Julie Garland McLellan – Page 2

June 27, 2012January 29, 2022

How much sway should a CEO have? – a dilemma

Female CEO wearing a blazers working in the office

Nagachandra is a director on the board of a not-for-profit company. The CEO has a board seat. This position was argued against by the former chairman but other board members prevailed saying that the CEO was firstly responsible and trustworthy and secondly more knowledgeable about the operations than any non-executive director could ever hope to be. At that time Nagachandra had felt comforted by the idea that the CEO shared the same legal obligations as the directors. Immediately after the election of the CEO the former chairman resigned and was replaced by long serving board member. The CEO played a more active role to help the new chairman get settled in.

The current chairman has just indicated to Nagachandra that she would like to step down from the role as it is a big impost on her time. She believes that Nagachandra would make a good successor and wants to forward his nomination to the board and, ultimately, the membership for voting in at the next AGM.

Nagachandra has reflected deeply on the role of the chairman and has thought about the personal dynamics and quality of discussions at recent board meetings. He has reached the conclusion that the CEO exerts a very strong influence over the board and that this reduces the Chairman’s role to a ceremonial and procedural one. He is not sure how either the CEO or the board would react if he started to put in place processes to limit the CEO’s influence in the boardroom. He is also not entirely sure that the current situation is harmful to the interests of the organisation although it is not currently considered good governance.

What should Nagachandra do?

Many readers of this blog will be familiar with my newsletter The Director’s Dilemma. This newsletter features a real life case study with expert responses containing advice for the protagonist. Many readers of this blog are practicing experts and have valuable advice to offer so, for the first time, we are posting an unpublished case study and inviting YOU to respond.

If you would like to publish your advice on this topic in a global company directors’ newsletter please respond to the dilemma above with approximately 250 words of advice for Nagachandra. Back issues of the newsletter are available at http://www.mclellan.com.au/newsletter.html where you can check out the format and quality.

The newsletters will be compiled into a book. If your advice relates to a legal jurisdiction, the readers will be sophisticated enough to extract the underlying principles and seek detailed legal advice in their own jurisdiction. The first volume of newsletters is published and available at http://www.amazon.com/Dilemmas-Practical-Studies-Company-Directors/dp/1449921965/ref=sr_1_1?ie=UTF8&qid=1321912637&sr=8-1

What would you advise?

Julie Garland-McLellan has been internationally acclaimed as a leading expert on board governance. See her website atwww.mclellan.com.au or visit her author page athttp://www.amazon.com/Julie-Garland-McLellan/e/B003A3KPUO

June 17, 2012January 29, 2022

Regaining Credibility and Gaining Strategic Approval

Businesswoman using her phone while at her office desk

Miriam is the Regional Managing Director for a large multi-national company. She oversees a group of companies that manufacture and sell products across the region and also export from it. One of the subsidiaries in her group is in a country that has a small market for the products and is fundamentally unprofitable.

She has recommended on several occasions that the board allow her to close this subsidiary and supply that market by importing product from other group companies. She has backed her recommendations with detailed market analyses and projections as well as implementation plans.

Each time the board has denied her request and she is forced to continue to see the subsidiary drain her region’s, and the shareholders, profits. Last time the board met in her region she made the usual request and was denied again. She lost her temper and said some fairly harsh words in an unprofessional tone.

Miriam is a professional manager and has produced good results so her transgression was forgiven. However the board is, once again, meeting in her region and she has another invitation to present her recommended strategy to them.

What should Miriam do?

Many readers of this blog will be familiar with my newsletter The Director’s Dilemma. This newsletter features a real life case study with expert responses containing advice for the protagonist. Many readers of this blog are practicing experts and have valuable advice to offer so, for the first time, we are posting an unpublished case study and inviting YOU to respond.

If you would like to publish your advice on this topic in a global company directors’ newsletter please respond to the dilemma above with approximately 250 words of advice for Miriam. Back issues of the newsletter are available at http://www.mclellan.com.au/newsletter.html where you can check out the format and quality.

Julie Garland-McLellan has been internationally acclaimed as a leading expert on board governance. See her website at www.mclellan.com.au or visit her author page at http://www.amazon.com/Julie-Garland-McLellan/e/B003A3KPUO

April 7, 2012January 29, 2022

How to align independent operations? – a dilemma

Woman working with her laptop in a workplace

Kate is a director on the board of a large national not-for-profit company. The board is comprised of well-intentioned and conscientious professionals who bring diverse viewpoints and bountiful energy to their board discussions. None of them are qualified in governance or have experience on other boards but all take their responsibilities seriously and strive to meet or exceed the governance guidelines for best practice that are published by their national regulator.

The company has several branches that operate in in distinct geographic regions across several state government boundaries. Labour laws are state-based rather than national and, when attempting to develop a corporate HR and remuneration policy, the board discovered that different branches have different employment practices and wildly different remuneration structures. Branch managers are quite independent and resist any moves that would align operations nationally with the argument that they must be free to respond to local needs.

Nationally the OH&S laws are being revised to bring the state laws into harmony and Kate’s board would like to use this fact to develop some consistency in their HR practices. Kate has been delegated the task of making this happen but doesn’t know where to start. She is aware that, as of now, the national directors could be held personally liable if the OH&S laws are breeched in any of the branches.

What should Kate do?

If you would like to publish your advice on this topic in a global company directors’ newsletter please respond to the dilemma above with approximately 250 words of advice for Kate. Back issues of the newsletter are available at http://www.mclellan.com.au/newsletter.html where you can check out the format and quality.

What would you advise?

March 6, 2012January 29, 2022

How to start looking forward? – a dilemma

A human-like toy moving on stairs concept

James is a recently-appointed director on the board of a family business. He is the nephew of the founder and has worked in the business for several years since completing his MBA.

He is concerned because the board meetings are all taken up with historical reports and endless discussions of ‘who did what’ and how it affected performance. There has been no forward-looking or externally generated information presented to the board in all the months he has been a member.

James knows that good boards operate at a strategic level and that his industry is changing rapidly with new technology and impending legislative changes. He has attempted to raise the issue with his uncle, who is now the company chairman, but got brushed off with the statement that none of the other directors were complaining.

What should James do?

If you would like to publish your advice on this topic in a global company directors’ newsletter please respond to the dilemma above with approximately 250 words of advice for Graham. Back issues of the newsletter are available at http://www.mclellan.com.au/newsletter.html where you can check out the format and quality.

What would you advise?

February 21, 2012January 29, 2022

Practical Tips for Presenting to the Board

A businessperson presenting in a board meeting

Boardroom presentations are an important part of every senior executive’s personal and professional development. Following the 10 tips outlined below will help you to present like an experienced professional and help your board to make the best and most appropriate decisions following your presentations.

It is far easier to progress your career when you are an executive who is welcomed into the boardroom as a trusted source of good quality information and a pleasant presenter.

Don’t be daunted. Presenting to the board is an important and onerous task. If someone has recommended you to make a presentation in the board room they have done so because they believe that you have what it takes to make a good presentation. Boards are important. Nobody is going to recommend a poor presenter, or presentation by somebody who has insufficient knowledge of the topic. To do so would reflect badly on them far more so than on you.
Be prepared. Understand why the board wants your presentation. Do they need background information on a topic, or a report on progress, or is there a decision which the board must make. If you understand what your presentation is expected to achieve you will be able to develop your presentation so that it does achieve that.
Understand what boards do. The board is the ultimate decision making forum within any organisation. Individual board members have very little power but the board as a whole, acting in consensus, is empowered to perform or delegate all of the business of the organisation. The board should act on behalf of the shareholders. The aim of the board is to enhance shareholder wealth or, in a not-for-profit organisation, to ensure that the organisation does what the people who founded it wished it to do. Make sure that your presentation helps the board to fulfil its aims.
Understand how boards work. Because boards work as a team, rather than as a group of individuals, it is important that they discuss issues thoroughly and form a group decision. When presenting to a board, even if you are giving them background information, your aim should always be to enable the board members to have a good discussion of the topic and reach their own understanding and form a basis the future decision-making.
Understand board protocol. It is normal in most boardrooms for all information to flow to the board under the direction of the chairman. You can expect that experienced board members will address their questions to you through the chairman. The chairman will also manage the amount of time that the board can dedicate to anyone agenda item, and may ask you to spend more on less time on your presentation than previously envisaged depending on the amount of time the board has already spent on other issues. It is wise to enter the boardroom with the ability to present at least 20% more than you planned to present, but without an additional 20% more slides. You should also be able to achieve your objective even if your time is cut by 20%.
Allow the board to prepare thoroughly. Boards need to discuss the information presented, and to do that they need to understand it. Try to provide a background paper or briefing report which can go to the board with the agenda and other meeting papers so that the directors are “up to speed” before you present.
Discuss rather than present. Boards sit through a lot of presentations. Rather than subject them to yet another presentation, try to summarise very briefly the information you have provided beforehand, and then facilitate a discussion with the board members. They will be much happier that the things they say them with anything you can say.
Provide good quality information. Boards need information that is relevant, in perspective, timely provided an appropriate frequent intervals, and reliable consistent coherent and easily comparable with other data, and above all, clear and easily understood. Be sure to name your sources, quote references, and alert the board to any inconsistencies between different data sets that you might have incorporated into your information.
Set the content at an appropriate level. What goes into a report depends upon what the board already know, how important this report is to the board, whether the report is in a written or verbal form, any supporting information, etc. Do not gloss over the risks involved. Boards need to understand the worst possible outcome, the most likely outcome, and the best possible outcome in order to make an appropriate decision having full awareness of the risks involved.
10. Be punctual and polite. Board members are important people, they should not be kept waiting. Be sure to attend the meeting a few minutes before your appointed time and to allocate sufficient time so that if the board is running late you do not have to rush your presentation or leave before the board has finished the discussion. Remember that manners are important and that people will respect you if you respect them. Please and thank you are the two most important words in your presentation. If a board member interrupts interjects, rather than react to their rudeness show your good manners, and pause politely to listen to their comment and deal with it before moving on.

Of course, you must also be a polished presenter. These tips do not obviate the need for expertise in presenting. They add to you presentation skills and allow you to take them to the most important and discerning corporate audience, the board.

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Julie Garland-McLellan has been internationally acclaimed as a leading expert on board governance. See herwebsite andLinkedIn profiles, and get her booksDilemmas, Dilemmas: Practical Case Studies for Company Directors andPresenting to Boards.

January 31, 2012January 29, 2022

How to bring about nationwide change? – a dilemma

A quote on change on a yellow background

Ingrid is a director on the board of a small listed company. The Chairman is an ‘industry veteran’ and, whilst greatly respected for his experience and knowledge is also followed by a reputation for drinking more alcohol than he can safely handle. For the past two years all has gone well and Ingrid has grown to like and admire her Chairman.

The company is now raising capital for a contentious project and, at a recent investment roadshow, the Chairman had to be forcefully removed from the room by the company’s broker because he was slurring his speech and talking nonsense. The broker is very angry that he has been made to look bad in front of his potential investors.

The board called a meeting without the Chairman at which the directors resolved to ask the Chairman to account for his behaviour and undertake either resign or cease drinking. However, when the audit committee Chair spoke with the Chairman he explained that he had been unwell and one small glass of wine which reacted with his medication to cause the incident. The Chairman refused to resign or to make any commitment to curb his drinking.

The remaining board members have, again, met without the Chairman present. They are unable to agree on how to proceed. Some want to express a vote of no confidence and seek shareholder support for removing the Chairman; others take a more lenient stance.

What should Ingrid do?

What would you advise?

January 24, 2012January 29, 2022

Practical Tips for Boards in Times of Crisis

Company directors are currently working harder than ever before as they attempt to steer their companies through the chaos caused by the global financial crisis. Many organisations that have suffered (or even precipitated) the crisis displayed most of the externally visible attributes of good governance. Good governance structures and reporting are associated with good corporate performance but they are not, on their own, sufficient to cause it.

Here are some tips to help your board to value substance over form and to perform under pressure: Continue reading “Practical Tips for Boards in Times of Crisis”

January 13, 2012January 29, 2022

How to handle the do-it-all founder?

Herman has been invited to join the board of a not-for-profit organisation that provides specialist education and training for the non-profit sector. The invitation was extended to him by the CEO who is also the founder and the principal deliverer of services.

Due diligence shows that the company is profitable (making a small but comfortable surplus every year) and has some funds banked to tide it through any tough times that may arise. The staff are paid reasonable salaries and the CEO earns well but is not over-rewarded. Clients appreciate the CEO’s expertise and the forward bookings are healthy.

On the down side – there is nobody apart from the CEO with any real profile or expertise and most clients specifically request the CEO deliver their programs. Staff seem to join for the experience of working with the CEO and leave after a few years. Board members also seem to churn rather more than normal for a healthy company. A former board member told Herman that she felt her time on the board was un productive as there was nothing to do since the CEO had it all under control.

The CEO is 67 and Herman is concerned that there is no succession plan or viable business without her.

What should Herman do?

If you would like to publish your advice on this topic in a global company directors’ newsletter please respond to the dilemma above with approximately 250 words of advice for Herman. Back issues of the newsletter are available at http://www.mclellan.com.au/newsletter.html (see link below) where you can check out the format and quality.
The newsletters will be compiled into a book. If your advice relates to a legal jurisdiction, the readers will be sophisticated enough to extract the underlying principles and seek detailed legal advice in their own jurisdiction.

The first volume of newsletters is published and available athttp://www.amazon.com/Dilemmas-Practical-Studies-Company-Directors/dp/1449921965/ref=sr_1_1?ie=UTF8&qid=1321912637&sr=8-1

What would you advise?

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November 21, 2011January 29, 2022

Cut your losses or run with them? – a dilemma

Graham worked as a management consultant assisting the national operations of a company that has grown over twenty years acquiring ‘non-family’ shareholders who now account for 40% of the capital. The founder’s son, who owns 10% of the shares, heads an overseas division and is a director. The founder retains the remaining 50% and is a ‘passive’ investor.

Graham’s work helped the company grow market share, revenue and profits. He was offered, and accepted, a board seat. He was elected unopposed at the next AGM. Graham performed little due diligence as he knew the domestic operations well and they account for most of the activity.

Continue reading “Cut your losses or run with them? – a dilemma”

October 31, 2011January 31, 2022

MD or CEO – which title suits the circumstances?

Middle aged business executive in conference room

The difference between chief executive and Managing Director is one of thesubtleties that can confuse board members.

Boards have the right to delegate the tasks of running the organisation to any person they rationally believe is capable of performing them. When the board delegates those tasks to one of the directors, that person becomes known as a managing director (or MD).

When the tasks are delegated to an executive, that person does not automatically become a member of the board. They may be given a title such as chief executive, general manager (or GM), executive officer (or EO) and so on. These job titles report to the board but are not part of it.

This distinction is being eroded by the practice of having chief executives who are appointed to the board, and the use of the title of managing director for senior executives who are managing some part of a company but who do not report directly to the board or carry the responsibility of managing all of the company.

In non-profit and government-sector organisations there used to be a firm tradition that the chief executive did not get a seat on the board. This provided a clear reporting line and a distinction between the group responsibility of the board and the personal responsibility of an executive.

In recent times there appears to be an emerging trend towards appointing the person with day-to-day responsibility to the board thereby creating a managing director. This has the advantage of making that person more aware of the director’s liabilities for corporate actions, of the board’s need for information and of the importance of alignment between the aims of the shareholder, the board and the executive.

Unfortunately, when the board seat is offered to the chief executive it is not always accompanied by a change in title to managing director, and it is becoming more common to have chief executives who are also directors.

Many boards now find themselves in positions where they have managing directors who are not board members (or, indeed, directors) or where they have a CEO who is a board member. It is important to think through these issues when making new appointments and to align the role and title.

Many governance practices are based upon the premise that a CEO is a staff member whom the board can hire and fire and having that person as a board member whom only shareholders (or members) may hire or fire can can create tensions between the way that governance is implemented within the organisation and the way it is intended to be implemented under the relevant guideline.

Keeping expectations and practices aligned is a part of the board’s governance role.

What do you think?

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Julie Garland-McLellan has been internationally acclaimed as a leading expert on board governance. See her website at www.mclellan.com.au or visit her author page at http://www.amazon.com/Julie-Garland-McLellan/e/B003A3KPUO