Lists for Governance & Board Candidates

My friend Bob Tricker, a leading governance academic and expert, has written a wonderful online booklet, Twenty Practical Steps to Better Corporate Governance for Corporate Secretaries International Association. He sought input from experts worldwide and came up with the following list:

1. Recognize that good corporate governance is about the effectiveness of the governing body — not about compliance with codes
2. Confirm the leadership role of the board chairman
3. Check that non-executive directors have the necessary skills, experience, and courage
4. Consider the calibre of the non-executive directors
5. Review the role and contribution of non-executive directors
6. Ensure that all directors have a sound understanding of the company
7. Confirm that the board’s relationship with executive management is sound
8. Check that directors can access all the information they need
9. Consider whether the board is responsible for formulating strategy
10. Recognize that the governance of risk is a board responsibility
11. Monitor board performance and pursue opportunities for improvement
12. Review relations with shareholders — particularly institutional investors
13. Emphasise that the company does not belong to the directors
14. Ensure that directors’ remuneration packages are justifiable and justified
15. Review relations between external auditors and the company
16. Consider relations with the corporate regulators
17. Develop written board-level policies covering relations between the company and the societies it affects
18. Review the company’s attitudes to ethical behaviour
19. Ensure that company secretary’s function is providing value
20. Consider how corporate secretary’s function might be developed

While the short list is of some value, the real value is in the sound advice offered around each topic. For example, Professor Mallin called for boards to give more attention to the “voice” of shareholders. Boards should critically assess their performance, and openly explain themselves to shareholders. The board’s relationships should recognize a “stewardship” role for institutional investors. Companies belong to their shareholders for whom the directors act as stewards.

Jeffrey M. Cunningham, writing for Directorship provides a list of six qualities to look for in today’s board candidates in Wanted: New Directors (3/25/2010)

1. Battle hardened not battle weary
2. Bureaucracy cutter
3. Healthy not oversized ego
4. Trusted comrade
5. Ready for action
6. Numbers and sense

I’d like to see “committed shareowner advocate” added to the list.