Learn the difference between a board of advisors and a board of directors and what roles they play in running a business. Providing real-life examples of governance best practices and exploring the legal requirements of different structures and the consequences of board decisions.

2. David Pasieka – Liberty Utilities
December 2011"

3. Governance Failures……
Ø Worldcom
Ø Enron
Ø Martha Stewart
Ø Bear Sterns
Ø Lehman Bros
Ø Nortel
Ø Hollinger
Ø RIM
Ø eHealth
Ø Olympus

4. Why - Why – Why?
§ Management Reporting Spin
§ Part-Time role / Full Time Need
§ Forceful CEO’s
§ Board Skill and Experience
§ Unwavering Trust of Management
§ Unwillingness to Rock the Boat

5. The Corporation
Management Advisory Board
Board of Directors Shareholders

6. Key Linkages
Shareholder
Auditor
Board of Directors
Committees
Management
Team Advisory Board

7. Boards over Time
Influence
Governance Board of
Complexity Directors
Advisory
Boards
Stage
Financing
Time

8. Director’s Duty
Ø Fiduciary Duty-
“To act in the best interests of
the corporation. It is this notion
that all stakeholders need to be
considered.”
Ø Duty of Care –
“To exercise the care, diligence
and skill that a reasonably
prudent man would exercise
under comparable
circumstances.”

9. Stakeholder View
Shareholders / Public / NGO’s / Competitors / Global Markets
Employees Legislators
Scientists / Banks / Media / Customers / Investors

10. Directors Functions
Ø Hire / Fire CEO
Ø Reviews & Approves the
Strategic Direction of the
Corporation
Ø Monitor the Performance of
Management

11. Directors Tools
Ø Information:
Ø Right amount to absorb key issues and
make informed decisions.
Ø Process
Ø Independence & Diligence. Ask lots of
Questions.
Ø Business Judgment
– Background, Insight, Experience

12. Bright Red Line
Ø Very Passive: Rubber Stamp
Ø Management sets and drives agenda
Ø Packages are late or Walked in
Ø CEO strong willed
Ø Infrequent meetings
Ø Board Never votes no
Ø Moderate
Ø Very Active: Micro Management
Ø Board meets monthly, lots of Committees
Ø Board is stronger then the CEO
Ø Board Committee work extensive
Ø Board Large / Executive Committee Active
Brown Governance 2005

13. TSX Governance Guidelines
National Instrument 58-101
Ø Board of Directors
Ø Orientation and Continuing
Education
Ø Ethical Business Conduct
Ø Nomination of Directors
Ø Compensation
Ø Other Committees beyond Audit,
Comp & Nominating
Ø Assessments

14. Building Your Board(s)
Ø Define Strategic Gap
Ø Business Experience
Ø Management Experience
Ø Directors Experience
Ø Personal Attributes
Ø Ready / Willing / Able

15. Board Chemistry
Ø Strong Board Chair
Ø Constant Tending of
Culture and Composition
Ø Senior Management
Equipping Directors
Ø Bias to Forward Looking
Insight vs Rear View
Judgements

16. What’s the Motivation?
Ø Favour to CEO
Ø Status / Prestige
Ø Interesting & Engaging
Ø Opportunity to Network
Ø Give Something Back
Ø Fun
Ø Remuneration

17. What’s the Risk
Ø Insolvency Liabilities:
Ø Payments to Employees
Ø Payments to Creditors
Ø Payments to Government
Ø Personal Conduct
Ø Insider Trading
Ø Joint & Several Liability

18. Defending the Risk
Ø Fiduciary Duty
Ø Duty of Care
Ø Due Diligence
Ø Corporate Indemnity
Ø Director & Officer
Insurance

19. Key Advisory Roles
Ø “The Customer”
Ø “The Geek”
Ø “Dad”
Ø “Tight Ass”
Ø “Jerry Maguire”
“Art of the Start” – Guy Kawasaki

20. Managing Your Board
Ø Orientation
Ø Effective Charters
Ø Meeting Management
Ø Board Materials
Ø Agenda / Minutes
Ø In Camera
Ø Ongoing Assignments
Ø Celebrations

21. Evaluating Participation
Ø On the Masthead
Ø Silent and Deep
Ø Personality Challenged
Ø Ethical Poison

22. Is It Time to Act?
Ø Do they come prepared for
the meetings?
Ø Can you get your Advisors
when you need them?
Ø Is to much time being spent
on trivial issues?
Ø Are all members contributing
to critical discussions?
Ø Are you getting great return?

23. Assessment Approaches
Ø Attendance at Meetings “Cheap & Cheerful”
Ø For the “Good of the Board”
Ø One on One Coaching Sessions
Ø Survey - Board / Peer Performance
Ø 360 degree Feedback
Ø High Tech Interactive
Ø Third Party Observers
“Expensive & Comprehensive”

24. For the “Good of the Board”
Round the Table (Verbal)
Ø What Worked / What Didn’t
Ø Areas to Improve
Ø Emotional Decompress
Survey 1 to 5 (Written):
Ø Pre-materials Concise and Helpful?
Ø Everyone prepared?
Ø Issues covered Trivial or Important?
Ø Discussion Focused Operational or Strategic?
Ø Stayed on Track?
Ø Who were the Heroes? / Who were the Foes?

25. In Summary
Ø The Corporation
Ø Directors Duty
Ø Building Boards
Ø Managing Boards
Ø Evaluating Boards

26. References
Ø Corporate Governance – Carol Hansell 2003
Ø Integrity in the Spotlight – Maureen Sabia & James Goodfellow 2005
Ø National Instrument 58-101- Disclosure of Corporate Governance
Practices
Ø CICA 20 Questions Series
Ø www.Wallstreetfollies.com
Ø “Money for Nothing: How the Failure of Corporate Boards Is Ruining
American Business and Costing Us Trillions.” – Gillespie 2008
Ø Globe and Mail Board Games – 2011
Ø www.Guidedfutures.com - 2011
Ø Corporate Governance in Canada – Osler 2009

27. David Pasieka!
dpasieka@marsdd.com!