Mark Collinson and Elaine Ketchmere of Compass Investor Relations present micro-cap best practices in corporate governance. This is from the webinar, Corporate Governance Best Practices & Communication Strategies, sponsored by OTC Markets Group and Compass Investor Relations. Overall, excellent advice; I did have one nit to pick.
Collinson and Ketchmere share what investors expect from companies in today’s highly-competitive capital markets. Whether your company is newly-listed or is at a more mature stage with a wider shareholder base, this webinar provides ideas to improve your corporate governance and attract new capital and wider ownership.
This is a very thoughtful presentation. Clarity, consistency, compliance and credibility are certainly important in corporate governance. This pair of experts lay out, in simple and easily remembered fashion, several key points in this brief discussion.
However, I must differ strongly from Mr. Collinson when he advises senior executives to look to their own contacts first when it comes to recruiting new board members (Watch minutes 21-23 of the video clip.) Yes, this might be the quickest way to find directors you will get along with but that is not the primary foundation for a good board. That is not micro-cap best practices in corporate governance, although it is common practice. Having senior executives pick the board that will evaluate their performance sets up an obvious conflict of interest.
My advice would be to first look at low-cost databases, such as the Diverse Director DataSource (3D) available through the Equilar Diversity Network. It is critical that you look outside your comfort zone for directors who are more likely to challenge current directors and management from a different perspective. Finding diverse candidates with demographic backgrounds and skill sets that complement your current board is one of the most important micro-cap best practices and will lead to more effective corporate governance.
Search Corporate Governance (aka CorpGov.net) for additional advice for small- and micro-cap companies. Three examples follow:
- A Big Reason Small-Caps Undertake Bad Financings: Board Composition offers excellent advice from Adam J. Epstein who assists small-cap boards through his firm, Third Creek Advisors.
- California Diversity Forum 2017: Part 2
- California Diversity Forum 2017: Part 1
Comments are always welcome.