|
|
|
Deborah E. Wallace
Principal
Wallace Consulting
Board Advisory Services
Phone:
781.259.0550
Cell: 617.875.7069
Fax: 781.459.7999
|
|
|
|
Board Orientation
Wallace Consulting, Board Development, and Board Advisory Services
specializes in Director Orientation.
In order for a board to contribute maximum value to its organization, it
must have a solid understanding of the fundamental elements of its
organization such as its strategic direction, finances and financial
reporting standards, reputation (both internal and external), leadership
strength and board performance.
It must also have an unambiguous understanding of the provisions of
Sarbannes-Oxley (this applies to non-profits as well as to public
corporations), its role in relation to that of the CEO or Executive
Director, a firm understanding of expectations held by the organization’s
leadership and credibility with the investment community.
Thorough understanding of the risks involved in board membership– for the
board as a whole and for individual board members – and management of that
risk is paramount especially in today’s environment of intense scrutiny and
the demand for more transparency.
In today’s suspect and litigious environment, board orientation is a
practical necessity, not only because it can be a highly effective mechanism
for unifying a board around so many complex issues, but also because it
makes explicit those aspects of board membership that are so often implicit
or never addressed.
As we have seen in the spate of recent corporate scandals, chronic issues
that are not discussed, communicated and actively managed can lead to
disaster for a board and ultimately for the organization it leads.
Some
examples of topics that should be at the core of any orientation process
include:
Communication and Public Relations: board members must understand what is
communicated to whom, by whom and in what manner. A clear understanding of
their obligations regarding public disclosure is imperative.
Why? Outside the boardroom, each individual board member represents
the organization, sometimes formally, but often not. The slightest misstep,
whether it be lack of communication, ill-timed communication or wrong
information can result in embarrassment, damaging publicity and even
litigation.
Comprehensive knowledge of the organization: It is not unusual for a
board member to be asked to temporarily fill a management role that has been
vacated. While a board member may be selected because of his or her
expertise in a particular area, an understanding of how the business
operates, of its financial picture and of its culture is key during this
time of transition.
Why? When a board member acting as an ad hoc employee does not
adequately understand how the organization works day to day, the
organization may discover that what they thought was an asset quickly
becomes a serious liability.
Crisis management: Unexpected events that throw an organization into
turmoil such as the ousting of a CEO or Executive Director, a proxy fight,
the loss of a major funding source or the threat of a hostile takeover,
require rapid and organized decision-making on the part of the board. All
board members need to understand the protocol and processes associated with
that decision-making.
Why: An organizational crisis can easily become a feeding frenzy for
the media. Unless the board is in the forefront of explaining with some
measure of confidence how it plans to resolve the crisis (at least in the
short term), the media will naturally fill the vacuum and potentially
influence the course and in some cases the outcome of the crisis. In
addition, the organization’s various constituencies will be quick to judge
the board’s response. Ultimately, their judgment will affect stock price.
|
|
|
