Board Practices

Even with a Board of Directors comprised of talented and experienced professionals, there is no guarantee that your Company's governance practices will be successful. At Dunkirk Governance Specialists, our consultants can help establish an effective framework for action. We believe the boardroom is a special place that requires special behavior, and we endorse a formal, structured approach to corporate governance. Director's roles should be unambiguous, and their responsibilities clear.

As a first step in establishing effective board practices, we identify fundamental roles for directors, including:

Identifying & Prioritizing Critical Enterprise Level Issues Facing the Board This is an important process that creates a framework for working with management in the development of both short term and long range strategic planning. Building a Results-Oriented Process for Moving From Board Deliberations to Action Items A key process in turning discussion into results is to identify and document individual steps, or action items, that can be delegated to both directors and management. Our consultants can provide guidance and insight to your Company's directors to identify, document, and execute individual action items that, when acted upon, collectively result in significant progress. Professional Conduct in the Boardroom Professional conduct means many things, including being prepared for meetings, engaging in honest and open deliberations, frank but cordial dispute resolution, and even appropriate business attire. We encourage our clients to conduct governance affairs in a formal, professional manner, thereby showing respect for their duties, colleagues, and shareholders. This attitude underlies all or our consulting services and practices. Resolving Conflicts & Disputes Between Directors There are times when it appears that no amount of negotiation will resolve differences between and among directors. Our consultants are well versed in conflict resolution, particularly in the area of family dynamics and power struggles. Building & Implementing Board Self-Evaluation Processes A key to ongoing success in the boardroom is to perform periodic board evaluation processes where directors evaluate each other, and themselves, as a means enhancing effectiveness and staying focused on important issues.

Board Meeting Preparations
As part of our bias towards formal governance practices, we endorse the approach of thoroughly documenting substantially all aspects of corporate governance. This helps the Board of Directors stay informed and enables directors to focus of key issues. By doing this in an organized, systematic fashion, administrative work is kept to a minimum. Our consultants will guide your Company's directors in the following key areas:

Building Effective Agendas A successful board meeting begins with a constructive, action oriented agenda that focuses on key strategic issues and building the tools to address them effectively. Managing Board & Committee Meeting Schedules This is a relatively simple, yet fundamentally important issue that allows directors and committee members to plan and prepare for meetings. We prefer that meetings are planned several months - even a full year - in advance. Creating Effective Board Reporting Packages Management must do their part in keeping the Board of Directors well informed of financial and operating results, as well as critical strategic issues and industry and economic conditions affecting your Company. Our consultants will work with the Board, particularly the Chairman, and senior management, to construct a concise yet detailed information package that will keep directors fully informed. We will also show you how to bring key strategic issues to Board Members' attention so that effective and constructive deliberations can be applied to these important topics. Board Documentation Distribution Methods & Security A simple but important issue is the distribution of information to the Board of Directors. We can provide useful suggestions as to how this can be done, such as through secure internet "board portals". Designing Insightful Management Presentations to the Board A good presentation to the Board of Directors should be far more than a rehearsed "dog and pony show". We believe that presentations should do more than just convey information, but also provide insight and context regarding key issues. The goal is not only to inform and educate, but to raise questions, solicit feedback, and encourage constructive dialog and deliberations. Our consultants are adept at turning management presentations into powerful governance tools.

Board Legal Issues
As part of their duties, directors are frequently required to address a wide variety of legal issues impacting your Company. In addition, there are many legal issues that must be addressed specifically within the boardroom, and that are unique to the governance process. We offer important advice on topics such as the following:

Managing the Governance "Paper Trail" Now more than ever, directors are "at risk" with respect to their roles on the Board of Directors. Thus, it is very important that their actions and decisions be carefully and properly documented. This can serve the best interests of both the directors and your company by demonstrating that the Board of Directors adheres to thorough and professional corporate governance practices. A strong paper trail can also be a useful tool for subsequent performance evaluations. The Role of Counsel in the Boardroom Depending on circumstances, we generally have a bias towards having counsel attend board meetings as an advisor to the board. The need for counsel will vary considerably over time, but we encourage our clients to weigh the pros and cons of having counsel attend meetings on a regular basis. Defining & Ensuring Confidentiality Board of Directors address numerous sensitive and confidential issues. Thus, it is crucial that a set of standards be adopted that determines what information should be designated as confidential, and how confidentiality can and should be maintained.

Company Performance Oversight: Metrics & Compensation
Since Company management is accountable to the Board of Directors, it is essential that a system exists that enables the Board to objectively and consistently measure management's performance. This includes the important duties of reviewing and approving compensation guidelines, as well as bonus criteria. Our consultants can assist with the following:

Building Appropriate Metrics For Leadership We work with the Board and senior management to determine the Key Performance Indicators that will serve as the first level of performance measurement. We then construct specific goals that can be measured, which then serves as an important basis for bonuses and other forms of compensation. Building Aligned Performance Metrics for Management Performance metrics must be agreed to by all parties involved, particularly management. Metrics must be clearly identified and easily measured. Our consultants work as a team with directors and management to establish strong metrics that foster teamwork and encourage progress. Building Behavior-Shaping Executive Compensation Systems We are strong advocates of compensation packages that reward senior managers for achieving their objectives. Once performance indicators and performance metrics have been identified, we then encourage the Board of Directors to design pay packages for executives that will provide significant bonuses for reaching important goals. This includes both short term and long term bonus plans that collectively provide a strong incentive for management to achieve their objectives.

Evaluating the CEO and Senior Management
A corollary to performance metrics and executive compensation plans is the need to conduct performance evaluations of senior management, particularly the CEO. We can help devise an evaluation process that will provide constructive insight for senior management. We believe that a performance evaluation should be far more than a critique of past performance. Rather, our approach is to work with the Board of Directors to develop a constructive review and performance assessment process that provides coaching and guidance and also lays a foundation for future action.