8 Components that Impact Board Effectiveness

1

Analyze Current Board Functioning

Board Action Plan

BoardComposition

BoardLeadership

BoardDynamics

Board Agendas and Meetings

BoardInformation

Board/ ManagementRelationship

Board Committees

Board Processes

Source: Great Companies Deserve Great Boards: A CEO’s Guide to the Boardroom, Palgrave-Macmillan, 2011

Agenda Magazine 2011 Survey of 770 directors

How effective do you consider your board evaluation process?

Have you changed your board evaluation process in the past 2-3 years?

31%

Board Engagement in Strategy

SWOT(Strengths,

Weaknesses,Opportunities,

Threats)

Strategic Alternatives

Strategic Choice

StrategyImplementation

Educating the board about key businessfactors

Where most CEOs

Engage their Boards

On Strategy

Optimal Point to

Engage Board

On Strategy

Appendices

5 Hallmarks of a High-Performing Board

1. When you ask the CEO and executives how the board about the board’s most significant contributions – how the board really adds value for the company – they reply positively and can give 2-3 specific and substantive examples.

2. When you ask the board members the same question, they can also provide 2-3 specific and substantive examples.

3. When you ask board members if the board can improve in any way, they can give you at least 2-3 ideas for further improvement – high performing boards become that way through a mindset of “continuous improvement”.

4. The climate of the boardroom is one of vibrancy, energy – good give and take on important issues impacting the company

5. The performance of the company – financial, operating and strategic performance – is strong. A high performing board ultimately guides a company to increased value for shareholders.

5

How Satisfied are You With??

15%

50%20%

Source: PWC 2011 Study of approx. 800 US public company board members.

# of Outside Directors with Industry Knowledge: Top 100 CDN Companies (Spencer Stuart 2011 Board Index)

Board Composition: Amazon.com

Name Age Tenure

Boards

Experience/Background

A. Monie 61 4 2 CEO Ingram Micro; formerly Pres. of Ingram’s Asia/Pacific Region based in Singapore

B. Kirkorian 44 1 1 Co-founder of digital TV tech firm (SlingMedia)

J. Gorelick 61 0 2 Former Deputy US Attorney General

J. Bezos 48 18 1 Chairman and CEO; founder

J. Seely Brown 71 8 3 Former Chief Scientist, Xerox.

J. Rubinstein 55 2 1 SVP Product Innovation, Hewlett-Packard; former CEO, Palm (acquired by HP)

P. Stonesifer 55 15 1 Former SVP, Interactive Media Division, Microsoft

T. Ryder 67 10 4 Former CEO, Readers’ Digest; Chairman, Virgin Mobile

T. Alberg 72 16 1 Lead Director; Managing Director, venture capital firm investing in tech companies

Wm. Gordon 62 9 2 Founder, Electronic Arts; Partner, Kleiner Perkins

8

Board Composition: Intuitive Surgical

Name Age Tenure

Boards

Experience/Background

A. Levy 74 12 1 CEO, Incline Therapeutics; co-founder and CEO Northstar Neuroscience

A. Johnson 59 2 1 CEO, Market Tools (software services)

C. Barratt 49 1 1 CEO, Antheros (semiconductors); co-inventor of many US patents in wireless communications

Dr. F. Loop 75 7 2 Retired CEO, Cleveland Clinic ; cardiac surgeon

E. Halvorson 62 9 2 Lawyer; former COO, Salem Communications

G. Guthart 46 12 2 Chief Executive Officer. Part of core team who developed computer-enhanced surgery at Stanford

G. Stalk 61 5 1 Senior advisor and fellow, Boston Consulting Group; professor of strategy, Rotman Business School

L. Smith 67 15 1 Former CEO, Intuitive (software), previously with IBM

M. Rubash 54 5 1 Chief Financial Officer, Heartflow (med. devices), former CFO, Shutterly (personal publishing)

9

If There Were 13 Seats in the Boardroom…..

Family

Family

Family

Industry Experience Food &

Drink

International Experience

Finance: Accounting

Finance: Capital Markets

Branded Goods

Industry Experience Retail

Government Political, Regulatory

Legal, Risk,

Insurance

Mergers & Acquisitions

CEO Experienc

e