1. Fundamentals of Board Governance Presented by: Todd Cain and Laura Edgar, IOG © Institute On Governance

2. Objectives Understand the elements of a governance system Understanding governance challenges 2

3. 3 system Elements of a Governance System 1. Foundational / core documents 2. Governance policies and systems 3. Informal governance foundation policies informal

4. 4 IOG’s Principles of Good Governance Legitimacy & voice Direction & purpose Effective performance Accountability & transparency Fairness & ethical behaviour

5. 5 Characteristics of High Performance Boards 1.They develop & maintain a longer term vision and clear sense of direction [Direction] –Mission & vision statements; longer term plan; clear priorities; updating process 2.They ensure the prevalence of high ethical standards [Fairness, Accountability, Performance, Legitimacy] -Transparency & openness; respect for their legal obligations; written code of conduct; role of stakeholders; treatment of staff

6. 6 Characteristics of High Performance Boards 3. They ensure effective performance through sound information [Performance] -Focus on results or outcomes (as opposed to activities); good sense of their information needs -They recruit, set objectives, and review the performance of the chief staff officer [Performance]

7. 7 Characteristics of High Performance Boards 4.They ensure the financial & organizational health [Performance, Direction] -Focus on long-term sustainability (expenditures & revenues; asset management) -Macro level concern with quality of management; staff morale 5.They ensure sound relationships with their key external bodies and other stakeholders [Legitimacy, Accountability, Performance]

8. 8 Characteristics of High Performance Boards 6.They ensure sound relationships with members, clients [Legitimacy, Performance] 7.They manage risk effectively [Performance] -Identifying, assessing, mitigating & monitoring critical developments with uncertain outcomes

9. 9 Characteristics of High Performance Boards 8.They are accountable [Accountability] Through publicly available information (financial, results achieved etc..); audits & evaluations; outreach activities; public engagement practices; redress mechanisms; etc.. They ensure the soundness of the governance system [Legitimacy, Accountability, Performance, Fairness] Having effective relationships with staff; monitor contemporary developments; monitor collective and individual board performance; manage by-laws and policies; recruit and train board members

10. Roles and Responsibilities

11. The role of the Board 1.Compliance, stewardship & oversight 2. Leadership 11

12. Fiduciary obligation Acting in the best interests of the IOG Fiduciary duties Duty of diligence Duty of loyalty Duty of obedience 12

13. Board Roles and Responsibilities Baseline Board Roles Fiduciary Oversight Possible Additional Board Roles Fundraising / development Profile raising / legitimizing Expertise Stakeholder voice Sounding board / counselor Hands-on resource (eg. Treasurer) Strategy Program direction / advisory 13

14. 14 Continuum of Governance Models Operational Collective Management Traditional Policy governance Policy governance Organization context drives the governance model

15. Strategy Governance as leadership -Empowers the board -Engages the collective mind -Exploits the board’s talents and passion -Enriches the board’s work -Enhances performance of the board and organization Strategy 15 © 2010, Institute On Governance

16. Governance Strategy Baseline Clear mandates, periodic focus on strategy, ongoing focus on compliance, risk and governance Issues Board management relationship, governance philosophy Emerging Beyond Carver - revisiting the role of the board Stakeholder relations 16

17. Strategy DependentIndependentInterdependent Time & Maturity Governance Strategy Board/Management Relationship 17

18. Chair Responsibilities Leads overall Board in fulfilling its responsibilities Voice of Board with the President Sets meetings and agenda, approves materials Chairs meetings, managing discussion and decision making Builds desired Board culture Advise and counsel directors 18

19. Committee Roles Committees typically exist to do more detailed work on behalf of the Board As a result, Boards control terms of reference/mandate, who gets appointed and work plan Most committees have no decision power – must recommend to the Board BUT Board should not re-do the work of committees While typically made up of Board members, outside members can be brought in 19

20. Managing roles, responsibilities and risks Provide orientation and development opportunities for board Develop and implement sound policies and procedures Be prepared, read and discuss reports and documents Attend meetings and participate fully, ask questions, listen critically, express views, share, think things through Know or learn about the board’s legal obligations and make sure they are upheld Ensure clear and sound relationships with stakeholders Keep the IOG’s mission/purpose in mind (big picture) 20

21. Board-Staff relations

22. 22 Oversight Direction Implementation Who does what? Board-staff relationship Governance functions Management tasks

23. 23 Where Boards Fall Short Board orientation on roles and responsibilities for board members and executive officers The urge to micro-manage staff Policy compliance Neglecting performance management

24. © 2009, Institute On Governance 24 Where CEO Fall Short Doing the Board’s job Providing the Board with inappropriate information Insufficient knowledge of governance Fear of taking risks

25. © 2009, Institute On Governance 25 Where Boards AND Staff Fall Short Defining and adhering to board/staff roles Communicating and listening Lack of trust Meeting preparation and facilitation Building strong and effective teams

26. 26 Keys to Board-Staff Collaboration Governance decisions are NOT made outside the Board room Board need to drive governance decisions Relationship perhaps best seen as a partnership Formal direction must go through the President

27. 27 Tools to Assist in Board – Staff Relations The use of policies and codes Structural and organizational approaches such as dispute resolution mechanisms Nurturing the relationship through orientation, training and retreats Well run Human Resources & Compensation Committee with a clear mandate

28. Emerging Governance Practices

29. An organization design model provides a useful frame for discussing the reinforcing elements of governance Modified from Jay Galbraith 29

30. Structure Baseline Smaller boards, fewer standing committees, more task forces, term limits Issues Separating ‘representation’ from board nominations Emerging Use of advisory committees, retained services 30 Structure

31. Processes Baseline Documented, repeatable governance processes, regular board self-evaluation, conflict of interest/recusal, CEO and organization performance management Issues Board performance “plateau,” individual assessment of volunteer directors, follow-through by staff Emerging Results-based governance assessments 31 Processes

32. Board Performance Management Most private sector and many public/NFP boards are doing formal performance management A wide variety of approaches exist: -Outside evaluation -Self-assessment of board as a whole -Self-assessment of individual directors -Peer-assessment of individual directors -Facilitated group discussion In any scenario, need to set governance goals and objectives to measure against, which requires governance planning 32 Processes

33. Expectations/Motivation Baseline Clear director role or job description, pre- screen/expectation setting, orientation Issues Integrating directors from different constituencies/appointment processes Emerging Direct focus on board culture 33 Expectations / Motivations

34. People Baseline Board profile/skills matrix, orientation training Issues Continued diversity, financial skills challenges 13.04% Emerging Director professional development programs, recruitment branding 34 People

35. IOG Governance 35

36. Legal Framework Federally incorporated Bylaws last updated in 2010 Charitable status Currently working toward continuance under the new Canada Not for Profit Corporations Act 36

37. Board Policies and TORs Draft Policies: –Roles and Responsibilities of the Board of Director –Board Profile Matrix –Director Job Description –Conflict of Interest / Code of Conduct Terms of Reference (approved in 2010): –Audit & Finance Committee –Governance Committee –Performance Review Committee 37

38. IOG Standing Committees Governance Committee Audit & Finance Committee Performance Review Committee 38

39. IOG Advisory Committees Indigenous Circle Toronto PGEx Not for Profit Learning Purpose: to provide subject matter expertise, advice and support to the IOG on: –Program / product design and content –Current and new markets –Outreach to emerging markets Membership on Advisory Committees driven primarily by subject matter and/or market expertise To date, a few board members have been involved on advisory committees 39

40. Thank you Questions? Comments? Good Governance is a journey… 40

41. Key Questions for the Board 1.Given the mission and strategic goals of the IOG, what does the Board see as its roles and responsibilities? 2.Based on the roles and responsibilities defined in question 1, what does the Board do well and what does it need to do better? 3.What board size, composition and competencies are required for the Board to fulfill its roles and responsibilities? 4.What standing and other board committees are required? 5.How often should the board meet? 6.How can the Board best communicate with and support the IOG President and her team? 41