missing business principles. That’s when I invested in my MBA at Rotman. At that time Roger Martin was developing the whole principle of opposable mind and integrative thinking. I got exposed to his early thinking and I tell you, this man rewired my brain. I realized that what I was doing intuitively through the school of hard knocks was a strategy. This is how people get ahead. There are a lot of people doing this. Everybody can tap into what I sort of got into as a matter of survival. People, especially women, can do this. Not everybody needs to go get their MBA, although I highly recommend every woman does that. It might not be feasible for everyone, but everyone can pick up a copy of Roger Martin’s The Opposable Mind.
What advice do you have for women who have the skills and desire to find a role as a Digital Director?
There is one step. Networking. Literally, stop going to your professional vertical. You are not going to get anywhere through your vertical. It goes back to the principle of having a blind spot. If there are a bunch of people that are exactly like you, that talk like you, that walk like you, then you are in a blind state. Start networking with people that there is no way on the face of the planet you would come across in your normal day.
Corporate Director and Board Advisor
Tamara Paton, Corporate Director and Board Advisor, shares her experience of serving on member-based boards.
Tell us about the nomination process of being elected to a member-based board?
I have served on three member-based boards: the CAA, Mountain Equipment Co-op and Meridian Credit Union. The experience varies across organizations. Some appoint directors, in the same way that corporate boards do. Others use board recruiters to help. For co-operatives, there is some degree of democratic process by ballot. Some boards will approve whether a candidate is on the ballot or not. Others are more open – even if you are a member of the organization, you can be on the ballot and campaign to be a member of the board. If you are interested in serving on a corporate board, a role on a co-op board is a great step.
Do you have term limits and can your term be renewed?
Every organization is different. For example, the CAA has a 12-year maximum. Board members can stay on the board as long as there were no issues. It is not competitive to keep your seat. At Meridian Credit Union, you can serve up to four terms of three years each. However, you have to be re-elected at the end of each term. Incumbents don’t have an advantage over newcomers.
Is there any unique governance process that you could share?
Member-based boards have similar processes as any other board. The work and fiduciary duties are the same. However, the role of feedback and director development is different. We really embrace peer feedback wholeheartedly. We sometimes sit with co-directors and give feedback and recommendations to each other. It’s a type of cross-mentorship that promotes professional development. At Meridian, we have a facilitator or advisor to help filter some of the feedback so it’s not so personal.
Do you get paid for serving on a member-based board?
The amount of compensation varies with each organization. Some don’t pay, and others do. Larger boards tend to offer more compensation. But you shouldn’t try to get on a board just for the money. Think about your purpose for serving and have a passion for the organization. It’s hard work, and you take on a lot of risk, especially with larger organizations or a regulated financial institution. You certainly need to be available for unexpected events and be ready to manage them.
Does your member-based board have diversity?
If you define diversity by ethnicity and gender, we are making good progress, but still have great strides to make. There is a trend towards increasing diversity, and thinking about how to build the pipeline of the next generation of board members.
Any board opportunity can be rewarding. Raise your hand before you feel you are ready. Give it a try and get started. Be ready to dive in and embrace the learning and the purpose of the organization. If you are a member, you are qualified to represent other members. Just go for it!
Chief Operating Officer, Smashblock Corporation
Corporate Director, Janet Cloud speaks about her experience while obtaining her ICD.D
Why did you apply for the ICD-Directors Education Program (DEP)?
I have been on not-for-profit boards for many years, and I wanted to transition to a corporate board. I always wanted to contribute and have an impact in the corporate world and I felt that a governance education would be a great starting point to prepare for being on a corporate board.
What key take-aways from the DEP have helped you in being an effective director?
During many of our classes we were given complex case studies and I was surprised at the number of times that each group came up with vastly different solutions for the same scenario. The course is good for broadening your awareness and learning what you don’t know. Also, we learn where to search for solutions when we don’t have any. Often there isn’t one right answer. We also gain an awareness of the process and duty of care and fiduciary duties. It’s really about due process and common sense when seeking to do the right thing.
Did you found it a great networking opportunity to meet senior executives and serving Corporate Directors?
Very much! I now have another 40 plus people in my network as I search for board opportunities. The course work was so intense, that it built a sense of camaraderie among us. We all got comfortable with each other, and started to feel more inclined to recommend you to others. The opportunity to learn from such competent people from all different backgrounds and industries was fantastic! I can’t recommend it highly enough.
Would you recommend this governance education program to aspiring directors?
Yes. ICD opens up doors for board opportunities, business opportunities and networking opportunities.
What is your plan to stay current on governance topics?
Organizations like ICD and Women Get On Board will be extremely helpful in that regard. They offer events where I can meet more people and hear their stories, as well as stay abreast of current trends. ICD also gives us access to literature for research and education. Rotman is another great source of education through their courses. Also, the boards that I’m currently associated with offer Board education.
President, Darling & Daughters Ltd.
Carol Darling speaks about her experience serving on an Arts board.
Why did you join Canada’s National Ballet School’s (NBS) board?
My daughter was a student at NBS, so I became familiar with the school as a parent. When my daughter graduated, I realized that I still had a passion for the institution. My career background is in TV broadcasting and I started thinking about how the ballet school could use media to extend their reach across the country. I approached the artistic director about using video and other media to gain exposure for the NBS. Ten years ago this was breaking new ground. She too had embraced this vision and asked me to become a volunteer. I was brought in for an interview and subsequently invited to join as a board member. This was an exciting opportunity to contribute my own business skills to make a difference in a wonderful Canadian arts institution, particularly in development of expanded strategic objectives.
What due diligence did you undertake to get comfortable joining the NBS board?
I set out to understand as much about the institution as possible. I had a lot of previous exposure during the time my daughter attended the school. I continued to learn about their particular bylaws, strategic planning activities, etc. It’s necessary to understand the mission and mandate of the organization, as this is a big part of being a board member. I had even more opportunities to learn once I joined the board because NBS provides orientation for new board members on an annual basis and a board member “mentor” which was very helpful in getting up to speed quickly.
What do you think is the value-add that you bring to the board?
The NBS board is made up of several different types of representatives. Some are senior executives from a variety of disciplines in the corporate world, while others bring a wealth of knowledge from the arts, education and fund raising worlds. I bring a corporate perspective with expertise in building strategic plans and leading complex initiatives from inception to completion. I also offer a perspective based on my knowledge of media technology. I have had the opportunity to contribute this expertise as NBS has developed new strategic plans and embraced several new international and national initiatives beyond the core professional dance and teacher training programs. I have had the opportunity to work in an advisory capacity with very talented staff in areas that they had not previously explored. Based on my previous experience in providing vision, building business plans, and dealing with the technology, I got to use these transferrable skills with NBS.
How have you managed the dual role as a board member having both fundraising and governance responsibility?
I see those two roles being intertwined in an arts organization. Assisting, wherever possible, in securing funds to support programs and initiatives is not in any way in conflict with providing good governance.
Board of Directors members have the fiduciary responsibility of governing in a sustainable manner by “ensuring the implementation of sound, ethical and legal governance and financial management policies and practice, as well as making sure the School has the necessary resources to advance its Mission”. Board members are seen as Ambassadors for the school and really set the standard for other contributors. Board members also actively participate in setting and supporting Strategic priorities.
For example, stemming from existing community programs and the vision to use new media to expand beyond the walls of the school, the NBS strategic priorities identified a key priority to “demonstrate dance’s relevance through community engagement”. To realize this strategic priority, NBS created a program called “Sharing Dance”, a multi-faceted program providing opportunities for youth and adults to get healthy, active and artistically engaged. It includes an annual classroom program that is being extended into schools across the country using e-educational tools, specialized health and wellness dance programs for the aging populations and freely available dance routines for participants to learn an annual “Sharing Dance Day” community performance. In collaboration with staff, precedent setting sponsorships have been secured, that had previously been unavailable to NBS. Being part of something from vision to reality and ensuring the necessary funds are in place are all part of the same package – and extremely rewarding!
What is unique to the governance structure of NBS?
As the discipline of governance has evolved, NBS has continued to embrace best governance practices and a structure similar to public corporations. While NBS is different than a corporate board because we don’t have accountability to shareholders, we are responsible to both private and government donors.
There may be more opportunities to impart advice by working more closely with staff and helping to open doors for sponsorships that goes beyond the standard corporate world. There are also wonderful events where you can participate behind the scenes, for example, at student dance performances. I feel privileged that I have been able to get involved on many different levels.
Principal, Corporate Oversight and Governance, CPA Canada
Gigi Dawe is a part-time faculty member at York University, for the Master’s of Financial Accountability Program. She teaches a course on Corporate Ethics. In this interview she speaks about some of the key issues to consider concerning ethics in Corporate Governance. In this interview, Gigi speaks about Corporate Ethics.
How do you define Corporate Ethics and how can organizations create best practices in Ethics?
There is really no narrow definition for Corporate Ethics.Companies need to balance doing good and making a profit and understand the two sides are not mutually exclusive.
There is pressure, internally and externally for corporations to demonstrate responsible decision-making. Corporations must continually assess how their practices enhance their ability to make a profit, while being sensitive to ethical concerns for consumers and stakeholders. They also need to see that socially responsible decisions create value for companies.
Who do you think are some of the players in Corporate Ethics and who is responsible?
Everyone involved with a corporation has responsibility for ethics.Shareholders, investors, boards, CEOs, executives and all other employees in an organization influence decisions. The board is in a position to question themselves’ and management regarding ethics and front line employees play a role with each decision they make or interaction they may have with customers.
All players need to carefully consider whether an action that is legal, is also ethical. There are two stages in that assessment. Is a decision simply amoral decision makers have not even considered whether an action is ethically right when making a perfectly legal decision. Or is a decision legal but immoral (unethical).
Do you find Corporate Social Responsibility is a topic for which boards have a good oversight role?
Yes. Boards play an important oversight role. Board members and senior executives are responsible to establish an ethical tone, so play a key role in influencing significant socially responsible decisions. The tone they establish will influence the type of decisions made throughout an organization.
However, no single committee or individual is responsible – we all are. Each party must take an active role in corporate social responsibility. It is not good enough to simply point fingers at the board, shareholders, the CEO, or front line workers, etc. We all must take responsibility for our socially responsible actions.
What are some steps that corporations can take to enhance good Ethical Behaviour?
Corporations need to have clear policies and an ethical tone. All senior and board level players should encourage asking the question”is this a good financial, legal and ethical decision?” It is also important that employees have a clear process to blow the whistle with no consequences for doing so.Otherwise people may be afraid to speak up. Corporations also need a process to engage with shareholders so they are hearing and responding to their views on issues.
What do you enjoy most about teaching Corporate Ethics to Master students?
I enjoy helping people to understand why corporate social responsibility and ethical decision making is important and that profit making and socially responsible decision-making is not mutually exclusive. Students are the future leaders of corporations. If we can convince them to ask the right questions and see that there are two sides to actions and decisions (profit and ethics) they will be more effective. I also enjoy the discussion and perspectives students bring to the table – just how much I learn from them!
Senior Partner at Global Governance Advisors
Paul Gryglewicz, Senior Partner at Global Governance Advisors, speaks about key elements of Compensation Governance.
What are some of the current aspects of the Human Resource Compensation Committee’s (HRCC) governance process you think is critical for a newly appointed director?
Any new director who has been appointed to the HRCC needs to get up to speed on the annual work plan the committee traditionally undertakes. This may include a one-on-one talk with the compensation committee chair and other board members who are decision makers along with the head of HR and CEO.
It’s important to understand how that particular board manages the compensation process in order to get a perspective about how the process works. The director should start by reviewing a typical employment agreement (at a minimum that of the CEO) to understand the legal terms of the contract and various severance arrangements that could be owed to executives.
It then builds into understanding how the annual bonus and equity plans work by reviewing those documents. A review of this information will provide a new director with better clarity on the goal setting, vesting conditions, and other compensation agreements currently in place.
What are some key fundamentals that directors should understand about total executive compensation design that are relevant in today’s market?
First, get a firm understanding of the compensation philosophy and what compensation components the organization offers to key executives. For example, are they getting an annual bonus, a long-term incentive or both?
Then, review how the HRCC has traditionally managed the annual process. If there is a bonus structure, is it discretionary or formulaic? Find out which performance metrics are used to measure performance. Also, compare how others in the industry reward for executives in similar roles.
Finally, do some research to find out how the stakeholder community perceives executive compensation at your organization and determine the disclosure requirements for the organization.
What is one tip you would provide when a board needs to hire an independent advisor on executivecompensation?
Boards should hire early in the fiscal year, so the advisor has the ability to understand the business and compensation strategy. During the hiring process, they should consider the characteristics of the individual. It should be someone who is forthright about recommendations, especially when there are tough decisions to be made. It’s also important for the individual to have extensive industry knowledge and be highly responsive, especially in demanding or urgent situations.
What are some good reference materials that directors should read to help them be current and be effective as a director in the area of executive compensation& CEO succession planning?
There is a lot of great literature on executive compensation out there in the marketplace. First off, a good daily read includes writings on what the media is saying about executive compensation. Get a sense for the pulse of the community in order to stay current on important topics and trends.
Secondly, seek out information published by associations. The Institute of Corporate Directors, The Directors College and/or Canadian Coalition of Good Governance publish a lot of thought leadership pieces related to compensation and succession planning. They offer a good balance of written material and also seminars that you can attend in person.
Third, look to professional services companies such as independent compensation advisory firms and law firms who often present a well-rounded perspective of the issues.
Last but certainly not least, it is also important to ensure an enriched annual education forum is provided to Human Resources Compensation Committee members – this can be done via a consultant coming in to do a custom education session or by attending some of the industry association events that may occur throughout the year.
What is one area in executive compensation that you think directors need to understand from a regulatory perspective?
Executive Compensation decisions need to be handled proactively. Best practice is to have the HRCC meet four times per year to review and discuss various compensation and human capital issues and continue that cycle in order to keep the information current. I would also highlight that if the HRCC gets the Corporate Secretary to minute all of the education events and conferences attended by each of the board members throughout the year, it provides good background to include as part of the annual circular (Proxy). This ensures that the board is prepared to explain the processes and activities as they happened, and also that information is reported accurately before too much time passes. Doing this presents well when the information needs to go into the public disclosure document.
The shareholder community has been on an escalating scale spending more time and attention scrutinizing board’s decisions on executive compensation, so it is critical the board understands who are the major shareholders and what are the proxy voting guidelines each follows. Directors need to be aware that “shareholder acceptable”decisions that were made 2-3 years ago may not be viewed as favourably today.
A good example of this is the emerging negative view the shareholder community is taking on “out of plan”awards (i.e. special bonuses, for the executive doing something extraordinary for the shareholders in a given year – such as a meaningful acquisition). Historically and to a certain extent today, boards would provide special incentives over and above the current compensation arrangements. These decisions are about to face more scrutiny of being acceptable coming into the 2017 AGM season.
In addition to this, the expectation that long-term incentive awards continue to adopt some form of performance conditions in order to vest is continuing to be reinforced through higher adoption of Performance Share Units (“PSUs”).
Want to learn more about Compensation Governance?
Women Get On Board in Partnership with Global Governance Advisors presents its inaugural Compensation Governance workshop. Register at http://bit.ly/WorkshopSept22.
Patricia McLeod, Q.C.
General Counsel, Ethics, Compliance and Corporate Governance, Corporate Director
Patricia McLeod talks about how she found her current board opportunities and shares some key factors for getting prepared for those roles.
How did you find out about your two most recent board appointments?
I heard about the elections for Calgary Co-op through its member communications newsletter and then again on the ICD postings. The Co-opboard of directors had done a board skills gap analysis and was looking for candidates with commercial legal background, financial literacy and real estate development experience, all of which I have. I saw the posting in September 2015, began the applications process and was appointed to the board in April 2016.
In respect of my recent appointment to the amalgamated Alberta Innovates board,January 2016, I was approached by a recruiting agency who was seeking names and interest for board candidates for the Alberta Innovates crown corporations. Someone in my network had shared my name with the recruiter.(I still don’t know who that person was.) This shows the value of networking!
How did you prepare for the board interviews?
I researched online to get a better understanding of the organizations. I found press releases, reviewed financials, and obtained as much information as I could from the recruiter (where one was involved). Recruiters make preparing for interviews much easier because they can give you background information such as the board’s timeline, hiring criteria and basic information on the board role. It’s also helpful if you can find out if the company is going through challenges or changes that would present certain challenges to the board or the organization in the near future. It’s also helpful to find out why they are recruiting a new board member – standard board succession planning or is there a specific need or skillset that is being sought. Another important factor to know is the time requirements to serve on the board, and being sure you can manage it within your schedule.
What are the unique skills/expertise that you feel contributed to your successful board appointments?
In addition to my legal career, I have significant compliance and ethics training, corporate social responsibility, and good government relationships. I also have skills and experience in governance, and working on boards that are in transition.
What was your due diligence process to determine if it would be the right fit for you to join these boards?
I was really reflective on what I was hearing in the interview. I paid close attention to what the recruiters and interviewers are focused on in the conversations. Ialso try to find out the relationship of the board to CEO and Management. I think about what type of board I want to be a part of and what value I bring to the table. Most importantly, I took my time to consider all the information, gathered through the interviews, my research and any red flags.
What are the top 3 tips you would recommend for women that are board-ready to help get themselves on a board?
1 – Know your value and articulate it well. Have your elevator pitch prepared. You have to be able to describe succinctly what value you bring to a board. Also, it’s very important to have a good board resume prepared and ready to share upon request.
2 – Most boards have a basic consistent set of skills requirements plus unique industry specific requirements. But if you are highly specialized, look for specific niche boards where your background fits that matrix and will showcase your value very well for that particular industry.
3 – Networking is everything! It’s always beneficial to be known for your unique skill set and interpersonal strengths. Boards will research to see if you are likable, trustworthy and good to work with.
Corporate Director, Enterprise Risk Management, M&A
Wendy Kei speaks about her transition from a Financial Executive in Mining to a Corporate Director.
How did you prepare yourself to transition from being a Financial Executive in Mining to a Corporate Director?
I began to prepare myself by gaining additional knowledge of what to expect when serving on a board, having sat on the other side. I did lots of online research into the different courses available, accessing different industries and sought out women role models to emulate. I had always wanted to serve as a Corporate Director post retirement, but the opportunity came much sooner. My transition happened very quickly because a board approached me for a directorship role and I was appointed last May.The timing of my transition was perfect, as this gave me greater flexibility to balance my work and family life.
What was the biggest challenge(s) you faced?
It was challenging to network outside my comfort zone of the mining industry and trying to figure out where to start. I wasn’t quite ready to invest in a formal governance certification program so finding the Women Get On Board network has been very helpful in making new connections. Another big challenge is that there is lots of competition for board roles from candidates who have more experience.
What skills/expertise do you find you are leveraging most to help you be an effective director?
I leverage on my breadth and depth of my experience having attended numerous audit committee and board meetings over the past 10 + years. Also having worked as a finance executive, I can relate to the management team much better as I have encountered a lot of challenging situations, so I had a good frame of reference for how to approach and evaluate unexpected events. I also find that I leverage my risk management skill set as this is crucial to any effective board.
How did you search for your current board you are serving on?
I was lucky enough that Guyana Goldfields approached me. They were looking specifically for someone who was female, with mining experience and also a CA. I met with the board and with the management team. In terms of researching a company, I recommend reading documents that give you more insight about the company. A great source of corporate information appears on the SEDAR website, which is accessible to the public. The AIF, Annual Information Form, provides the history of the company, information regarding the management team along with the corporate structure of the company. The Management Information Circular provides information on the composition of the board and their background. Finally, I read their annual reports and press releases.
What value-add do you bring to your current Corporate board that you are most proud of?
I bring strong ethics and corporate governance expertise to the board. My audit and financial background compliments my role as the chair of the audit committee and dealings with the external auditors. It is beneficial when you can speak their language.
Chief Encouragement Officer, FliPskills
Co-author of Leadership Is Half The Story: A Fresh Look at Followership, Leadership, and Collaboration (University of Toronto Rotman Press, 2015)
Samantha Hurwitz speaks about her experience of serving on a not-for-profit organization.
Tell us about the due-diligence process you undertook before you joined the Not-for-Profit you currently are serving on?
I am currently on the Canadian Association of Positive Psychology. Positive psychology is an emerging field all over the globe. CPPA’s mission is to strengthen the well-being of Canadians through education, research and events. I met the current President of CPPA at a weekend seminara few years ago before the association was formed. Then we reconnected and had lunch shortly after I moved to Toronto. I talked about building community and getting involved in board work. She told me that the CPPA board could really use a Treasurer. Months later, the CPPA board approached me, I expressed my interest, and was interviewed by the chair, vice-chair and most recent board addition. Essentially, they chose me and I chose them.
What factors helped you make your decision to join the NFP board?
I took time to reflect on what I personally looking to achieve in a volunteer board position so I knew what I was looking for. I was ready to dust off the skills I used to use as a Controller, I was inspired by Deborah and WGOB, and ready to begin on the path to a board career.
My decision criteria became:
- Values Match – Is this an organization that I have passion, curiosity, and alignment with mission?
- Skills Match – Do they need my skillset?
- Time Match – Can I manage the time commitment required?
- Goals Match – Can I make a significant difference within 3 to 24 months?
- Growth Match – Will I be able to hone the skills I need to?
What steps did you take to on-board yourself on the NFP board?
I had a 2-hour introductory meeting with the President and she gave me an overview of their operations and what was currently underway as priorities and issues. Then I reviewed their strategic plan, policies, by-laws, articles, and the last couple of board meeting minutes.I also reviewed their most recent P&L and all the details, and all the audited statements since inception. After that I met with the bookkeeper and the president, and asked lots of questions. Finally, I prepared a summary income statement in a different format that felt important with an 18 month projection, annual historical information, key other indicators (e.g. membership # by category), variances, ratios, etc.
Through this process I asked lots of questions, learned about the organization, its accounting systemsand financial control systems. I discovered areas for improvement and developed a new integrated financial management tool for regular board review.
Did the NFP have an orientation process for new Board members?
No, so Itook initiative to ask for specific things. Within a month or two, I had reviewed all the key records. You have to be able to spot opportunities and not just rely only on what people feed you. Step up, get involved and ask really probing questions. This is the skill I gained doing due diligence on mergers and acquisitions. The world is complex, not black and white – read between the lines in the grey areas to find relevant issues and opportunities. That’s a skill you need on a board.
What has been your most valuable contribution to the NFP board?
Bringing rigor and discipline to their processes – influencing the board to pay attention to what’s important not just what’s urgent. I have added lots of structure to a board that didn’t have very much at the time. Specifically, I’ve …
- Contributed to the development of strategies
- Revised key policies; such as a Code of Ethical Conduct and Conflict of Interest,to be plain language, customized, and easily accessed
- Developed and now chair a Governance Committee doing a By-law review, Job Family, Succession Plan, etc.
- Implemented new financial controls, monthly reviews and rolling projections
Looking forward, I plan to design and implement a performance evaluation process in 2016 for the board and all the senior management roles.There was a period of time when board members felt these changes were tedious but then they begantosee the benefits and how powerful it is to help movethe organization from reactive mode to proactive mode.
President, Murray Management Consulting Inc.
Laurel Murray shares her insights on what it is like to serve on a Crown Corporation Board.
How did you get appointed to a Crown Corporation Board?
While I was consulting, I had an engagement doing work with financial management practice, working with Dalton McGinty. They help with financial management and risk management. And they were looking for people with experience on Boards with good skills, and they also wanted to have diversity on their Board. I was invited to apply for this new role. They gave me an option of 3. I interviewed first with LCBO an got selected.
What is unique about serving on a Crown Corporation Board versus a For-Profit Board?
With respect to the LCBO, there are more similarities than differences. Commercial Crown has a very strong for profit focus. The Board of Directors has a fiduciary responsibility for governing the organization and has the authority to do so, similar to the private sector. Audit committees and HR committee are sub-committees of the Board of Directors. With respect to the LCBO, as in the private sector, the Board delegates authority to the Audit Committee for financial oversight. The major difference between a Crown Corporation Board and a for-profit Board,is with respect to the appointment of Board members.Unlike the private sector, where the Board nominates members for appointment, with the Crown the Board recommends names but the government, as the sole shareholder also nominates members and has the exclusive authority to appointment members to the Board.
What is the most significant contribution that you made while serving on the LCBO for 10 years?
I chaired the Audit Committee and enhanced the effectiveness of the committee during my tenure. I was the lead Board member in the review and recommended approval of the annual audited financial statements, the development of LCBO’s Enterprise Risk Management regime and the revitalization of the corporation’s internal audit function. As Audit Committee chair and the only professional accountant on the Board at the time, I led the oversight of LCBO’s successful conversion to IFRS.
What advice would you make about seeking Board opportunities for a Crown Corporation?
Determine what unique skills and expertise you have to offer and do research to identify provincial and/or federal Crowns where these skills and expertise may be of greatest benefit and where you have an interest. At the Ontario level, there is a public appointments secretariat that outlines all of the provincial Crowns as well as Board members and their related terms of service. Complete an application on line and look to follow up with the Secretariat. If you don’t have extensive skills and/or expertise, it’s often beneficial to seek Board experience on a not-for-profit organization to build up your experience. It also provides opportunities for you to network with others who can often be invaluable in recommending you for other Board seats.
What key learnings can you take from serving on a Crown Corporation and apply to a For-Profit Board?
I learned a tremendous amount during my time on the LCBO Board; both technical skills and experience through chairing the Audit Committee for a corporation with annual revenue in excess of $5B, and in the discussions and work of the full Board. I have learned that my financial expertise as a Chartered Accountant combined with my Audit Committee Chair experience and lead Board member in the development and oversight of ERM are additional learnings and expertise that are relevant to serving on a for profit Board.
If you are interested in finding out what Ontario Public Appointments are available, please visit https://www.pas.gov.on.ca/scripts/en/advertPositions.asp.
Interview with Violet Konkle, Corporate Director for Not-For-Profit and Corporate Boards.
Can you speak to your experience on a not-for-profit board versus a public company board? Are there differences?
Both types of boards take time, and are expected to provide thoughtful and insightful oversight, whether reviewing strategy or ensuring proper governance. It’s also important to understand that there will be a learning curve with both, so a proper orientation program is vital in both cases to ensure that the new Director ramps up as effectively and efficiently as possible. From a governance pointof view, a Director should not assume that there is a difference in terms of the duty of care expectations. As far as financial controls, risk management and payroll,good governance is always important. And ensuring sound strategy is imperative for both. And on both types of boards, ensuring strong CEO leadership and succession planning is the purview of the Board.
The main difference between not-for-profit and corporate boards is the type of stakeholder and regulatory obligations you must address. Oncorporate boards, you are responsible to the corporation and must consider the interests of all stakeholders. The shareholders in a not-for-profit are different, with donors replacing shareholders, but both expecting the board to act appropriately, representing all stakeholders.
One of the current hot topics on corporate boards is shareholder activism regarding executive compensation, ensuring executive compensation reflects shareholder returns and results.Not-for-profit boards do not experience the same level of scrutiny on executive compensation, but a frugal culture around administrative cost controls is important to ensure that donor funds are directed to the work of the not-for-profit. So the budgeting and cost control disciplines required of a corporate board apply to not-for-profit boards as well. In not-for-profit boards, Directors are still expected to hold management accountable as good stewards of the funds managed.
What attributes/skills do you bring to a not-for-profit experience?
When I joined the board of Habitat for Humanity, they wanted someone with retail experience who had experience in the role of a CEO. They also needed someone with experience with HR and compensation. Based on my skill set, I have also provided strategic insight into the Restore business, which is the Habitat retail outlet. I also served on the Risk Assessment Committee, as Health and Safety governance is an important element for Habitat for Humanity building sites. And I am currently on the Finance Committee.
What attributes/skills do you bring to a public company experience?
The governance committee on Boards will typically prepare a matrix of board membership requirements and highlight the skills and experience of current Directors. This will identify the gaps and help to hone the search criteria for new Directors. All corporate boards require strong, independent financial backgrounds for the Audit Committee, and typically operational and/or general management experience for the Human Resources and Compensation committee.
I asked myself what I could do to add value based on the board needs at the time. I had leadership experience as a CEO and could bring real life operational context to the board. An additional strength was that I understood retail and logistics/supply chain environments.
Are there any tips you would to share our Women Get On Board members to help empower them in seeking out board roles?
Think about what your passions are and where you believe you could add value. Also consider whatboards interest you and then do some research to assess their likely needs relative to your strengths. See who is currently on the board where you might fit well with your particular skill set. You can even call the chair and put forward an expression of interest.
As you look at the matrix of board member requirements, bear in mind that industry knowledge and general executive leadership are important backgrounds to bring to the board table. Sometimes there’s a reluctance on the part of women to take on senior general management leadership roles. Don’t be afraid to get into the heart of the business to develop your skills. There is definitely a need for more women of those capabilities to serve on boards. As you build your toolkit and capabilities in readiness to serve on boards, don’t be shy about asking for these senior general management roles. Some roles will be tough, but we should be bold and give ourselves permission to go after those roles.Done well, they can be immensely gratifying. Consider the “art of the possible” and be prepared to take the risk to go after it. Do it with confidence and conviction and know that it can be done so you can be a role model to others!
Silvia Montefiore shares her insights on serving on Hospital Boards.
Tell us about your experience on serving on a hospital board and what committees do you serve on?
Silvia: I’ve been serving on the board of William Osler Health Systems for three years. This health system includes Etobicoke General Hospital, Brampton Civic Hospital and Peel Memorial Hospital (under construction). I currently serve as Chair of the Resources Committee, which is similar to an Audit Committee. Some of the responsibilities on this committee include reviewing the financial statements and related financial reports, including the capital and operating budgets, and recommending them for approval by the board, reviewing the capital projects such as building the new hospital and upgrading Etobicoke General, including reviewing the related financing arrangements and overseeing the work of the auditors.
What type of due diligence did you do to determine if you had the capacity/skills and commitment to serve on a hospital board?
Silvia: I met with two members of the governance/nominating committee of the board, as well as the CEO and board secretary. I asked lots of questions about the time commitment required and the amount of involvement required. I also spoke with other KPMG partners who serve on hospital boards to find out what I should expect. Since I didn’t have any previous experience in healthcare, I was prepared for a huge learning curve. However, I was willing to take on the challenge and learn the issues in this field.
Do you have to fundraise in your role as a member of the hospital board?
Silvia: We have a separate foundation with its own board that takes care of fundraising. Most hospitals are structured this way. I don’t serve on that board, but I do get involved in other ways. There is an annual fundraising concert where KPMG is a sponsor. That’s a big part of our contribution.
How long is your term on the hospital board? Is there a succession plan for your replacement on the board or committees you serve on?
Silvia: Our board members typically serve three consecutive terms, and each term is two years. Part of the succession plan is to ask each member on the board if they have anyone in their network that would be a good candidate. It’s also important to ensure diversity of its Board members, and to ensure a balanced representation of board members who live in Etobicoke and Brampton/Peel. The nominating committee handles most of the work of finding new board members.
What is the one take-away you would like to share that you learned about serving on a hospital board?
Silvia: Don’t underestimate the amount of time required, especially when you’re also working full-time and it’s an industry which you may know little about. Be prepared for the time commitment. There are regular board meetings to attend, plus several sub-committee meetings and meetings with certain executives to prepare for each board meeting. Also, you may be required to attend certain community events and ceremonies.
Overall I’ve found my experience working on a hospital board to be really rewarding. It’s great to know that I’m helping to improve the quality of healthcare in my community.
It was a bittersweet day this past September 12th, as I sat in my last board meeting for CODE in a meeting room in Ottawa.
CODE is Canada’s leading international development agency uniquely focused on advancing literacy and education in some of the world’s regions in greatest need. I was asked to join the board in 2007 as I brought a diverse skillset to the table including governance and not for profit experience. Being bilingual as well as a woman were two additional points in my favor. I felt honored to be a part of such a fascinating organization and such an impressive group of talented people. The work that CODE does is unique as a Canadian NGO and also as an international development agency. Its innovative approach: ‘Reading CODE’ is to work with local teachers, librarians, writers, and publishers to support and sustain the development of literacy learning in K-12 schools in Africa, the Caribbean and now in Canada with the a literary book prize for First Nations, Metis and Aboriginal communities (it is worth checking out their programs here: www.codecan.org and supporting their work).
I became Chair of the Governance and Nominations Committee shortly after joining the board, then Vice-Chair in 2011, Chair of the Board in 2012-2014 and was Past-Chair for 2015. I continued with my role on the Governance and Nominations committee throughout, where I instigated a number of new initiatives and changes to improve the organization’s governance processes, including a review of the governance structure, overseeing CODE’s compliance with the new Canada Not For Profit Corporations Act, revising the board terms of office, creating a board matrix and a new board recruitment process, and instituting an executive rotation (Chair, Vice-Chair, Past Chair). I also co-created a new event for CODE in Toronto with a close friend, the Read Africa Ball, which was held three years in a row to fundraise and ‘friendraise’ for the organization. An event that we are in the process of re-inventing for better impact.
My proudest moment with the organization was an opportunity to go to Africa and to represent CODE in Senegal (the country where I spent most of my childhood). Once there I visited some of the schools in their program with their partner organization on the ground as well as their Ministry of Education to promote CODE’s approach and impact on teacher training. The reception we received at the schools made me feel like a rock star. My fellow travelers, another board member, a CODE staff member and I were swarmed by beautiful children smiling, laughing and chanting. In one of the more remote schools (4 hours outside of the capital of Dakar), we were gathered in the school yard with all of the teachers, children, principal and some parents, where they held a welcome ceremony in our honor and sang the national anthem… which I was still able to remember well enough to sing along to. It was probably one of the most touching moments I have ever experienced.
It’s one thing to sit in a boardroom in Ottawa, overseeing a strategy, a budget and a work plan, but entirely another to experience firsthand the impact that CODE has on so many children, teachers and publishers on the ground. The impact it had on me was profound, as well as the impact on my perception of the organization and the incredible work it does. It made me proud to be even a small part of what this Canadian NGO has created. Being on a board is so much more than attending meetings. I believe that it is important to become a part of an organization, to embrace its culture, its mission and what it stands for and to have passion for what it creates, in order to be an effective and valuable board member and a contributor.
Sharon Ranson is one of our Corporate Director Members and President of The Ranson Group – Executive Coaching Boutique. Sharon shared advice and insight on how to transition smoothly into your role on a Board.
What tips could you share with our members that helped make your transition from being an executive to leading and serving as a Corporate Director?
Sharon: It’s really about developing your network, meeting people, and hearing about opportunities. Try to think of the skills you have that are relevant to the board that you want to join. Then package those skills in a way that will allow boards to see your value.
How do you mentor and support other women who are on Boards?
Sharon: I spend time developing relationships with other women board members and get to know them as individuals. Sometimes that means asking them out to lunch and talking about where they are and what direction they want to take. Networking and making introductions is also important. I believe women need to support each other.
Do you take time outside the Boardroom to get to know the senior management team? If so, describe the unique contributions you have made.
Sharon: In life, there are a lot of things you can delegate, but you can’t delegate relationships. I spend time getting to know the senior management team at dinners and other events. I take a personal interest in the people I work with. Inside the boardroom decisions are formalized, but outside the boardroom is where you cultivate relationships.
How do you ensure you use the “Nose-in, Fingers out” policy as a Corporate Director?
Sharon: It’s important to remember that you are not on the board to run the business, just to oversee it. However, there are times when you need to roll up your sleeves and get involved when the organization doesn’t have enough support to make things happen. The biggest challenge is to strike a balance.