Chapter 5 Board operations Flashcards
what are the basic building blocks of board’s operations
- Substantive issues
- Information architecture
- Group Dynamics
Focus on substantive issues =
Devote enough time and attention to the topics and issues that really matter
Divide agenda topics in five categories:
- compliance
- people
- operating effectivness
- strategy
- urgent concerns
What is Group Dynamics ?
Quality of Interactions
what is the good pratices for Group Dynamics ?
- Rules of engagement
- Board leadership
- Executive sessions
- Offsite meetings
- Board evaluation
- Managing the unwanted director
Explain the information architecture
Give the right information in the right form at the right time
What is the different channels of information for directors ?
- Board briefing
- Management letter
- Employee Survey
- Director Outreach
- Reports from committees
What is the Corporate Strategy ?
is how a company expects to create long-term value for
shareholders and stakeholders, within the confines of corporate mission
What are the Key performance measures ? KPIs
- Financial and non-financial
- evaluate management performance and award compensation
3 Strategic Pillars :
Capital allocation
Operations
Sustainability
What is Risk Management ?
loss of value that occurs when things do not work out as planned.
Who determine the Risk tolerance of the corporation ?
The board
TRUE or FALSE ; the risk-free is possible ?
FALSE
Some of the risks that the firm faces are:
operational, financial, reputational & compliance
What is Risk management ?
Risk management is the process by which a company evaluates and reduces its risk
exposure
The Labor market por CEOs is ;
not efficient
tight
who are the most promising source of candidates ?
Internal executives
Reason of the CEO turnover :
- retirement
- recruitment to another firm
- dismissal for poor performance
- disagreement with the board over corporate strategy
- misconduct
New CEO, what are the advantages of insiders ?
- familiar with the company
- bring continuity & smooth transition
- the board has opportunity to evaluate their performance
An external successor might be preferable when:
- The company needs to change direction.
- There is no insiders with sufficient talent.
- An outsider with unique experience is needed
True or False : for the CEO succession plan Utmost confidentiality is required until a decision is ?
TRUE
