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Boardroom Evaluation - If Not Why Not?

Boardroom Evaluation - If Not Why Not?. The performance of the board and key executives should be reviewed regularly against both quantitative and qualitative outcomes . - ASX Corporate Governance Council. The Need of the Time. 1970’s – the club, ‘Rubber stamp’

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Boardroom Evaluation - If Not Why Not?

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  1. Boardroom Evaluation - If Not Why Not? The performance of the board and key executives should be reviewed regularly against both quantitative and qualitative outcomes. - ASX Corporate Governance Council

  2. The Need of the Time 1970’s – the club, ‘Rubber stamp’ 1980’s – Collapses – ‘Compliance / Fiduciary duty’ 1990’s –Stock market crash/Dot.coms – ‘Transparency’ 2000’s – Spectacular – AWA, NSC, HIH, One Tel. OECD Governance Principles, Aust ASX issued GCGR 2009+ - GFC, Banking Crisis. Taxpayer bailout - Walker (UK) – ‘Change is needed in the boardroom’ Passive oversight -> active improvement -> setting direction -> scrutiny and risk management

  3. Accountability – External Imperative • Increasing regulation • ASXCGC Corporate Governance Principles and Recommendations - ‘optimise performance and accountability in interest of shareholders and economy’. • Advocate companies - ‘fairly review and actively encourage improvements in board and management effectiveness’ • GCGP can’t prevent poor decision making and/or failure

  4. Accountability – Internal Imperative Regular reviews - compliance (assessment) to capacity building – • leadership • role definition, responsibility and boundaries • accountability • decision making • alignment (culture) • governance and process • Accountability to external stakeholders and funders)

  5. Directors under the lens • Executives are accountable – why not directors? • Directors’ responsibility is joint and shared. • Alignment is critical. • Performance Reviews address individual expertise and collegiate capability.

  6. Review - Objectives Identify what’s working and what’s not working – • Individual accountability • Collective accountability /alignment • Vehicle for dissent, conscience, diversity • Governance structures, systems • External environment, stakeholders • Leverage – skills audit, quality assurance etc

  7. Review - Who? • Directors • Board • Chair • CEO / CS / CFO • Committees

  8. Review - How / When? • Annual, biannual, triannual, trend analysis • APRA- annual board and directors • If not, why not? • Online / hard copy • Generic / Customised • Qualitative / Quantitative • Interviews – Open, binary, summated • Internal / external • Scope

  9. Review - Outcomes • Capability not only compliance • Why are we sitting around this table? • Clear actionable outcomes • Individual directors, collegiate alignment, governance, stakeholders, risk • Generate outcomes • Report

  10. Board Accord • Client focused • Multiple approaches • Qualitative and quantitative • Capacity building – PD and PD

  11. Board Accord Metric

  12. Review - Challenges • Resistance • Chair • Them/Us • Structure – member based • Board/Management – boundaries • Self awareness • Culture • Consultant • Difference

  13. Board Accord “Aligning aspiration and outcome for profit, people and planet” Robert Gordon BEd M CounGAICD Director of Programs 0405 541 510 robert@boardaccord.com.au www.boardaccord.com.au

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