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EFFECTIVE CHAIRING SKILLS – or –

EFFECTIVE CHAIRING SKILLS – or –. Large Credit Union Conference September 18, 2008. Dealing with the Rhinocerous in the Room. The Context. Never before been as much attention and focus on “good governance” Increasing pressure on Boards to perform at a higher standard

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EFFECTIVE CHAIRING SKILLS – or –

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  1. EFFECTIVE CHAIRING SKILLS – or – Large Credit Union Conference September 18, 2008 Dealing with the Rhinocerous in the Room

  2. The Context • Never before been as much attention and focus on “good governance” • Increasing pressure on Boards to perform at a higher standard • Recent high-profile governance failures not result of Board’s lack of business acumen - rather their inability to “act like a board is supposed to act”

  3. The Context… • Most corporate failures can be attributed to failures in governance • Most failures in governance can be attributed to the inability to step up to the “difficult people issues” • Effective Chair skills reduce potential risk

  4. Meet the Rhinoceros – the “Difficult” People Issues: Governance Risk • Leading through the difficult people issues will be the most challenging responsibility you face as Chair • Requires strong leadership, integrity, strength of character, emotional intelligence, wisdom • Lean on your governance policy/process to ensure that expectations are clearly communicated, there is commitment by individual Directors, and that the issues are “de-personalized” as much as possible

  5. The Risks… • Inability to fulfill accountability to Members • Legal/regulatory risk • Potential personal Director liability • Potential negative impact on achieving desired business objectives

  6. Facing the RhinocerousHead On If a rhinoceros were to enter this room now, there is no denying he would have great power here. But I should be the first to rise and assure him that he had no authority whatever. Anonymous

  7. Leading Through the Difficult People Issues

  8. For Example… • The “silent” Director • The “non-silent” Director • Board polarization around “new” way of thinking versus “old” way of thinking

  9. For Example… • Director that can’t take his/her “customer” hat off • The non-contributing - unprepared/absent Director • Directors who take the meeting to places unknown…

  10. For Example… • Board meetings that take place at the water cooler – or on the drive home • Under performance (Board, individual Directors, CEO)

  11. The Risks: • Ineffective or dysfunctional Board • Lack of strong leadership • Lack of clear strategic direction • Lack of clear direction to management • Poor Board/Management relationship

  12. What Does it Take? Strength Training

  13. The Solutions… • Bad news – there are no “miracle” solutions to people issues • Good news – you can, as Chair, make a difference • Put in place governance polices/process that will help avoid them arising in the 1st place • “De-Personalize” it

  14. Strength of Character Leadership is a combination of strategy & character. If you must be without one, be without the strategy. Gen. H. Norman Schwarzkopf

  15. Role of a Chair Inside the Boardroom: What Does it Take?

  16. Responsibilities • Assuming principle responsibility for operation & effective functioning of Board • Providing overall leadership without limiting principle of collective responsibility • Ensuring Board is able to function independently of management • Generally (Board controlled Board meetings – not management controlled) • In camera meetings • Engaging external advisors

  17. Responsibilities • Oversight/control over Board agendas (reviewing the “right” things, in the “right” way, with the “right” information) • Chairing meetings effectively (lots more in handout) • Ensuring Board compliance with governance policies & process • Maintaining effective relationship with CEO & Corporate Secretary

  18. Skills & Qualifications • All those required by individual Directors & knowledge of internal & external governance best practice • Following additional attributes: • Strength of character & professional approach • Emotional intelligence • Credibility, stature, and ability to command respect (Meeting participants need to know that you are “in charge” without being unnecessarily heavy handed) • Willing to accept accountability for meeting outcomes • Ability to “step up” to table when required and deal with difficult people issues

  19. Additional Attributes • Ability to speak, listen and think at the same time • Ability to understand the issues and the larger context within which individual issues are being discussed (strategic objectives, etc. – don’t lose sight of the forest) • Ability to summarize discussion and identify key issues (what’s important, what’s not) • A respect for the integrity of the process (If you don’t respect the process, neither will the Board) • Directors generally will “step up” to the tone set by the Chair • Sense of humour

  20. Helpful Hints Tricks & Tools

  21. Challenges – Beyond Parliamentary Procedure • Effective meetings usually have little to do with adhering to rules of parliamentary procedure • Has more to do with skills & attributes of Chair (and board) in dealing appropriately with behaviour, staying focused • Maintain a speaker’s list • Your credit union will likely have already defined your expectations – Chair’s responsibility to ensure behaviour is consistent with expectations

  22. Skill or Art? • Chairs must be able to carry on two different conversations at once (external and internal) • Both participating directly in the meeting as well as “watching” the conduct of the meeting itself • Set the right “tone” from the beginning – a respect for the process – for example, be rigorous around walk-on agenda items, cell phones, blackberries, etc. • Let participants and management know that your expectations are that due process will be followed

  23. The Conversation in Your Head • Must be focused on the discussion and debate – but at same time must be asking themselves questions like: • Has this gone on too long? • Why haven’t we heard from Director “x”? • Have we heard too much from Director “y”? • Have we gone off topic? • Are we straying into micro-management? • Are we focusing on the pertinent issues? • Am I hearing any consensus – and if so what is it? Or in what areas do we disagree? Can I try to formulate summary now? • Are we really clear about what we’ve decided? • Is management really clear about the direction we’re giving? • Read the faces & thought bubbles around the table

  24. Consensus • Question: Is it the Chair’s responsibility to achieve consensus among the Board?

  25. The Lone Ranger & Tonto • And remember what the Lone Ranger said to Tonto

  26. Chair’s Role Inside & Outside the Credit Union

  27. Before Meeting • Ensure agenda is focused on “right” things, in “right” way, with “right” amount of time allocated, and “right” information with which to make a well-informed decision • Ensure material out to participants in sufficient time • Familiarize yourself with issues & topics to be discussed (are there any items that may require an in camera session?) • Determine what the key issues or questions for the participants will be – in advance (this will help you ensure and/or guide the discussion in a manner that achieves expected outcomes)

  28. Before Meeting • What requires approval or is for information only, etc. (Familiarize yourself with “why” something requires approval – legal or regulatory requirement, Board policy, etc.) • Understand the background/history of the agenda item • Ensure that management will be speaking to key issues/executive summary – not repeating or reviewing all material sent out in advance

  29. Before Meeting • Review minutes from last meeting – matters arising? • Confirm expected attendance and ensure quorum will be present • Note - Clarify with Committee Members attendance expectations, that absences should be communicated to Chair as soon in advance as possible – share thoughts on agenda/material with Chair so that Chair can share those thoughts with Committee, etc.)

  30. Beginning of Meeting • General welcome & introductions if necessary • Set tone/atmosphere for meeting at outset • Start on time • Set ground rules (remind participants to turn off cell phones, blackberries, etc.) – get participants attention from the outset • Review agenda and clarify/confirm with participants

  31. Beginning the Meeting • Focus on Directors around the table – management are there as resource only – this is your meeting • Clarify participant preference – would they prefer to ask questions and discuss points raised during presentation – or restrict to clarifying questions only during presentation? • Assume participants have read the advance material (if they haven’t – this will encourage them to do so in future)

  32. DURING THE MEETING Now…for the Good Stuff

  33. In Theory • Things should go according to plan • Monitor management presentations & intercede when necessary • Are they on point? • Taking too long? • Addressed the key issues? • Is management talking more than Directors? • Is “ask” clear?

  34. In Theory • Initiate and monitor discussion and debate • Are Directors contributing equally? • Is one/several Directors doing all the talking while the rest remain silent? • Read the “thought bubbles” • Encourage putting the real issues on the table • Has a point been raised more than once by the same Director? • Once you’re comfortable that full discussion & debate has occurred – bring discussion to closure • Close by summarizing & clarifying issue resolution (decision or direction to management – what remains to be resolved or deferred?)

  35. In Theory • Note the Directors indicating they wish to speak • If necessary, keep list of order of speakers • In reality – easier said than done • Question – To what extent should the Chair actively participate in discussion and debate?

  36. End/Subsequent to the Meeting • Conduct a meeting “de-brief” at end of each meeting. Don’t just ask for general comments – ask for specifics: • What did you like about the meeting? • What didn’t you like? • Review draft minutes for accuracy and completeness • Assess personal performance (ask yourself how you did – and where you could have done better)

  37. Role of a Chair Outside the Boardroom

  38. Responsibilities • Fulfilling responsibilities of office as articulated in by-laws • Taking a leading role in ensuring effective communication between Meridian, Members, stakeholders, industry, regulators, and community • Representing the Board and its policies externally, including communicating Board decisions/positions to regulators and other government officials

  39. Outside the Boardroom • Taking a leadership role in ensuring effective Board and individual Director training & education planning & execution • Proactively lead the Board in its governance performance assessment processes – including mentor/performance related discussions with individual Directors • Fostering & facilitating an effective relationship between Board and Management (including acting as a liaison between the Board & CEO regarding compensation and/or performance assessment)

  40. Outside the Boardroom • Ensure, with Board, quality of external reporting (Annual reports, etc.) • Ensuring acquisition of requisite skills & qualifications & keeping up to date on governance best practice • Mentor to Vice-Chair (or successor) • Chair annual general and special meetings of Members

  41. SUMMARY • Chair performance should be assessed regularly • Goal – participants leave meeting feeling their time was well spent • Goal – decisions/direction is clear – both to Board and to management • It’s really all about maintaining a “presence” and commanding respect– without being autocratic or overly controlling

  42. Summary • Remember that director liability arises more from a lack of due process and due diligence then it does from poor business judgment – so the process must be respected without jeopardizing meeting effectiveness • The greatest governance risk exists in the things “unsaid” which become the risks “unknown” • Know the “Chair’s Vocabulary”

  43. Phrase • To Silly Sally – Thanks Sally, we appreciate your perspective and think we have understood the point, which is…

  44. Translation • Sally – you’ve repeated yourself 12 times, and I think we’ve all got it – can we move on and possibly hear from someone else?

  45. Vocabulary • In the interests of time…

  46. Translation • Ok…enough of that…

  47. Vocabulary • Perhaps we could hear the rest of the Board/Committee members perspectives

  48. Translation • We’ve heard enough from those who keep repeating themselves – it’s time for the rest of the Board/Members to speak up

  49. Vocabulary • I think your perspective as a Member and a customer is very helpful for the Board to understand the potential implications of its decision

  50. Translation • Take off your customer hat and think bigger – like on behalf of the entire Membership – be a director – not a customer

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