Posts Tagged ‘Corporate Governance’

Woodruff-Sawyer Board Panel: Conclusion

October 7th, 2009 Comments off

            In my conclusion of summarizing the Woodruff-Sawyer panel discussion on Board of Directors seat appointments, the final discussion point of the panel addressed the three key areas of Board consideration. These areas included Board dynamics, the management process & interaction with the Board, as well as the levels of protection afforded to Board members in carrying out their respective duties.  As discussed in my previous post, Bruce Lachenauer of Spencer Stuart had commented that it can be as difficult to remove yourself from the Board as it is getting the position in the first place. With this consideration in mind, great care must be taken by the candidate in assessing their offer.


            The panel spent good time discussing the considerations of Board dynamics. Some of the points that they touched on included;

Ø  Knowing what the views/perceptions are by Sr. Staff of the Board.

Ø  How the actions between Board members would be characterized.

Ø  What is the level of interaction between the Board and management?

Ø  What role does the Board play in corporate risk management?

Ø  What involvement does the Board have in the development of corporate strategy?

            Folino also commented that potential Board members should also be afforded the opportunity to engage and interview company executives in order to gain the appropriate insights on management styles, identify any concerns about corporate structure, or any other challenges a new Board member might have to deal with.   Additional considerations, outside of the management and member dynamics, might include;

Ø  Knowing the selection & interview process for new Board members.

Ø  Knowing the timing, frequency, and average agenda for meetings.

Ø  The nature of your ideal involvement with the Board.

Ø  Structure of Board meetings and conference calls.

Ø  Travel considerations for Board meetings and impact on current schedule.


            The final portion of the conversation touched on the compensation levels afforded to Board members, which will obviously vary according to the complexity and size of the organization. While Lachenauer commented that the average retainer is up over 50%, the level of compensation is still not commensurate with the level of work and risk for Board members, which has increases substantially in recent years. While there is typically a cash retainer, this is not the only level of compensation.  Lachenauer cited that the average cash retainer is approximately $75k. There is also typically an equity element, which is usually in the form of RSU’s. The level granted will also vary according to the size of the organization and will usually be higher for the smaller entities.


            I know as I start down this path to secure a Board position, which I am targeting for inside of the next 12-18 months, this was a very informative panel discussion to attend. For my colleagues out there who have experience sitting on a Board, I’d also welcome the feedback and know how your experiences compare to what I’ve outlined over the last few days.


Thanks for reading . . . .


Jeffrey Ishmael

Woodruff-Sawyer Board Panel: Part II

October 6th, 2009 Comments off

            Last week I gave an overview of the Woodruff-Sawyer panel discussion that I attended, which focused on the process of Board of Directors seat selection and the considerations to pursuing such a position.  I had previously left off at the considerations and value of sitting on the Board for an external organization.  As Bruce Lachenauer had discussed during the panel, sitting on the Board for an outside organization brings great perspectives to the company you work for if you are functional executive. However, in consideration to this pursuit, there are a number of considerations.

Ø  If you are seriously looking at such an endeavor, it’s ideal to start front-loading that effort with your existing company, President, or legal counsel to ensure there won’t be any issues with such an engagement.

Ø  Typically, any external Board appointments need to be run through your internal Board, regardless if you are a sitting member or not.

Ø  Preliminary support from your President or CEO is crucial in such an effort. 

            Paul Folino, Chairman of Emulex Corporation, also discussed the merits of sitting on a Non-Profit Board. Folino felt that this was a great way to get the feet wet with Board participation, while also giving something back to the community. However, as Folino cautioned, “don’t expect that the work load of a Non-Profit will be less than that of a standard corporate Board”.  This was also endorsed by one of the members of the audience, who also had extensive Non-Profit Board participation.


            With regards to the selection process, Lachenauer did not feel that a separate resume was warranted for the process. In his view, he has to do as much, if not more, due diligence for Board selections than a standard executive search. If the resume is more an overview of candidate’s background then it will lack the details that are often the important selling points in presenting a candidate for consideration. The accomplishments are critical and will need to be shared, and therefore, should not be excluded from the resume. Further comments by Lachenauer included:

Ø  The selection process is intended to find a candidate that will be entering into a long-term relationship & participation on the Board. As difficult as the interview process can be, it’s just as difficult to leave the Board, which puts a heavier emphasis on the long-term views.

Ø  Board members are not going to find you…you need to find them. 

            As a response to a question regarding whether an individual should pursue a Board seat for a public or private company, Folino commented that “there should be no consideration to Public or Private, but that it should come down to your background and the experience that you will bring to the table”.  Tomorrow I’ll wrap up my notes on the panel discussion with an overview of the key areas to consider with respect to choosing a Board, the management of risk in such an appointment, and additional considerations before accepting an offer.


Thanks for reading . . . .


Jeffrey Ishmael