The Board & Its Role

A board of directors is a body of elected or appointed members who jointly oversee the activities of a company or organization. Other names include board of governors, board of managers, board of regents, board of trustees, and board of visitors. It is often simply referred to as "the board.

A board's activities are determined by the powers, duties, and responsibilities delegated to it or conferred on it by an authority outside itself. These matters are typically detailed in the organization's bylaws. The bylaws commonly also specify the number of members of the board, how they are to be chosen, and when they are to meet.

The Companys business is managed under the direction of the Board of Directors. The Board delegates to the Chief Executive Officer, and through that individual to other senior management, the authority and responsibility for managing the Companys business. The Boards role is to oversee the management and governance of the Company and to monitor senior managements performance.

Responsibilities include
Select individuals for Board membership and evaluate the performance of the Board, Board committees and individual directors.

Select, monitor, evaluate and compensate senior management.

Assure that management succession planning is adequate. Review and monitor implementation of managements strategic plans. Review and approve the Companys annual operating plans and budgets.

 Monitor corporate performance and evaluate results compared to the strategic plans and other long-range goals. Review the Companys financial controls and reporting systems.

Review and approve the Companys financial statements and financial reporting.
Review the Companys ethical standards and legal compliance programs and procedures. Oversee the Companys management of enterprise risk. Monitor relations with shareholders, employees, and the communities in which the Company operates.

Evaluation & Compensation of Ceos & other senior executives

CEO Performance Evaluation

A standardized process for CEO performance evaluation is developed and adopted by the board.

At the beginning of each year, the CEO presents his or her performance objectives for the upcoming year to the non-employee directors for their approval.
At the end of the year, the non-employee directors then meet to discuss the CEOs performance for the current year against his or her performance objectives. The non-employee directors use this performance evaluation in the course of their deliberations when considering the compensation of the CEO. The non-employee directors and the CEO then meet to review the CEOs performance evaluation and compensation.

An interview is arranged at a location that is private and free from interruptions. The interview has the purpose of collecting and assessing information relative to standards of performance and also to discuss future actions where the goals and objectives of the institution may need adjustment or what future directions the board and the CEO should be taking.

 The board should either establish an independent Compensation Review Committee, or undertake CEO evaluation as a committee of the whole, with all trustees involved in the actual evaluation and recommendation process.

After a committee is in place, a CEO evaluation and compensation policy should be established, based on the organizations mission, vision and business strategy, and including the goals and values the organization seeks to reward.
The CEO should be evaluated using pre-determined criteria and goals specified in the CEO compensation policy. In addition to evaluating quantitative measures, evaluation of the CEO may include a 360-degree approach that seeks feedback on qualitative performance from the board, staff leaders, senior management and the CEO. It Includes
Quantitative measures like financial performance and operating indicators. &

Qualitative Measures like staff relations, leadership, communication, ethics.

Role in Compensating
Compensation Committee The Board shall establish a compensation committee which monitors and evaluates the compensation models that exist in the company, and that are targeted to senior officers.

The compensation committee shall evaluate management programs with variable compensation and the implementation of the AGM resolution on guidelines for such compensation. Compensation committee members should have knowledge and experience in matters concerning director remuneration.

The Chairman of the Board may be chairman of the committee. Other members of the compensation committee must be independent of the company and the company management.

Managing Succession
Given the economic, operational and potential cultural implications of unplanned departures and the risks associated with having to bring in external talent, corporate boards need to make succession management one of their most critical duties.

Steps for managing succession Define the role requirements.

Role requirements should be centered around four components: key accountabilities and responsibilities, performance metrics, competencies and critical experience sets.

Assess the candidates and provide them with feedback and coaching.
A combination of assessment methods and techniques will yield the most reliable data needed to inform the succession process. All participants should be given their data and participate one-on-one sessions with an assessor to understand their results and the implications in terms of advancing in the process. Participants who are viable candidates should receive coaching to close any gaps that assessment identifies.

 Measure the progress of internal candidates.

If there is a defined "end-date" for a planned succession event, board should reassess the top internal candidates for the role based on observations collected throughout the coaching sessions. If necessary, board can conduct additional behaviorally based interviews with a sample of managers, to determine candidate fit, readiness and progress against development opportunities.

Generate an external candidate pool (if needed).

Sometimes the internal assessment and coaching process reveals that there is no viable internal candidate. If so, external candidates will have to be assessed just as thoroughly as internal candidates are.

Re-assess candidates and make a selection.

An effective final hurdle for the top candidates is a presentation to key stakeholders on how they would address a strategic business issue or challenge that is relevant to the role. This presentation can provide an opportunity to evaluate an external candidate against an internal candidate and see how they interact with the organizations key stakeholders.

Provide leadership development and conduct talent reviews.

Ongoing talent reviews are the backbone of succession management. Talent reviews should periodically assess the depth and breadth of the talent currently in critical roles and the feeder pools of talent into these roles. This process will enable organizations to identify any talent gaps and formulate plans.

Managing Corporate Crisis

Boards role is to ensure that management has developed and implemented processes for identifying potential risks, flagging and addressing problems before they reach crisis proportions, and managing unavoidable crises once they occur. The steps to plan for crisis
Evaluating the strength of the companys internal controls, risk management processes and corporate governance practices as they relate to crisis management.

Identifying common causes of corporate crisis.

Designating an internal and external crisis response team in advance. Implementing a communications plan that promptly and directly informs the board of problem situations and establishes a protocol for communicating with key constituents. Developing a process for responding to a crisis that includes appropriate assessment, investigation and mitigation of the situation.

 Crisis response team

The board and management should identify an internal crisis response team. The internal crisis response team should include senior executive officers, such as the: Chief executive officer (CEO). Chief financial officer (CFO). Chief operating officer (COO). General counsel. Representatives of key operational departments (as appropriate). Heads of compliance, internal audit, human resources, corporate communications and public relations (PR), and sales and marketing.

Team of external advisors The board should know who to call in a crisis and have established relationships with outside providers of legal, forensic, PR and communications advice.

Thank you..