Presentation on theme: "WORKING WELL WITH THE BOARD TO GET GOVERNANCE RIGHT Association of Governing Boards."— Presentation transcript:
WORKING WELL WITH THE BOARD TO GET GOVERNANCE RIGHT Association of Governing Boards
Working Titles Governance Works; Until It Doesnt or How to Have a Mediocre Board (and an Effective Audit Committee)
What Does Your Board Do? Partner in Leader- ship and Strategy Hold Account- able; Verify Confuse Gov. with Admin. Interrupt (and Disrupt) Eat and Tour
The Goals of Governance Effective governance entails influential participation in meaningful discussions about consequential matters that lead to significant outcomes. Richard Chait Chait, R.(2009, July/August). The Gremlins of Governance. Trusteeship. Association of Governing Boards. Washington DC.
What Kind of Board Do You Need? All Light; No Heat or Live Wires Strategic Leader/ Partner No Harm; No Foul; No Value Board is Bored Engagement Capacity High Low High Low
Observations from the Field Anxiety Uncapped Recognize High(er) Stakes Excited/ Excitable Boards* *And nervous presidents = stressed cabinets
How Restless? How apprehensive is your board? 1 (low)2345 (high) What are the three things that keep them up at night? 1. 2. 3.
How to Have a Mediocre Board Strive for under-engagement/Over-engagement Never have new members Develop unquestioned routines Have the chair try to be president Avoid focusing on the work of the board (only on the work of the institution) Re-structure committees frequently (board culture) Confuse good philanthropy with good governance
How to Have a Mediocre Board Confuse interest for expertise CEOs vs. Lawyers vs. Deacons/Ministers Expect 30 second answers to 10 minute problems Do not learn to agree (or disagree) Use the loud-voice veto Avoid risk Have competing agendas Womens Golf
Competing Agendas For the meeting, I need a copy of the agenda, the hidden agenda, and my own twisted personal agenda.
High Performing Boards Focuses on strategic issues Thought partners looking forward Willingness to make tough decisions Monitors of progress and risk Welcomes multiple perspectives; speak as one Climate of openness and positive social dynamic Maintenance of confidentiality Respect for institutional governance model Advances Mission Embodies trust and candor; meaningful deliberations
How Mediocre/High Performing? What makes your board effective? What is one thing* you wish your board did differently/better? What is one thing that others could learn from your board? * Or two things, or three things, or eight things………
Questions for Discussion What do your trustees think about efforts to control expenses and make your institution affordable? What type of information do you provide that informs their views? What questions might they ask better to govern better?
Accountability, Transparency, and Risk: The Audit Committee First line of defense for: Financial Reporting Internal Control Compliance Risk Management Protector of your most valuable asset: Reputation 22
Growth in Audit Committees Boards of Independent Institutions with an Audit Committee 23
Growth in Audit Committees Boards of Public Institutions with an Audit Committee 24
Core Audit Committee Responsibilities 1. Internal Control 2. Oversight of Internal Auditing 3. Oversight of the External Audit 4. Financial Statement Review 5. Risk Management 6. Compliance 25
Risk Management Committee should understand institutions overall risk profile Enterprise Risk Management (ERM) – move from an ad hoc to a holistic view of risk 26
Risk Management Five Key Areas of Risk Strategic – Organizational strategic goals Operational – Day-to-day activities in pursuit of these goals Financial – Organizations physical assets and financial resources Compliance – Internal and external reporting requirements Reputational – Institutions public image 27
Risk Management Best Practice for Implementing ERM 1. Define risk broadly 2. Recognize both the opportunities and downsides of risk 3. Develop a culture of evaluating and identifying risk at multiple levels 4. Look at the total cost of risk 5. Foster collaboration by Boards and presidents 28
Compliance Recent addition to the audit committee role Compliance: Recognition of and reporting under various federal, state and local laws and regulations Clusters of Regulation Privacy Copyright Discrimination Campus Security Financial Transactions Need to determine who owns compliance 29
Current Tension Points Where does the CFOs loyalty lie? Does the audit committee need to oversee other board committees? Delegation of authority for audit approval
The Curriculum is the Facultys Responsibility… Ensure that the institution has an appropriate set of learning outcomes statements Ensure that efforts to determine the effectiveness of teaching and learning are in place and ongoing Ensure that institutions use the data they collect for improvement The Boards Role is to Remind Them of This Responsibility Peter Ewell. Making the Grade. AGB
Key Board Questions: Our Product How good is our product? How good are we at producing our product? Are our customers satisfied? Do we have the right mix of products? Do we make the grade? Source: Making the Grade: How Boards Can Ensure Academic Quality, Peter Ewell (AGB, 2006)
Thank You! 43 Please visit agb.org for more governance resources, including the Effective Committee Series. To receive a copy of todays presentation or to inquire about consulting or other AGB services, please email BECS@agb.orgBECS@agb.org For information from our presenters, please contact Peter Eckel (firstname.lastname@example.org) email@example.com Rick Staisloff (firstname.lastname@example.org )email@example.com