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Boardroom Evaluation: The Imperative of Accountability

Explore the evolution of boardroom governance, the need for accountability, and strategies for evaluating board and executive performance. Learn about regulatory principles, review processes, and challenges in driving positive outcomes.

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Boardroom Evaluation: The Imperative of Accountability

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  1. 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

  2. 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 GCGR 2009+ - GFC, Banking Crisis. Taxpayer bailout - Walker (UK) – ‘Change is needed in the boardroom’ Passive oversight -> active improvement -> setting direction -> scrutiny and risk management

  3. 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

  4. 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)

  5. 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.

  6. 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

  7. Review - Who? • Directors • Board • Chair • CEO / CS / CFO • Committees

  8. 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

  9. 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

  10. Board Accord • Client focused • Multiple approaches • Qualitative and quantitative • Capacity building – PD and PD

  11. Board Accord Metric

  12. Review - Challenges • Resistance • Chair • Them/Us • Structure – member based • Board/Management – boundaries • Self awareness • Culture • Consultant • Difference

  13. Board Accord “Aligning aspiration and outcome for profit, people and planet” Robert Gordon BEd M CounGAICD Director of Programs 0405 541 510 robert@boardaccord.com.au www.boardaccord.com.au

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