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The Diagnostic

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					Inaugral Forum for Chairpersons of Publicly Funded Bodies


  The Role of Chairperson: New Challenges

                     David W. Duffy

                     26th April 2006
…Make yourself (more) comfortable…




                          2
     Context



•   Corporate Governance today


•   Changing expectations of Public Sector bodies


•   Private vs. Public Sector needs




Code of Practice for the Governance of State Bodies says that:
     • All should have written codes of business conduct for directors and
       employees
     • Chairpersons and Boards are required to implement Government
       pay policy from time to time



                                      3
    What are we meant to be?



                           Oversee the
                         Board’s strategy

      Oversee the
     activity of the
                                              Liaise with Minister
         Board

                        The role of
                         the Chair
Chair Board meetings                        Liaise with CEO/Mgt



                          Evaluate Board
                           performance




                                 4
    What are we meant to be?



“The chair’s role is the lead the governing body, ensuring it makes an effective
contribution to the governance of the organisation; and the chief executive’s is to
lead the organisation in implementing strategy and managing the delivery of
services.” Good Governance Standard for Public Services (UK, 2004)



A great chair…
     Works well with the chief executive
       Acheives openness and transparency on the Board
       Places importance on measuring (and improving) Board performance
       Has an open leadership style
       Has broadly based (rather than sector-specific) experience
       Prepares for the role
       Is personally accountable for Board performance
       Balances regulation and strategy


                                            5
   Challenges that we face…




• Managing relationships


• Balancing time between strategic and operational issues


• Board membership


• External interference




                                  6
4 Steps to making your ‘Chair more comfy’



       Clarify your relationship with both the Minister and
       your Chief Executive, and agree each others roles
                                        and responsibilites



         Develop the right mix of skills and
         knowledge in your Board members



              Continually evaluate Board performance and
                             make necessary adjustments



      Set the right agenda for your Board



                                 7
Where do we go from here?




            8
          David W. Duffy


David W Duffy is the founder and Managing Director of Prospectus, Ireland’s leading
independent firm of strategy consultants. He graduated from Trinity College Dublin with a
Bachelor of Business Studies Degree and is a Chartered Accountant. He holds an MBA
from IMD in Lausanne, Switzerland.


David has advised a large number of organisations on issues related to Corporate
Governance in the public / private / voluntary and not for profit sectors.


David is Vice President of the Institute of Management Consultants. He is a member of the
Institute of Directors and Chairman of a voluntary organisation looking after children with
particular difficulties.


He is the author of Corporate Governance – Leadership not Management, first published in
1998. He published “The Management of Management – a practical guide to Corporate
Governance”, with Justine McCarthy in 2004, which is now the recommended text book for
the Diploma in Corporate Governance at UCD.
For more details on Prospectus and the book see www.prospectus.ie



                                               9
Further reading




       10
     Some questions to consider as Chairperson


 Are the Board (collectively and individually) clear on their exact roles and responsibilities?

 Are we receiving the correct information? (not too much, too little, how relevant?)

 Does everyone else understand the Board’s role clearly (govt, Dept, management)?

 Does everyone have a common understanding of the goals/activities of the agency/org?

 Are the Board meetings effective?

 Have we formally agreed the types of decisions that we make and those that we delegate?

 Do we consider risk management as we should?

 Do we consciously work to develop the skills and knowledge of our Board members?

 Do we have any succession planning in place?

 Do we have a process for regularly reviewing the relevance and effectiveness of our
  corporate governance arrangements?


                                             11
        Evaluating Board Performance
              - Why to do it and what to evaluate
        • Assess the extent to which the Board has added value to the organisation

        • Differentiate the organisation by ‘showcasing’ their corporate governance standards

Why?    • Enable non-executive members to understand the organisation’s governance practices

        • Use as a benchmark for internal improvement

        • To demonstrate leadership


        The performance of the Board as a collective unit and the individual performance of
        each member of the Board including the Chairperson should be evaluated under the
        following headings:
What?       • Independence                                 • Attendance
            • Commitment                                   • Roles
            • Willingness to challenge                     • Operational effectiveness
            • Competencies                                 • Quality of information
            • Personal characteristics                     • Relationships
            • Ability to function as part of a team        • Succession planning



                                                      12
         Evaluating Board Performance
                  - Some tools/techniques to be considered

Method                        Issues
 Self assessment             Of limited benefit, but can raise awareness on issues that
                              effect performance

 Questionnaire               Developed by Chairperson, Company Secretary or Non
                              Executive Members
                              Confidentiality must be ensured

 360 degree feedback         Board members assess performance of Board and of
                              colleagues using a form of questionnaire

 Interviews of the Board     Could be conducted by Chairperson, Company Secretary
members                       or Non Executive Member.
                              Independence and objectivity could be enhanced by an
                              independent third party

 Boardroom discussion        Can be led by the Chairperson or an independent third
                              party

 Benchmarking                Assess performance against best practice and
                              comparable organisations


                                           13
          Evaluating Board Performance
                   - Five steps to getting started                The
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                                             14
          Evaluating Board Performance
                  - Ten questions to answer before you start

1.   What are the objectives of the Board?

2.   Does the organisation have the right committees in place?

3.   Do the committee Chairpersons have to adhere to higher evaluation standards than other
     Members?

4.   Is the Board getting the right information to assess performance?

5.   If the organisation were to appoint a new Board, how many members of this Board would it
     reappoint?

6.   Is there a succession plan?

7.   Does the Board spend enough time on the critical strategic issues?

8.   Is the Board adding real value to the organisation?

9.   What are the views of the main stakeholders on the performance of the Board?

10. Will the evaluation process lead to actions?



                                                   15

				
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