"Key Responsibilities for Directors - The New Reality" |
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1. A Director must be proactive, rather than passive. The Director will be held responsible for what the Director "should have known," rather than what the Director was told by management. The Director needs to make appropriate inquiries and to pursue follow-up inquiries. 2. Being a member of the Board of Directors of a public company is a "job," and not an avocation. A Director of a public company needs to plan to spend 20 to 30 days per year on performing Director duties and reviewing and analyzing Company information and issues. 3. The public company Board room culture of "passive politeness" is now replaced with a culture of "aggressive skepticism." A Director needs to be aggressive, passionate, inquisitive, skeptical, challenging, and persistent. 4. The Board of Directors must work together as a "functioning team," and not as a collection of individuals who attend the Board meeting and then have little interaction after the meeting. Each Director needs to understand the Company's business and to be able to help the Company make business decisions. The Company's Board and management team need to have a common understanding as to the Company's vision, strategic plan, and the necessary steps (and alternative steps) for achieving that strategic plan and vision. Each Director needs to have a passion to help the Company achieve the Company's strategic plan and vision. 5. Each Director must "add value" to the Company's Board, or get off the Board. This requires hard work, dedication of time, and active involvement. 6. The Board needs to be proactive in setting the agenda for Board meetings, and not rely solely on the CEO for agenda items. 7. The Board must hold an executive session meeting (without the CEO) at every Board meeting. 8. The Board must be proactive in a "risk assessment analysis" for the Company, rather than merely responding to events after they happen. The Board must explore for, and find, the "red flags" that may in the future impact the Company's success. 9. The Board must receive "quality information" which is meaningful and understandable, rather than an unmanageable quantity of information about the Company. * The foregoing is a summary of comments by Donald W. Grimm, who is an experienced Director on public and private company Boards, made at the CDF Program entitled "Constructing the Ideal Board," held on January 19, 2005. |