© Effective Governance 2013

Corporate Governance Forum 2013Corporate governance —practical tipsPresenter: James BeckManaging Director, Effective Governance

© Effective Governance 2013

• Largest independent, Corporate Governance consulting firm in ANZ.

• Combine research with practical methods developed in the field with clients over a twenty year period.

• This covers the spectrum of companies from:• ASX/Public,• Private,• APRA Regulated ,• Charity/Not-for-Profits, • Government-owned, and• Family Businesses.

2

© Effective Governance 2013

• CEO Review Diagnostic.

• Board Review Diagnostic

• Across the spectrum of companies from:• ASX/Public,• Private,• APRA Regulated ,• Charity/Not-for-Profits, • Government-owned, and• Family Businesses.

CSA has partnered to provide you the tools:

3

© Effective Governance 20134

Board Reviews - Good Practice vs Compliance

“Reviewing the performance and contribution of corporate boards has been recommended as ‘good practice’ for some years now”

Anything to declare?, Chartered Secretaries Australia and Boardroom Partners Pty Ltd, 2012

“Companies should disclose the process for evaluating the performance of the board, its committees and individual directors”

ASX Corporate Governance Council Corporate Governance Principles and Recommendations, 2nd ed, Recommendation 2.5

© Effective Governance 20135

Board Reviews - Benefit to the board

What are the Benefits:• improving the effectiveness of the board to

achieve objectives• identifying any issues for improvement• clarifying individual and group roles• team building among board members• improving relationships between the board

and management• improving corporate performance.

© Effective Governance 2013

eG capstone model: High Performance Board Model

Organisation Environment

Organisational Performance

Work with and through the CEO and Executive

Board Environment

StrategyCEO and Executive

MonitoringRisk Management

CompliancePolicy Framework

NetworkingStakeholder Communication

Decision Making

BoardCompetencies• Knowledge• Skills• Abilities• Diversity• Size

BoardStructure• Roles• Processes• Procedures• Committees

BoardBehaviour• Personality• Values• Norms• Relationships

Board Dynamics

Legal Framework

OrganisationType

Constitution HistoryStrategy

Board Roles

66

© Effective Governance 2013

eG Board review Diagnostic - outputs

7

© Effective Governance 20138

© Effective Governance 2013

CEO Expectations – benefit to the board

eG CEO expectations diagnostic provides the board and the CEO

with the opportunity of being clearly aligned on how the CEO is to meet the expectations of

the board.

9

© Effective Governance 2013

eG CEO Assessment Model

10

© Effective Governance 2013

Outcomes of a formal CEO assessment

• Alignment behavioural expectations of the CEO between the CEO and the board

• Determine overall performance for the previous 12 months

• Assist in determining remuneration levels for the next 12 months

• Assist in determining the amount of performance bonus

• Enhance the CEO’s performance through personal development

• Assist in succession planning

11

© Effective Governance 2013

CEO expectations questionsSAMPLE

Working with the Board

Strongly

Disagree

Disagree

Neither Agree Nor

Disagree

AgreeStrongly Agree

Don’t Know

The CEO effectively represents the needs and concerns of the Board back to the management team: 1 2 3 4 5 9

The CEO understands the organisation’s requirements for governance practices: (Board Only) 1 2 3 4 5 9

The CEO has a strong working relationship with the Board Chair: (Board Only) 1 2 3 4 5 9

The CEO has a strong working relationship with the Board of Directors: (Board Only) 1 2 3 4 5 9

The CEO ensures the Board receives information destined for outside stakeholders before it is communicated to them: (Board Only) 1 2 3 4 5 9

Personal Qualities

Strongly

Disagree

Disagree

Neither Agree Nor

Disagree

AgreeStrongly Agree

Don’t Know

The CEO has the strength to make the tough decisions: 1 2 3 4 5 9

The CEO has personal presence and creditability: 1 2 3 4 5 9

The CEO has an effective oral and written communicator: 1 2 3 4 5 9

The CEO facilitates cohesiveness and teambuilding among those with whom he or she works: (Management Only) 1 2 3 4 5 9

The CEO demonstrates and ability to work with diverse groups and individuals: (Management Only) 1 2 3 4 5 9

12

© Effective Governance 2013

CEO Expectations Diagnostic - feedback

13

© Effective Governance 201314

Availability?

CSA Website …. mid June • Board Review Diagnostic• CEO Expectations Diagnostic

Coming soon…• Board Skills Assessment

© Effective Governance 2013