IOD Directors Course Good Value

Review of Companies Directors Course – IOD
Becoming an Informed Board Member – a $6500 Investment

For the week of Nov  7 – Nov 12, I subjected myself to  the IOD Companies directors course.  Everyone, including my sponsors, The EDANZ- Deloitte Partnership (Escalator), wants to know was it worthwhile?

The real test of this will only be proven by my performance: both as a CEO –GM and as a value add board member.

It’s a big commitment by any one in a senior role to attend a week-long residential course and clear enough mind space to maximize your attendance.

So my highlights of the week:

  • The fellow attendee’s – I was privileged to attend with a great bunch of peers from a variety of backgrounds and experiences. Everything from VC’s, Fontera sponsored farmers, SFO, SOE CEO’s to tourism operators.
  • When you need to nominate board members, its ideal to have worked with them  before . This week created a great opportunity to experience people in action. A large percentage of the co-attendee’s I will recommend into future fellow board seats.
  • The debate a rigor my fellow attendee’s gave the presenters – challenging the bounds of traditional governance and relevance for new world post GFC and potential directors in “the gallows”
  • Case study work – “yes I am usually not a fan of this learning style”, but working on our fictitious “pacific pies ltd” and other companies, with no perfect answers, created great debate and enabled the various knowledge from fellow attendees to be shared.
  • Most of all it reinvigorated my belief in what high performing problem solving team can achieve with complementary skills.

So what about the content and delivery?

  • It would be easy to be overly critical – some of it could do with a major refresh and more creative flair – but it achieved the desired end result. (ok -the power point sucked – happy to help IOD here if they want)
  • The caliber and relevant experience of the majority of presenters was bang on – we all loved being given a “rally up” by an experienced chair and the frank and honest answers to probing questions by the pragmatists.

Would I recommend it?

  • Hell yes, I have come away more confident on my fudiciary responsibilities, a greater respect for risk and confident in adding more value to my clients as a result of it and more capable of maximizing the value from boards I report to.

Tips for potential attendees:

  • Verify with IOD what sort of background other attendees have. It sounds like not all courses have senior experienced commercial practitioners attending.  Auckland has a reputation for gathering a better crowd than some other locations.
  • Get involved and ask presenters challenging questions – it was the question and answer time that generated the most learning.

 

There is no doubt that IOD hold the body of knowledge as far their heritage and credibility. My hope for 2011 is that they can find ways to work with the growing Springboard Network to lead a charge in establishing benchmarks for effective boards for emerging SME’s as well as serving the big end of town.

Thanks to the EDANZ-Deloitte team for sponsoring my attendance. I plan on merging the learning from this informative week with my previous knowledge and experience to continue my personal quest to  help the emerging business talent of NZ succeed.

Other blog posts by Mark on Governance – Advisory Groups etc for SME’s

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Staying out of Jail

Your fiduciary responsibilities as a director

For SME’s the focus of your Board should not be compliance and risk management – however, you cannot avoid your legal responsibilities in this area.

Many people ask me what are your basic legal responsibilities in this area and what are the major gotcha’s.  So here is my interpretation of your basic responsibilities – with a MEGA big disclaimer – I am no lawyer. If you what the definitive advice on this contact the experts such as the institute of directors (IOD)   www.iod.org.nz http://firstboards.iod.org.nz/home

Basic legal responsibilities as a director:

  • The company does not “trade recklessly” i.e operates a “a going concern” (is solvent) – i.e  You as a board do not agree, cause or allow to carry on business in a manner likely to create a substantial risk of serious loss to the companies creditors.
  • You act in good faith and belief that you are acting in the “best” interests of the company
  • You operate with the skill, care and diligence of a reasonable director in the circumstances – ignorance is no excuse!

Some gotchas:

  • Abstaining or voting against a decision does not absolve your responsibility as a board member. The board is jointly responsible for all decisions
  • Absence equally does not excuse your responsibility.
  • Risk and audit committees can not decide – they can only recommend t o the board
  • Make sure you have adequate information to make decisions and if in doubt seek external advice.
  • Trading outside the banking covenant’s
  • If you act like a director you may be “deemed “ by the courts to be a director

 

What is the difference between an Advisory Group and a Board?

 

–       Advisory group: is a group of people who provide advice and have no decision making power.

–       Board: is a decision making committee appointed by the shareholders and holds ultimate responsibility for the legal requirements of a company:

  • Board of Directors Section 128(1) of the Companies Act 1993 states that “The business and affairs of a company must be managed by, or under the direction of or supervision of, the board of the company”.  A board is composed of directors elected by shareholders.

Professional directors will not accept directorships without performing due diligence on the company first.

Due to fiduciary responsibilities many advisors will offer to become Advisory board members on a trial basis before you establish your first board.

For business owners establishing an advisory group gives you the chance to learn what it is like to work with a team of professional advisers before handing over the reigns and control to an external board

My closing comment:

For Business Owners: “Make sure your board members are aware of their responsibilities – get them to attend the week-long IOD Companies director course. But most importantly make sure their legal responsibilities are not a permanent stuck hand brake on your business.”

For Directors: “As a director develop you own personal risk mitigation plan (more on this later) then get on with adding value to the company”

Other blog posts by Mark on Governance – Advisory Groups etc for SME’s

The power of great boards for SME’s

Boards: Leadership – Value Add or a Necessary Overhead?

There is still mystique and miss-understanding what relevance boards have for SME’s.

Do you have a high performing board, inspiring your business?

SME business owners continue to shy away from establishing or maximizing the value of their board or advisory group. These business owners are missing out on the most cost-effective business tools.

For many, it could well be a throw back from what appears to be era of dysfunctional corporate boards i.e. the lack of good role models.  For others, perhaps they simply do not know what they are missing out on.

There is hope on the horizon. I recently attended a week-long IOD (institute of directors) company directors course, with 24 others who were willing to challenge the norm, while acknowledging the great heritage and knowledge from the past masters.  Watch out for these 40-50 something’s who are keen to set new benchmarks in governance.

I believe in the next few years a new wave of governance will emerge, as the  “old chaps” brigade run from threat of potential liability and litigation from their dysfunctional past and a new bread of “value add” board professionals will emerge.

This is a first blog post of a series on the topic governance for SME’s, in which I intend on exposing why and how leverage effective governance for SME’s.  Using a board the purpose of growing your business rather than just mitigating risk.

So what can you expect from a great advisory group or board?

Great board’s bring:

  1. Value to the company – improving the performance, beyond what would be achieved without them
  2. Awareness of the fiduciary responsibilities and risk management, but doesn’t act as a hand brake on the business
  3. Fresh thinking – challenging the norm – creating a new future, not just repeating the way they did in the past
  4. Personal support and motivation to the CEO – owner as well as other key executives of your company, keeping them on track to achieve their goals
  5. A radar for problems, with a willingness and capacity to act, rolling up their sleeves as an immediate response unit in times of crisis.

Simply put you board need to be the best performing – value for money team in your business.

No advisory group or board yet?

If you have a business plan, then you are ready for your first step into governance.  Establish an advisory group now!

 

If you have a board:

– Do they pass the 5 check point test above?
– Do you look forward to board meetings?
– Do you cringe at the thought of preparing pointless board papers?

Then it may be time to review -change your board.

Effective boards are not hard work, they add value and accelerate success.

The label of “governance” for many has the stigma of grey haired old men at the gentleman’s club, do you have a better handle for this activity – to help me in my crusade to bring better high level support to our emerging SME champions.

 

Let me know what issues you have with governance for SME’s and I will post an answer.

Other blog posts by Mark on Governance – Advisory Groups etc for SME’s

Magnetic Cultures – the Netflix Example

Some businesses are magnetic in their cultures.

At a recent facilitated strategy day, when I gave  an example of a company’s value set, the development manager immediately said – “I want to work for a company like that”. We subsequently went on and revised their culture -value set and used phrases like “We dare to be awesome”

So is your company’s culture magnetic attracting the right people and more importantly are you managing to your stated culture.

Below is a link to a great insight into the Netflix culture …  have a read.

http://www.slideshare.net/reed2001/culture-1798664

If people are really your most important asset then learn from the Netflix example and challenge yourself – what is stopping you implementing and living a culture like this in your business?