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’ 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 GCGR2009+ - GFC, Banking Crisis. Taxpayer bailout - Walker (UK) – ‘Change is needed in the boardroom’

Passive oversight -> active improvement -> setting direction -> scrutiny and risk management

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

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)

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.

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

Review - Who?

• Directors• Board• Chair• CEO / CS / CFO• Committees

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

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

Board Accord

• Client focused• Multiple approaches• Qualitative and quantitative• Capacity building – PD and PD

Board Accord Metric

Review - Challenges

• Resistance• Chair• Them/Us• Structure – member based• Board/Management – boundaries• Self awareness• Culture• Consultant • Difference

Board Accord “Aligning aspiration and outcome for profit,

people and planet”

Robert Gordon BEd M Coun GAICDDirector of Programs

0405 541 510robert@boardaccord.com.au

www.boardaccord.com.au