Governance Session 1
MAY / JUNE 2014
Introduction
• Welcome
• Introductions
• Expectations
• Objectives
2
Program Objective
• To provide relevant insights into
good governance that has
practical impact on board
performance
3
Session One
1. Introduction
3. Break
•
2. Board Structure
4. Board Processes
•
•
• Governance framework
• Board accountabilities
• Individual director
responsibilities
• Board make-up
• Committees
• Board leadership
• Board member lifecycle
• Board and Committee
Effectiveness
•
5. Session Debrief
4
Pre-read Material
•
The Dynamic Nonprofit Board
• Paul J. Jansen and Andrea R. Kilpatrick
• The New Work of the Not-for-Profit Board
• Barbara Taylor, Richard Chait, Thomas Holland
• Together at the Top: The Critical Relationship
Between the Chair and CEO
• Richard Hossack
5
Session Handout
• Agenda
• Slide deck content
• Case Study (Cambridge Memorial Hospital)
• Homework in preparation for Session Two
• Overview of Governance Resource Centre
• HSP Work sheet
• Serves to identify board project to completed
between Sessions Two and Three
6
Case Study Introduction
• Cambridge Memorial Hospital
• Focus of Session 2
• Apply Session 1 learnings to a
governance crisis
• Contained in the handout
• Read in advance of Session 2 and
consider questions
7
Governance Resource Centre
• Online library of governance tools to
support improved board performance
• Templates, frameworks, process outlines
• Foster good governance across HSPs
• Access instructions to each HSP
8
Governance Resource Centre
• Sample Mandates and Terms of Reference
• Meeting Effectiveness Tools and Templates
• Board Effectiveness Process Frameworks
• Boardroom Culture and Relationship Tools
• Stakeholder Communications Tools
• Governance Best Practice Resources
• articles, studies and reports
9
HSP Worksheet
• Included in Session 1 package (last page)
• Goal / Purpose
• Identify opportunity to improve your HSP’s board
performance
• Plan and implement over the summer/early fall
• Governance Resource Centre available
• Session 3: report and debrief
• Opportunity to share success, address challenges,
learn from others
• Important: get buy-in of your HSP / Board
10
Session success…
• Program objectives
• Participant expectations
• Issues impacting governance
• information/guidance needed
• decisions to be made
11
Questions to Keep in Mind
• What is your Board’s critical contribution?
• What value does your Board deliver to HSP?
• What would your HSP lose if the Board ceased
to exist?
• What should/could your HSP Board aspire to
become?
12
GOOD GOVERNANCE
OVERVIEW
Governance Defined
•How do you define governance?
O
V
• What’s is its purpose in an HSP?
E
• What does it do?
R
• What does it mean?
V
I
E
14
W
Role of the Board…
…is to enhance
HSP staff
decision-making
to create viable,
sustainable
organizations
15
KEY BOARD SUCCESS
FACTORS & CHALLENGES
Key Board Success Factors
• Current state: focus on governance inputs
• Best practices
• Guidelines
• Regulation compliance
• Bylaws
• Looking for greater governance rigour
• substantive proof of governance
effectiveness
• focus on governance outcomes
17
Key Board Success Factors
• Structure
• how the Board is organized
• Process
• how the Board does its collective work
• Relationships
• dynamics between Directors and Staff
18
Key Board Success Factors
• Shared mission
• Recruit right board members
• Roles and accountability clarity
• Board independence
• Board / Management relationship
• Board and Committee leadership
19
Key Board Success Factors
• Boardroom behaviours
• candour, trust and confidence,
director motivation
• Effective orientation, ongoing
education
• Informed decision-making
• Measuring outcomes vs. inputs
20
Common Board Challenges
• Sharing power/control with HSP Staff
• Board members not on the “same page”
• Input rather than outcome focused
• Clarity of roles and decision-making
authority
• Measuring performance
21
Common Board Challenges
• Board informational needs/expectations
• Leadership succession
• Orienting new HSP directors
• Director preparation and engagement
• Group or team dynamics / boardroom
culture
22
Your Turn
Board challenges at
your HSP?
23
BOARD STRUCTURE
Governance Framework
D
E
L
E
G
A
T
I
O
N
A
C
C
O
U
N
T
A
B
I
L
I
T
Y
OWNERS
BOARD OF
DIRECTORS
STAFF
EMPLOYEES
Ownership is about right of
possession
O
Board of Directors is about
strategic oversight
E
Staff is about strategy
execution & accountability
for results
Operations the daily tasks
that move the organization
towards fulfilling its strategy
V
R
V
I
E
25
W
BOARD MANDATE AND KEY
ACCOUNTABILITIES
Defining the Board’s Role
Board: find & focus on strategic bulls-eye
Staff: gathers the bows and arrows and
shoots straight
27
Role of the Board
• Traditional focus on role & responsibilities
• Inputs vs. Outcomes
• Compliance vs. Contribution
• Control vs. Collaboration
• New focus on impact
• What contribution to the board’s success?
• What value does the board deliver?
R
O
L
E
O
V
E
R
28
V
Role of the Board…
RISK / DANGER
STAFF
NOT
THE
BOARD
…is to
provide a
insights
that Staff
don’t have
R
O
L
E
O
V
E
R
29
V
Role of the Board…
What does Board want to
be 100% responsible for?
BOARD
RESPONSIBILITIES
SHARED OR
OVERLAPPING
RESPONSIBILITIES
STAFF
RESPONSIBILITIES
30
Role of the Board
R
• Boards charged with decisions relative to:
O
•
•
•
•
•
•
•
Direction setting (strategy)
Succession planning
Financial oversight
Performance management
Risk / opportunities management
Owner/member communications
Good governance
L
E
O
V
E
R
31
V
RESPONSIBILITIES OF
DIRECTORS
Responsibilities of Directors
• Fulfill the responsibilities of the board
R
O
L
• Be present and participate in
meetings of the board
E
• Comply with the HSP’s code of
conduct
O
V
• Engage stakeholders (owners)
E
R
33
V
Responsibilities of Directors
• A director’s job is to :
• Focus on mission achievement
• Prepare for / attend meetings
• Participate in decisions benefitting HSP
• Factoring stakeholder interests
• Support decisions of the Board in public
R
O
L
E
O
V
E
R
34
V
Responsibilities of Directors
Fiduciary Duty
• Board members owe duty to
the corporation
• Duty of loyalty
• Duty of care
R
O
L
E
O
V
E
R
35
V
Responsibilities of Directors
• Compelled to act in HSP’s best
interests
• Regardless of what “owner” wants
• Viability / sustainability of HSP
• All commitments congruent with
fiduciary duty
• Challenge: when targeted by
“owners” to correct “injustices”
36
Responsibilities of Directors
R
• Individual Directors have no real authority
O
• Not ambassadors, advocates or lobbyists
L
• Authority only exists…
E
• As part of the board collective
• When the board meets
• Can be called on to represent the board
• Expected to defer to HSP Board decisions they
may not support personally
O
V
E
R
37
V
BREAK
Board Make-up
Team skills/experience mix
and implications
Board Make-up
• Tension between models & processes
• Skills vs. representation
• Selection process
• Open nomination process
• Supports transparency
• Inability to ensure appropriate mix of skills,
representation, other factors
• Managed process
• Aligns mission and motivation and skills
40
Board Make-up
• Board as “team”
• Infers position players
• Hallmarks of an effective Board:
• Sound judgment
• Initiative
• Responsiveness
• Operational excellence
41
Board Make-up
Start with outcome in mind:
• What kind of board does HSP need?
• Expertise and capacity needs
• Ability to effectively oversee and
challenge a world-class management
team
• Probing, testing assumptions, confirming
reason, process and logic
42
COMMITTEE STRUCTURE
AND MANDATES
Committees of the Board
 serve a number of useful purposes,
including:
 fewer people able to apply more “hands on”
assessment of issues
 able to engage in more fruitful discussion
 do the heavy lifting for the Board
 can also introduce an additional check and
balance for Boards
44
Rules for Committees
• think carefully about…
•
•
•
•
•
•
•
duties
size of the Committees
types/number of Committees
procedures for selecting Committee members
decision-making authority
rotation of Committee chairs & members
connection to the Board or Staff
45
Rules for Committees
•guard against Chairs doing all the work
• all members should be actively involved
• critical decisions should come back to
the Board
• great committees…
• provide Boards with options or alternatives
• run by / rely on very good chairs
46
ROLE OF THE BOARD CHAIR
Role overview
• facilitates effective Board oversight and a
productive relationship with Staff
• ensures Board works as cohesive team
• help the Board act independently:
• ensures Board understand responsibilities & boundaries with
Staff
• oversee how the Board carries out its major responsibilities
• act in best interests of stakeholders
• Board’s primary contact with Staff
48
Board Chair Duties
• Board Management
• presides over Board and Member meetings
• sets meeting schedules and agendas in
cooperation with Staff and other Directors
• determines and delivers on the
informational needs of Directors
• report to the Board on material matters
49
Board Chair Duties
• Managing Member/Owner Relations
• responsible for chairing Member meetings
• facilitates communications with and acts as
primary liaison between Management and
Members at these meetings (e.g., town hall
or annual general meetings”)
50
Board Chair Duties
• Relationship with Staff
• works as a partner to build trust and
confidence
• makes sure Board-approved resolutions
are carried out
• ensures the Board provides appropriate
monitoring of and input into the
organization’s strategy
51
Board Chair Duties
• Relationship with Staff
• meets regularly with Staff to provide feedback
and advice on behalf of the Board
• communicates with Staff on behalf of
Directors, Members or other stakeholders
• maintains effective communications with
Directors and Staff between meetings
• acts as an alternate spokesperson
52
BOARD PROCESSES
•
Board Member Life Cycle
Director Recruitment
• formal: process and accountability is made explicit;
project management approach used
• rigorous: based on careful assessment of
organizational needs and challenges
• transparent: selection and recruitment process is
clear and open
• proactive: anticipate director retirements,
resignations, etc. and act accordingly
54
Director Recruitment
• avoid temptation to focus on“who’s who”
• starting point: identify specific board needs
• focus on board as a team and its job
•
•
•
•
what is the strategy?
are the current directors a good fit?
is board appropriately equipped?
analyze what the board lacks in skills and
expertise
• encourage best talent to fill skill or other gap
55
Director Orientation
• understanding organization’s
past, present, future plans
• promote commitment /
contribution
• equip directors to ask intelligent,
probing questions, give
appropriate oversight
56
56
Director Orientation
• Should
take four tracks
2. Individual responsibilities
57
1. Board culture
 Fiduciary
 Board specific
3. The board’s priorities
4. Organizational focus
57
vision, mission
regulatory codes
review of structure
meeting protocol
governance practices
board committees
board responsibilities
bylaws and policies
director/management
responsibilities
strategic plan
board/staff
relationship
code of conduct
58
Orientation Checklist
core values
conflict of interest
58
Ongoing Education
A regular part of the board agenda
1.
2.
3.
A focus on HSP internal workings
External focus on the external
environment
Improve board and director
effectiveness
59
Performance Assessment
• Based on three key dimensions:
• Competency
• Possesses relevant skills and experience
• Contribution
• Uses skills and experience in a relevant
valuable way
• Characteristics
• Behavioural: models organizational values,
team member, etc.
60
Session Debrief
Next Time
Board Culture / Dynamics
•
• Teamwork, director independence and
conduct
• Board / Director relationship with Staff
• Meeting effectiveness (2)
• Due diligence: the tenor and tone of board
deliberations
• Decision-making
Healthcare Governance Case Study
• Application of Session 1 Learnings
62
Homework
Healthcare Governance Case Study
• Contained in your handout
• Read & come prepared to discuss
• Three key questions:
• What was the primary governance problem?
• What symptoms resulted from this problem?
• How do you guard against a similar problem from
occurring at your HSP?
63
TD Canada Trust Centre
55 King Street West, Suite 716
Kitchener, ON N2G 4W1
T: 519-502-0409
W: www.boardgovernance.ca
E: john@boardgovernance.ca
64
Governance Session 2
MAY / JUNE 2014
Loose Ends
Any issues left over from
Session One?
66
Session Two
• 6. Board Culture / Dynamics
•
• Teamwork, director independence and conduct
• Board / Director relationship with Staff
• Meeting effectiveness
•
• 7. Break
•
• 8. Healthcare Governance Case Study
•
• Application of session learnings
•
• 9. Re-cap of Issues, Next Steps and Adjournment
•
• Key issues for follow-up
• Overview of Session 3
• Adjournment
67
BOARD CULTURE AND
DYNAMICS
Your Turn
How would you
describe your HSP’s
boardroom culture?
69
Your Turn
• Some questions:
• What is boardroom culture and why is it
important (if indeed it’s important)?
V
I
S
I
• What factors influence boardroom culture?
O
• What are some descriptors that apply to board
/ staff relationships or interaction?
N
• If boardroom culture were to be the focus or a
goal, what are some options?
C
/
U
70
L
Boardroom Culture & Dynamics
Director conduct
 How do Directors conduct themselves and
relate to each other?
 What is the tenor and tone of meetings?
 Does the Board / individual Directors model the
behaviour it expects of Management? If not,
why is it tolerated?
 What are the boardroom elephants and why
aren’t they dealt with?
71
Boardroom Culture
• Board’s relationship with Staff
• Level of trust and confidence
• Clarity of and respect for roles
• How the Board and Staff share
power and control
72
Key Board Relationships
Staff:
Boards:
 horizontal orientation
 inherent and necessary lack of
hierarchy
 equality of Board members
 vertical orientation
 necessarily
hierarchical
 designed for
program & service
delivery and
accountability
73
Information Gap
300
hours
MANAGEMENT
BOARD
3,000
hours
A fundamental flaw
• lack of sustained focus
• how to contribute to strategy
• how to make an informed
contribution to decisions
74
Practical Oversight
• Monitoring delegated authority to Staff…
• probe Staff thinking
• confirm mission alignment
• assess compliance
• confirm process used
• test assumptions
• guard against status quo
R
I
S
K
• key is Staff’s receptivity to the Board’s role
75
BOARD PROCESSES
•
Member Effectiveness
Your turn
•What are key criteria for
meeting effectiveness?
•What challenges does your
HSP Board face?
77
Meeting Effectiveness
Boards only exist, legally &
functionally, when they meet
the centre of governance
the theatre, playing field of
boards
78
Effective
Meetings
Effective
Boards
Trust / Shared Mission
Open Culture / Group Dynamics
• failure to identify what matters most
• lack of clear agenda
• lack of agenda ownership
• director acquiescence
79
Board Ownership of Agendas
• facilitated by corporate secretary
• driven by Chair with CEO
• sign-off by the Chair
• pre-read material determined
• clearly stated outcome for each item
• publish draft of next meeting agenda in
pre-read for director review and
comment
80
Agenda Development
1. Call to order / Chair’s remarks
2. Approval of minutes
3. Review of action items
4. CEO report
5. Strategy updates
6. Board Committee reports
7. Specific items of business
8. Other business
9. Meeting without management
81
Meeting Management
• Director accountabilities
• study, understand pre-read
• familiar with each agenda item
• meeting attendance a priority
• participate in, contribute to
deliberations, decision-making
82
Meeting Management
• Management accountabilities:
• deliver timely, comprehensive preread
• highlight critical issues
• provide elaboration or clarification
• respect time for due diligence
83
Meeting Pre-read
Equipping directors to ask intelligent,
probing, relevant questions
Pre-read content
Recommendations
• description of issue
• pros/cons of options
• significance, implications
• proactively address
questions, issues
• process to develop datadriven recommendation
tied to mission
• consequences of not
proceeding
84
Meeting Management
• highlight issues of critical importance
• ensure common understanding by
Board/Committee
• address Director questions or matters
requiring elaboration or clarification.
• balance of time allotted should be used for
deliberations by Board members
• get to a clear, strongly supported decision
85
Decision-making
D
E
C
I
S
I
Core board
function
O
N
-
86
M
Role of the Board…
…is to enhance
HSP staff
decision-making
to create viable,
sustainable
organizations
87
Your Turn
•How is your HSP Board’s
decision-making
effectiveness?
•What challenges exist?
88
Critical Factors
• understanding of Board’s decision-making
authority/accountability
• Director engagement / ownership
• relevant knowledge
• time to consider / understand issues
• access to complete information
• clear decision-making criteria
89
Decision-making Process
1. Problem / Issue Definition
2. Get clear on your ideal outcome
3. Explore different perspectives
4. Develop alternatives
5. Weigh the Pros and Cons
6. Decide and Act
90
Decision Outcomes
Support for Board decisions: delivering
on the “one voice” commitment
91
Meeting Minutes
Purpose: official record of Board’s care &
diligence; proof of HSP’s existence
• provides evidence to board/company
actions
• reflects work of board team, not
individuals
• provides record of decisions made,
actions taken
• documents what was done, not what was
said
92
Healthcare Governance
Case Study
Governance Case Study
• What was the primary problem that
caused the Ministry to step in at
Cambridge Memorial Hospital?
• What governance-related symptoms
resulted from this problem?
• How do you guard against a similar
problem from occurring at your HSP?
94
Re-cap of Issues and
Actions
Completing HSP Work Sheet
• Identifying and acting on session
outcomes
• What were the key learnings or insights?
• Which are most applicable? Impactful?
• What quick wins can be achieved?
• What foundational issues need to be addressed?
• How do you go about taking action?
96
Commitments & Challenges
What is the most important
thing you can do in the coming
months?
97
Final Challenge#6
•
What does your Board
aspire to become?
What does the Board want to be able to
say is true about its value, contribution,
etc.?
98
TD Canada Trust Centre
55 King Street West, Suite 716
Kitchener, ON N2G 4W1
T: 519-502-0409
W: www.boardgovernance.ca
E: john@boardgovernance.ca
99