21st Century Governance

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A Signature Resources presentation by Les Wallace, PhD.

Text of 21st Century Governance

  • 1.21st Century Governance Les Wallace, Ph.D.

2. Who is this guyand what does he know about governance?

  • Short version of exaggerated credentials
  • University professor / administrator
  • Hospital administratortraditional Board
  • International consulting company
  • Touch 20,000 people / 31 Execs / Ten Boards a year
  • Bank Board of Directors
  • Counterpart International Board of Directors

Signature Resources Inc 2009 3. Husband,Father,Grandfather, Champion Dry Fly Fisherman Signature Resources Inc 2009 4. 21st Century Governance

  • All centuries are different as the velocity and complexity of change accelerates.
  • Every generation finds
  • their traditional models
  • of doing business tested
  • by new ideas & demands.
  • Nothing ages faster than the future.
  • David Carr

Signature Resources Inc 2009 5. 21st Century Governance

  • The future aint what it used to be.
  • Yogi Berra
  • Oversight lapses of this
  • Board ofDirectors will
  • impact every board for years to come

Signature Resources Inc 2009 6. 21st Century Governance

  • Permanent Whitewater
  • Peter VaillLearning as a Way of Being , 1996
  • 1980s Change compatibletolerate change
  • 1990sChange adaptableevolutionary adjustments
  • 21 stCentury Change drivencreate change

Signature Resources Inc 2009 7. 21st Century Governance

  • The future is not some place we are going to, but a place we are creating.
  • The paths are not to be discovered, but made,
  • And the activity of making the future changes both the maker and the destination.
  • John Schaar
  • U.C. Santa Cruz

Signature Resources Inc 2009 8. 21st Century Governance

  • Anticipating the future and our value in it is one of the most critical set of leadership competencies of our age:thinking / acting in the future tense!
  • External awareness
  • Strategic thinking
  • Innovation
  • Leading transformation
  • Leadership succession

Signature Resources Inc 2009 9. 21st Century Governance

  • No such thing as an unmovable platform.
  • everything is in motion relative to something.Albert Einstein

Signature Resources Inc 2009 10. 21st Century Governance

  • Are you running your organization
  • or changing your organization?
  • A Leaders Agenda
  • CEO & Board
  • About 25% typical business
  • About 75% strategy and transformation

Signature Resources Inc 2009 11. 21st Century Governance

  • To be responsible inventors and discovers, we need the courage to let go of the old world, to relinquish most of what we have cherished, to abandon our interpretations about what does and does not work.
  • We must learn
  • to see the world anew .
  • Margaret Wheatly,Leadership and the New Science

Signature Resources Inc 2009 12. 21 stCentury Governance

  • Professionals generally know so much about what they know that they are frequently the last to see the future differently.Edie Weiner & Arnold Brown,Future Think
  • Your biggest competitor is your own provincial view of your future.Watts Wacker,The Visionarys Handbook

Signature Resources Inc 2009 13. 21st Century Governance

  • Boards frequently struggle with their role.
  • Most board members have much more management than governance experience.
  • Management is more day-to-day hands-on.
  • Governance is more strategic.
  • No surpriseboards frequently stray into operational or tactical decisions that should be the purview of the ED/CEO
  • (micro-management, getting in the weeds)

Signature Resources Inc 2009 14. 21st Century Governance

  • The role of governance is tocreate , authorize and monitor thestrategic directionof the enterprise andcreate values ,policyandfinancial plansthat support vibrant delivery of their mission.
  • Fiduciary, policy and strategy governance.
  • Boards that Make a Difference , John Carver

Signature Resources Inc 2009 15. 21st Century Governance

  • Governance is not so much about the technical literacy of a board member regarding a challenge facing the organization
  • (e.g., HR, marketing, finance/budget, legal, fundraising, testing)
  • as it is about the leadership competencies that give a board member a sophisticated peripheral vision to oversee a complex enterprise.

Signature Resources Inc 2009 16. 21st Century Governance

  • Boards hire a CEO/ED to whom is assigned the management of the organization consistent with board direction.
  • What if a board has serious concerns about the effective management of some aspect or element of the enterprise?
  • ( E.g. HR, Member services, Financial controls, work climate)

Signature Resources Inc 2009 17. 21st Century Governance

  • Governance competenciessometimes referred to as executive leadership competencies include
  • Enterprise leadership(complex multifunctional business entity)
  • Strategic thinking and planning
  • Organizational transformation
  • Complex policy development
  • Executive leadership assessment
  • Political savvyinfluence, negotiation, communication
  • Customer value creation

Signature Resources Inc 2009 18. 21st Century Governance

  • Our Journey Today
  • Fiduciary Governance
  • Policy Governance
  • Strategy Governance
  • Governance Leadership

Signature Resources Inc 2009 19. 21st Century Governance: Annual Duties

  • Elect board officers
  • Conduct external financial audit
  • Affirm financial statement is accurate
  • Re-validate and update strategic plan
  • Approve annual budget
  • Evaluate the CEO and set annual goals
  • Resign conflict of interest statements
  • Conduct board self-assessment
  • Nominate new boardmembers for positions

Signature Resources Inc 2009 20. Fiduciary Governance

  • Revenue & expenditures
  • Assets & liabilities
  • Operating reserves
  • Potential to generate revenue
  • Historical trends / shifts in overall financials
  • Concerns of external auditor (exceptions?)
  • Risk management
  • Conflict of interest
  • Whistleblower policy

Signature Resources Inc 2009 21. Policy Governance : The conditions under which organizational functions should be carried out?

  • Areas of organizational risk and performance:
  • Financial management
  • Human resources
  • Ethics
  • Technology
  • Customer/constituent value / service
  • Governmental compliance
  • Governance

Signature Resources Inc 2009 22. Strategy Governance

  • Envisioning a desired position in the businessenvironment of the future
  • Articulating strategies / tactics for migration
  • Approving resources for the journey
  • Monitor strategic (positioning) progress
  • Act as sentinel of business environment shifts
  • Board guidance--organizational transformation

Signature Resources Inc 2009 23. 21 stCentury Governance

  • Get out of the Blender
  • Into the Helicopter
  • see ourselves and our organizations from
  • distanceand test the moment to moment choices we make.
  • Move toward governance leadership

Signature Resources Inc 2009 24. 21 stCentury Governance Leadership Signature Resources Inc 2009 Policy Based Governance Oversight of organizational performance 25-50% of Board conversations Governance Leadership Future facing conversations 50-75% of Board conversations

  • Fiduciary conversations
  • CEO performance oversight
  • Customer satisfaction review
  • Policy review and creation
  • Periodic organizational self-assessment
  • Annual planning processes
  • Environmental scanning / tracking
  • Strategic Thinking about transformation
  • Scenario building
  • Strategic Plan Review (5 year horizon)
  • Innovation / breakthrough discussion
  • Benchmarking with industry innovators
  • Purposeful transparency
  • Board Leadership Succession
  • Organizational leadership succession
  • Inclusive customer input data