MODULE 1 CREATING AN EFFECTIVE BOARD CME SOLUTION

MODULE 1: CREATING AN EFFECTIVE BOARD CME SOLUTION (U) LTD admin@cmesolutionltd. com 0775 -690009/ 0700 -594141 www. cmesolutionltd. com CME Solution (U) Ltd. Tel: 0775 690 009 // 0700594141 /07724 01 01 774, www. cmesolutionltd. com Centre of of Management Excellence HELPING YOU MANAGE BETTER

TABLE OF CONTENTS 1. 2. 3. 4. 5. 6. 7. 2 Case study Crisis in board governance Nature and types of board Why bad boards Search for good directors Competencies of good directors The five responsibilities of good directors CME Solution (U) Ltd. Tel: 0775 690 009 / 0700594141 /07724 01 774, www. cmesolutionltd. com Centre of Management Excellence HELPING YOU MANAGE BETTER

CASE : THE MANAGER AND THE CORRIDOR BOARD CME Solution (U) Ltd. Tel: 0775 690 009 / 0700594141 /07724 01 774, www. cmesolutionltd. com Centre of Management Excellence HELPING YOU MANAGE BETTER

CRISIS OF BOARD GOVERNANCE l l 4 The Collapse of Enron Energy company which shook Energy sector and is attributed to poor Board Governance The Budo inferno which was partly blamed on the School Management Committee ( Observer, May 15 -21, 2008) CME Solution (U) Ltd. Tel: 0775 690 009 / 0700594141 /07724 01 774, www. cmesolutionltd. com Centre of Management Excellence HELPING YOU MANAGE BETTER

UNDERSTANDING BOARDS 1. Founder’s Board Founder's Board: a board hand picked by the Founder or a Chief – Executive with a very strong influence over the organization. The Board is controlled and managed by the Founder who decides what it discusses. Pros: If Founder is driven can perform Cons: Very dependent on Founder’s vision and abilities. Common in certain churches 5 CME Solution (U) Ltd. Tel: 0775 690 009 / 0700594141 /07724 01 774, www. cmesolutionltd. com Centre of Management Excellence HELPING YOU MANAGE BETTER

CONT… 2. Casual Board 6 l A board which has been formed to meet a statutory requirement but the members have hardly any recognizable interest in the affairs of the organization. l To get a meeting going the Chief Executive has to call members five times in the week and, because the last three meetings have failed to take off for lack of quorum. Pros: It meets legal requirements Con: Has no impact on performance. This is a Chief Executive- run organization CME Solution (U) Ltd. Tel: 0775 690 009 / 0700594141 /07724 01 774, www. cmesolutionltd. com Centre of Management Excellence HELPING YOU MANAGE BETTER

CONT… 3. Entitlement Board. l This is a board where members feel they have been elected to a high status job which comes with lots of perks. Such boards are common in government organizations. Pros; Self motivated for gain and influence/ network Con: Personal interests tend to override merit/ very political 7 CME Solution (U) Ltd. Tel: 0775 690 009 / 0700594141 /07724 01 774, www. cmesolutionltd. com Centre of Management Excellence HELPING YOU MANAGE BETTER

CONT… 4. Bureaucratic Board l This is a board of micro – managers, strong personalities that believe they have to get everything right. The Board is characterized by a disempowered Chief Executive’s decision. Pros: Very interested in affairs of org Con: Take over the ED’s job. Time consuming. Conflict among mermbers 8

CONT…. 5. Strategic Board A strategic board is one formed of members who believe that there role is to lead the organization through policy guideline, budgeting and strategic planning. This board takes great interest in the strategic planning; making sure that the organization has the right structure and resources to deliver on its objectives. It refrains from interfering since it believes its primary role is to support and not do the Chief Executive’s job. … Pros: Supports the CEO perform Con: Must know the limits of a hands off approach and being too trusting 9

ENTITLEMENT BOARDS Ø Ø Ø 10 Many Boards of Directors of many organizations have become mere show cases, a place to inject distinguished names, men and women: linked to the top brass- old boy’s network who are ignorant of the business they run, who are not interested in acquiring or applying knowledge or know-how and Who do not expect to get more than their allowances and the influence of the title” Have no time CME Solution (U) Ltd. Tel: 0775 690 009 / 0700594141 /07724 01 774, www. cmesolutionltd. com Centre of Management Excellence HELPING YOU MANAGE BETTER

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