In our work with Boards we find many examples of best practice and also areas where firms are missing crucial details that could so easily be
addressed to make a more effective Board. Here is a selection of articles that have been published on subjects affecting Board and senior management performance:
Description:
Traditionally the Chairman and Company Secretary have had sole domain over Board evaluations, but since the advent of the Walker Review and the subsequent regulatory repercussions this is no longer the case. Judy Delaforce discusses the Compliance director's role and influence.
Synopsis:
Now, senior compliance professionals have a more significant and influential role to play. You can help develop your Board and positively affect the bottom line, in addition to ensuring that FSA requirements and best practice are met through the effective use of Board evaluations.
Description:
What practical steps can you take to get the most from your board evaluation? Judy Delaforce gives some advice. This article first appeared in the ICAEW's Finance & Management magazine.
Synopsis:
You know the theory, but what's best for your business? Even post-Walker Review a board evaluation is still largely viewed as a box-ticking exercise for the Financial Reporting Council (FRC) or the Financial Services Authority (FSA), or both. To consider evaluations in this way is to miss a great opportunity.
Description:
In our series of articles on Board effectiveness Judy Delaforce looks at how to make the most of a regulatory requirement.
Synopsis:
So where do you begin in order to make the task at hand the easiest and most beneficial for your firm? Board evaluations are time-consuming exercises if you conduct them solely in-house, especially for the Company Secretary and to a lesser extent, the chairman; that applies irrespective of whether you opt for just individual questionnaires or decide to run a full evaluation. The wider the scope, the more time it will take for each person involved in-house. So where do you go from here?
Description:
When evaluating a firm focus is always at the top asking the Board their views with the assumption that the 'tone' will be the same throughout the organisation and that the Board will know what's happening at grass roots. As BP recently showed this is not always the case and corporate risks known at the bottom of the organisation may not be reaching the top. Views and values may differ.
Synopsis:
Corporate directors monitor the tone at the top. Since I first began serving on corporate boards ten years ago, I have repeatedly heard the corporate and gurus emphasize that monitoring the tone at the top is among the corporate director’s primary fiduciary responsibility. It is taught in virtually every corporate governance seminar and conference.
Clearly, monitoring the tone of the C-Suite paramount to effective board performance. However, what about the tone at the bottom?
Boards have long accepted as fact that if the tone at the top is good, the culture throughout the organization will be good. That is, corporate directors have assumed that the “tone-at-the- bottom” mirrors the tone at the top....
Description:
In our series of articles on Board effectiveness Jayne Owen looks at the Board’s role in strategy. This article first appeared on Complinet.
Synopsis:
In its focus on the importance of the competence of Senior Managers the FSA identified that an understanding of the business strategy and the market the firm operates in is key to assessing the overall competence of an individual.
Description:
In our series of articles on Board effectiveness Eithne McManus looks at the necessity of the Board understanding financial analysis and controls.
Synopsis:
In the current climate it is no longer acceptable for Boards to carry on as before. The FSA expects Boards to have a full understanding of financial analysis and controls. Recent speeches from the FSA bear this out – in March of this year, Graeme Ashley-Fenn of the FSA said, ‘As we have examined and responded to the crisis we have learned more about what went wrong at firms.
Description:
In our series of articles on Board effectiveness Jayne Owen looks at the necessity of the Board understanding the latest in regulation.
Synopsis:
In our experience there are some critical success factors for engaging boards in such topics and also some definite ‘don’ts’ if you need them to recognise the importance of this information to the way the board leads the company.
Description:
In our series of articles on Board effectiveness Judy Delaforce looks at how to make the Board effective through the right membership.
Synopsis:
How do you know that you have the balance right? Where do you begin in assessing the answer in-depth? You can start by reviewing the key areas of an effective Board. There are five areas that will make a real difference to the effectiveness of the Board and its balance. They are: Leadership, Non-execs, Execs, The team, Challenge
Description:
In our series of articles on Board effectiveness Judy Delaforce looks at how to make the Board effective through the best use of committees.
Synopsis:
Whatever committees are appropriate to your business, the rule of thumb is to use as many NEDs as possible, do not have the Chairman of the Board as the Chairman of any committees if at all possible (the FSA doesn’t like this at all).
Description:
In our series of articles on Board effectiveness Judy Delaforce looks at how to make the sure the Board receives the right information to ensure it can make the right decisions.
Synopsis:
It is ultimately the Chairman’s responsibility to ensure that the Board receives the right information on a timely basis, not the Company Secretary or anyone else’s, even though the duty may be delegated the responsibility remains with the Chairman.
Description:
Continuing our series of articles on Board effectiveness Judy Delaforce looks at how to make the most of the non-executives and ensure that a new non-executive joining the Board is up to speed and up to scratch.
Synopsis:
The starting point for the assessment of any new resource is actually by objectively analysing their CV against pre-determined criteria BEFORE you have appointed them! It’s well worth examining exactly what skills you are hoping to enhance the Board with and the role you wish the new non exec to play. Only once you’ve carried out this analysis can you begin to assess CVs objectively, interview and appoint the right person. And it’s after that whole process that you can look at the new appointee and design an induction programme and ongoing development to ensure that the right ‘fit’ is gained and maintained.
Description:
In our series on Board effectiveness Judy Delaforce looks at finding the right balance for Non-Executive Directors and the FSA in terms of how much challenge is appropriate.
Synopsis:
Most of us would agree that we’d prefer a smooth running and agreeable Board given the choice, whilst others enjoy the adrenaline of constant challenge. Striking the balance is the key to a more effective Board, as too much acquiescence and you have a ‘rubber stamping group think’ Board which is far from the ideal by FRC and FSA standards, and on the other hand too much feisty debate and you have day long Board meetings and often a dysfunctional Board.
So, what’s the ideal and how is it achieved?
Description:
Continuining our series on Board effectiveness Judy Delaforce examines collective Boardroom behaviour and its positives and negatives.
Synopsis:
You’ve always dreamt that you’d have a smooth running Board with no hassle and general consensus, but now you’ve got what you wanted has it gone too far? How can it possibly have gone too far you may be forgiven for asking? If it hasn’t yet developed a case of ‘Groupthink’ how can you vaccinate against it occurring?
What stage is your Board at?
Firstly I’d ask does your Board rubber stamp everything that’s on the Board Agenda? Have you been deceiving yourself that it’s because the executive have spent considerable time in advance of the Board meeting speaking to all of the individuals on the Board in order to gain their buy-in? Is the reality that the Board has become complacent or too chummy?
Description:
The Bribery Act and the role of the Board - another day another headache! Julie Pardy explores the meaning of the new act and its impact on financial services Boards.
Synopsis:
So, finally, the Bribery Act has arrived! After an initial sprint through parliament before the changeover to the coalition government, the Bribery Act stalled temporarily due to delays at the Ministry of Justice (MOJ) in producing guidance to support firms in implementing this new act. With final guidance from the MOJ issued at the end of March the act has finally been given the 1st July as its implementation date.
What does this mean in reality for Boards and the Company Directors?
The new act is ground breaking in that it creates an offence for companies with operations in the UK for failing to prevent bribery within their organisation (whether in the UK or abroad). With it, it brings a liability for Company Directors on behalf of their workforce. The new dimension is the creation of a new liability for Directors who can now be held personally accountable and liable should their firm (and individuals within it) be found to have breached the new Act.
Description:
The FSA letter of the 12th October 2009 to some 5,000 CEOs expanded upon the statements made in the FSA’s Annual Report 2008/9 which reported on the introduction of interviews for anyone applying to undertake the roles of Chair, CEO, Finance Director or Risk Director in high impact firms.
Synopsis:
The report went on to say that other candidates could be “interviewed at the supervisor’s discretion – for example, if there are concerns about the compliance culture of the firm or the track record of the candidate.” Between October 2008 and the year end 51 SIF interviews were carried out and some applications were withdrawn which must have caused great difficulties for both the firm and the individual. How do you prepare?
Description:
Senior Managers must be feeling quite overwhelmed with the range of imprecations and calls for them to change. A key area being taken up by political and financial commentators as well as the FSA is the need for increased/improved competence amongst the leaders of our financial services industry.
Synopsis:
In the remainder of this article Jayne Owen sets out her own top tips for putting in place an effective system to support a regime where competence is recognised as key to the success of the individual and the firm rather than a bureaucratic and superficial process.
Description:
In our series on senior management issues Bob White looks at the age old problem of the difficulties on deciding between a strategic or tactical approach.
Synopsis:
Examples from history show that being tactical and defensive to achieve a goal is not the same as looking back. It combines aspiration with the ability to understand and assess the climate that someone is forced to operate in, peppered with wisdom and practical experience. Good leaders, and effective boards, need to understand their vision, be self-aware of their appetite for risk and plan and execute skilfully. Risk tolerance will play a big part in the mix.
Description:
How much do people outside the finance function understand about finance, what impact does this have and how can the finance function help? Phil Ingle explores these questions in this article previously published by the ICAEW.
Synopsis:
Picture the scene. It’s a meeting of a business organisation and the Finance Director is called upon to brief the rest of the team on the latest financial information. His presentation complete, he asks for questions; there are none, just the feeling of relief that they can move on to the next topic.
Description:
In this article Sarah Barnes looks at how adopting a project-based culture can enable directors to channel company resources quickly and effectively to areas that need them most. We also consider what attributes they need to be leaders in such an environment.
Synopsis:
Although many organisations are founded on the vision of individuals, the best way of sustaining success in the long term is to create an “intrepreneurial” culture in which operational managers are encouraged to “lead” – treating their areas of responsibility as if they are stand-alone businesses and seeking the support and investment from the directors who control the company’s assets to deliver a financial return.
While many organisations invest heavily in project management skills at an operational level, there is far less support for directors whose role as sponsor is even more vital for success: studies of technology projects consistently identify lack of executive commitment and poor or inadequate ‘sponsorship’ as a top reason for project failure (and there is no reason to suspect that this is any different in other disciplines such as HR, production or finance).
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