Boardroom Evaluation If Not Why Not The performance

Boardroom Evaluation - If Not Why Not? The performance of the board and key executives should be reviewed regularly against both quantitative and qualitative outcomes. - ASX Corporate Governance Council

The Need of the Time 1970’s – the club, ‘Rubber stamp’ 1980’s – Collapses – ‘Compliance / Fiduciary duty’ 1990’s –Stock market crash/Dot. coms – ‘Transparency’ 2000’s – Spectacular – AWA, NSC, HIH, One Tel. OECD Governance Principles, Aust ASX issued GCGR 2009+ - GFC, Banking Crisis. Taxpayer bailout - Walker (UK) – ‘Change is needed in the boardroom’ Passive oversight -> active improvement -> setting direction -> scrutiny and risk management

Accountability – External Imperative • Increasing regulation • ASXCGC Corporate Governance Principles and Recommendations - ‘optimise performance and accountability in interest of shareholders and economy’. • Advocate companies - ‘fairly review and actively encourage improvements in board and management effectiveness’ • GCGP can’t prevent poor decision making and/or failure

Accountability – Internal Imperative Regular reviews - compliance (assessment) to capacity building – • leadership • role definition, responsibility and boundaries • accountability • decision making • alignment (culture) • governance and process • Accountability to external stakeholders and funders)

Directors under the lens • • Executives are accountable – why not directors? Directors’ responsibility is joint and shared. Alignment is critical. Performance Reviews address individual expertise and collegiate capability.

Review - Objectives Identify what’s working and what’s not working – • • • Individual accountability Collective accountability /alignment Vehicle for dissent, conscience, diversity Governance structures, systems External environment, stakeholders Leverage – skills audit, quality assurance etc

Review - Who? • • • Directors Board Chair CEO / CS / CFO Committees

Review - How / When? • • • Annual, biannual, trend analysis APRA- annual board and directors If not, why not? Online / hard copy Generic / Customised Qualitative / Quantitative Interviews – Open, binary, summated Internal / external Scope

Review - Outcomes Capability not only compliance Why are we sitting around this table? Clear actionable outcomes Individual directors, collegiate alignment, governance, stakeholders, risk • Generate outcomes • Report • •

Board Accord • • Client focused Multiple approaches Qualitative and quantitative Capacity building – PD and PD

Board Accord Metric

Review - Challenges • • • Resistance Chair Them/Us Structure – member based Board/Management – boundaries Self awareness Culture Consultant Difference

Board Accord “Aligning aspiration and outcome for profit, people and planet” Robert Gordon BEd M Coun GAICD Director of Programs 0405 541 510 robert@boardaccord. com. au www. boardaccord. com. au