The Board Work Ahead: Evaluating Your Board for 2023

The Board
Work Ahead
Evaluating Your Board for 2023
October 20, 2022

OnBoard | ©2022 Passageways, Inc. Confidential. All rights reserved.
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A few notes :
3

What we do:
Inspire and enable
organizations to do their best
work in a digital world.
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Who we serve:
• 3,000 organizations
• 12,000 committees
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• 100,000 subscribers
• 32 countries

There are often 3 kinds of board meetings…
• The board meeting you prepared for
• The board meeting you had
• The board meeting you wished you had
6

@onboardmeetings
/onboardmeetings
onboardmeetings.com

Today’s Speakers
Josh Palmer
Head of Content
OnBoard
Donna Hamlin PhD
Founder & CEO
BoardWise

The Board
Work Ahead
Evaluating Your Board
for 2023 & Beyond

What it Takes
Boardwise, Inc.. - All Rights Reserved

11
A Bit Of History:
When Did We Start Looking at Board Performance

Our National Philosophy About Governance Affects How We
Set Structure, Regulations and Compliance
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Orientation Belief About Governance
Checks and Balances Distribute power to avoid abuse
Behavior Define clear ethics, moral rules, hire with
integrity
Market Discipline Market pressures improve governance
Rules and Processes Apply strong rules and processes and
monitor
Marketing Ordering Fix the overall system within a market sector
and governance will improve; e.g., overhaul
the banks
Five Philosophies

Source: Frijns 2009
Government
Economists
Governance Profile Before the Financial crisis
10/20/22

Source: Frijns 2009
Government
Economists
Governance profile after the financial crisis
10/20/22

Globally, Boards Went Under Scrutiny to Change
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.
Structure Accountability
Skills &
Competencies Fit
Process
Efficiencies
Leadership

Early Reactions: Evaluating Board Performance
Insulted by over-
regulation, ignores
the evaluation
process, wait and
see if we get caught
and then plead
ignorance
Ask GC to make
compliance checklist
and file the proxy
items for them;
trivialize the effort
delegated to GC
Allocates 5 minutes at
board meeting to ask
“How’d we do?” Have a
group nod, pat each
other on the back for a
job well done. Mocks
the purpose of
evaluation.
Ask a third party
to evaluate but
choose one with
direct conflict of
interest, e.g,
search firms
Assess but not
thoroughly; focus on
select topics, e.g.,
processes, structure,
committee structure
but ignore group
dynamics, committee
leadership or
information symmetry
Conduct their
own evaluations,
subjectively,
compromised
10/20/22
Scofflaw Perfunctory Backslappers
Controllers Conflicted Half a Deck

Evaluating Board Performance
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Personal Best
• Conducts annual evaluation comparing relative progress
• Athlete’s approach to incremental improvement
Normative Best Practices
• Conduct annual evaluation with a common set of indicators ,
comparing to norms within their industry peers or comparable-
sized companies.
• Learn about best practices to accelerate improvements.
• Evaluate across 12-10 key performance criteria and track impact
of governance on corporate performance, year after year.
• Directors demonstrate deep commitment to learn, share and
improve.

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Best Practice Today: Independent Reviews
• Bring an objective, cost-effective, standards-based approach to evaluations
which provides more robust, useful data and solutions to governance
improvement.
• Address the rapidly escalating regulatory requirements for dynamic changes in
data to disclose
• Maintain accurate governance and corporate performance data over time, to
determine what factors contribute to sustained governance excellence
• Provide reliable performance improvement and best practices to boards for
adoption
• Provide the optimal source for qualified directors for global companies
• Be the source for thought leadership in global governance, based on the
intellectual property within the database maintained.

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Best Practice Today: Independent Reviews
A No Conflict of Interest Approach
• Secure objective third party to perform evaluations,
maintains directories and conducts research and education.
It should not provide consulting services for remediation
improvement.
• It can refer to established strategic partners

Board Evaluation: Topics Reviewed
• Board access to information
• Board composition
• Board meeting quality and effectiveness
• Board accountability
• Board committee effectiveness
• Board member interaction
• Board standards of conduct
• Board evaluation of company management
• Management-board relations
• Board leadership
• Director self assessment
• Director peer evaluation
• Risk mitigation
• Board compensation
• Board potential
• Board philosophy and institutional framework
• Personal demographics: diversity and problem-solving orientation
• Corporate disclosure and compliance
Tied to….
• Corporate performance metrics and
• Industry and global best practices

Now, There is More!
Changes Underway to Address Historically Shifting
Board Content Expansion
• ESG issues
• Cybersecurity
• Climate change
• Long-term strategy
• Shareholder relations
Board Talent
Adding new subject matter experts to contribute to areas in risk
management for cybersecurity, diversity, environmental changes and long-
term strategic thinking.
Board Size 5-9
directors
9-11
directors
More Board Meetings 6 8-12
Committee Work Changes
• Wider Duties
• Separation of Work • Compensation
• Audit& Risk
• Human Capital Mgt.
• Risk
• Finance& Audit

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New OnBoard customers on or
after Jan 2020.
OnBoard customers
before Jan 2020.
• Long time “tech-enabled”
boards maintained
efficient use of board
meeting time (3-3.5
hours) before and after
Covid.
• 1st time tech enabled
boards required more
meeting time (~4 hours)
• However, with adoption
and better use of tech,
new customers drove
meeting time down and
“efficiency” up

Changes to Address
New Committees and Structure Changes
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While stock exchange standards call for companies to
have at least three committees – audit, nomination and
governance and compensation – the majority of boards
of large companies have evolved to four or five
committees and are now growing even more.
• As of June, 2022, the S&P 500 companies with now six
committees has grown to 13% this year.
• To be fair, smaller companies with revenues less than
$100 million have three or fewer committees and fewer
directors currently.
• By industry, the types of companies taking the lead in
expanding their committees are in financial, materials
and utilities sectors. Others are beginning to follow.
Committee % of S&P 500
Executive 30%
Finance 27%
Science & Technology 16%
Risk 13%
Health/Environmental
Safety
11%
The growth and change in committee types is
important to evaluate for your board planning.

Evolution of Governance:
Reframing Core Principles for
Future
u Purpose
u Accountability
u Objectivity
u Information Agenda
u Board-Mgt. Relations
u Strategy/Risk
u Company Talent Composition
u Company/Bd. Culture
u Board Composition Refresh
u Transparency Engagement
American Board Commission/NACD, 2022

More Talent, More Topics and More Time Ahead!
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Bring your board together to explore
• Redesign
• Planning for Work Assignments and
Coordination
• Permanent Education
• Attracting/Retaining Talented Qualified
Directors
• Reframe Governance for Future

New
Practices to
Consider
Create and offer director education/sessions on key
topics/speakers at dinner the evening before board meetings
or at breakfast before meetings begin
Learn
Board strategic planning for board members to consider:
•Board’s long-term contributions to business success and
•Best ways to address governance trends, forces and changes ahead
Board
Foresight
Assign directors as mentors for executives in management to
enhance working relationships
Collaborate
Review best practices in governance globally to consider for
adoption
Look
Around

High Performance,
High Impact Boards

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Factor Low Med High
Frequency of meeting per year 10-19 days 19 days 40 days
Proactive: commissioning reports, requesting information; getting out to
meet customers, stakeholders, staff
Accountability: full board involvement, engagement, participation; full
evaluations of board annually; do homework/prepare for meetings
Deep knowledge/exposure of business and industry
Clear delineation between board and management roles:
Written protocol between board and management duties
Clear delegation of committee work
Clear role of board in strategy as innovative thinkers for the long view;
futurists; analyze value drivers, alternative strategies, use of resources,
test ideas
Annual agenda and monitored plans
Regular review and nurture of talent and senior management
Healthy debate, dissent: no subject is undiscussable
Aligned on risk appetite: more focus on risk with separate committee
Transparent communication: bad news/controversial topics brought
forward to all; no factions and back channels of information; employees
are open with board
Group chemistry/dynamics: healthy culture; open dissent, respect, trust,
candor, spirited give and take, intelligent questions; diversity of thought
Boardwise, Inc..
- All Rights
Reserved

What Makes Great Teams Great
Comparative Study of Teams Which Succeed vs. Fail
• Attendance
• Training to analyze complex issues
• Risk awareness
• Age of members
• Size of team
• Capacity to perform
• Failure correlates to dysfunction
within the social system
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Formal Aspects of Team Failure
Have a robust, effective social
system with a virtuous cycle of
respect, trust and candor.” - AICD
Source: Jeffrey Sonnenfeld, Harvard

Dynamics and Diversity… and a European Nudge
Defining diversity and its impact
Focus:
Diversity of Thought
10/20/22

Diversity and Outcomes
u Much of the research focuses on mix based on
gender or ethnicity
Creates positive impact on….
u Tensile strength for improved decision-making
u Check and balance for debate and discussion
u Increases innovation and creativity
u Provided…….Group dynamics operate with clear
rules of engagement and respect for others
A mix of skills, qualifications,
experiences and thinking styles
creates more direct access to
diversity
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Stories, for Example…..
Sir Ken Robinson
10/20/22
Stories,
for example.. Sir Ken Robinson

Four Orientations to Problem Solving
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Action Process
Strategy People

Governance Orientations
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ROLE Focuse SPEED VISION NICKNAME STYLE COMPLAINT
Action:
Accomplishers
Results Fast Short-term Long-
ranger
• Workaholic
• Not time for seminars
• First in still here
• No time for meetings
Not enough
time
Process:
Regulators
Details Slow Narrow Bureaucrat • Meetings every MWF
Arrive/leave same time
• Clean Desk
• Staff comes 1 minute before
• Same meeting agenda for 12yrs.
Not enough
rules
Strategy:
Creators
Change Fast Wide Arsonist • Overloads subordinates
• No fixed time
• No agenda
• Talks too much
• Starts fires; rushing; crisis
• Change priorities
• You can’t disagree with me; I changed
my mind
• No sense of time
Too few
good ideas
People:
Uniters
Teamwor
k
Slow Wide Super
Follower
• Gets lots of people involved
• Checks in on everyone
• Incubates on front-end of projects
• Breaks down steps
• Develops/manages great execution
Poor
planning
None Survival None None Deadwood • Due to rate of change, can’t keep up
• Finally, someone without issues!
No
complaints

UNIFIER
[Compromiser]
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Know Your Governance Style
CHANGE DRIVER
[Micromanager]
CHALLENGER
[Criticizer]
ADVISER | EXPERT
[Patronizer]
STATESMAN
[Politician]
Collective
Individual
INITIATE = Short-term,
difficult strategic
change
REACT/MONITOR = Short-
term, less difficult strategic
change
IMPLEMENT = Long-
term, difficult
strategic change
MAINTAIN = Long-term,
less difficult strategic
change
Competencies:
Operating; strategic;
public sector;
marketing.
Multinational, global
strategy.
Complex
restructuring.
Divestments.
Acquisitions.
Unfriendly mergers.
Competencies:
Policy-making;
financial literacy;
marketing;
international.
Replace CEO.
Takeovers.
Counter strategy.
Turbulent change.
Competencies:
Legal, human
resources, special.
Monopolistic
environment.
Regulated change.
Friendly merger.
Strategic alliances.
Mature industry.
Cooperative
strategies.
Competencies:
Coach and mentor of
CEO and directors.
Crisis planning and
management.
External negotiation.
Succession planning.
Personal contacts.

Diversity by Style - AAA-rated bank
Change
Driver
Challenger
Unifier
Advisor
Expert
Statesman
Micro-
manager
Criticizer
Compromiser
Patronizer
Politician
-100 -90 -80 -70 -60 -50 -40 -30 -20 -10 0 10 20 30 40 50 60 70 80 90 100

MICROMANAGERS COMPROMISERS
CHANGE DRIVERS
Focus on strategy
and change
UNIFIERS
Focus on people
and cohesion
POLITICIANS
STATESMEN
Focus on Company’s
best interests
CHALLENGERS
Focus on action
and results
ADVISOR EXPERTS
Focus on process
and rules
CRITICIZERS PATRONIZERS
GOVERNING STYLES
FIN TECH CORPORATION
June 2021
■ Large
Investor, Adam ■ Large
Investor, Jim
■ Founder/CEO;
Jason
■ Independent, Donna
■ Medium
Investor, Andrew
§ Co-
Founder,
Rob

“Diversity is a fact; inclusion is a choice. “
- Justin Trudeau, Prime Minister, Canada
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Discernment…

Friendly Amendment….
Diversity is a
fact; inclusion is
a competency.

Newest Data
• 3,000 of the largest publicly traded companies in the
US show causative link between inclusion practices
and better innovation of products and services
• Improvements in financial performance
• Improved returns in hedge funds
• Higher corporate valuations
• Interviews with 160 executives
⎼ 80 Women
⎼ 80 Men
• Reports of actual outcomes tied to diversity and
inclusion
Boardwise, Ltd. - All Rights Reserved 10/20/2
2

Skills Tracking
44
• Manage skills tracking for your board within
the platform
• Identify skills gaps in your current board
• Make informed decisions for new member
recruitment or succession planning that
aligns to your strategic direction
• Save time and minimize complexity by
having your board composition data in a
central, secure location
Build high-performing boards with insights to help recruitment and succession planning efforts

Board Bona Fide Profiler
Change Driver
Challenger Statesperson
Unifier Advisor/Expert

Group Disciplines
• Build boards of highly diverse thinkers
• Provide communication skills, director
and management effectiveness and
team dynamics training, especially in
key skills:
o LISTENING
o APPRECIATIVE INQUIRY
o SOCIAL FITNESS
o COURAGEOUS CONVERSATIONS
o PEER-BASED LEADERSHIP
• On-boarding program to engage new
members and build effective
relationships

Personal Disciplines
Boardwise, Ltd. - All Rights Reserved 10/20/22
• Read articles and books from authors with
whom you disagree.
• Ask people for their opinions that you
know you don’t want to hear.
• Build a 3:1 ratio: Ask 3 questions for every 1
declaration.
• Ask until you understand before declaring
a solution.
• Practice and improve your objectivity and
accuracy in processing what you are told.
• Seek and speak the truth.
• Test yourself with flexible thinking games
and tools.

Donna Hamlin
dhamlin@hhboardwise.com
510-517-7791
boardwise.biz

You’re Invited!
October 20 @ 2:00 PM ET
w/ Nick Donofrio
Nick Donofrio
IBM Fellow, NACD Director,
Board Advisor, Author
Technology as Your
Board’s Advantage:
How to Create
Sustained Innovation

Quick Poll
Source: Poppins 6pt
50

Q&A
Source: Poppins 6pt
51

THANK YOU
Source: Poppins 6pt
52

The Board Work Ahead: Evaluating Your Board for 2023

The Board Work Ahead: Evaluating Your Board for 2023

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