Description
THE QUICK-ANSWER GUIDE TO YOUR CORPORATE GOVERNANCE QUESTIONS Serving on a corporate board isn’t what it used to be. In today’s complex business landscape, meaningful corporategovernance requires solid skills in problem-solving,relationship-building, crisis management, leadership development, management oversight, and much more. Written for both seasoned and first-time directors, Claiming Your Place at the Boardroom Table is a roadmap to becoming a highly knowledgeable and effective board member. Whether you’re dealing with intricate business regulations, powerful personalities, crucial audits, or the many other challenges that come with serving on a board, you’ll find all the information and insights you need in these pages. Written by experts in the field, Claiming Your Place at the Boardroom Table covers: The essential objectives of the corporate board An overview of effective corporate board service Securing an invitation to your first corporate board Positioning to join your next or ideal corporate board Understanding financial issues board members must cover All the critical information you need to know about public company reporting Proven ways to be a leading member of any board you serve on Packed with real-life case studies illustrating the best of the best practices, Claiming Your Place at the Boardroom Table helps you identify and navigate nuances that will make all the difference in becoming an outstanding board member. Fascinating discussions of legalcases, reporting requirements, regulatory matters, reputational risks, and lessons on all the overarching fiduciary duties of directors are included. Being a member of a corporate board can be a remarkably rewarding journey both professionally and personally–if you go in with the right attitude, skills, knowledge, and instincts. Claiming Your Place at the Boardroom Table takes you step by step down this exciting path to make it the most enriching experience it can be. PRAISE FOR CLAIMING YOUR PLACE AT THE BOARDROOM TABLE: “An excellent resource tool for all directors–a book that I know will be a “go-to” book for both new and seasoned board members.” — Margaret M. Foran, Chief Governance Officer, VP & Corporate Secretary, Prudential Financial, Inc.; Director, Occidental Petroleum, Inc.; former Chairman, Society of Corporate Secretaries and Governance Professionals “A terrific handbook for every executive and director looking to achieve excellence in governance, and a great read.” — Benjamin F. (Tad) Edwards IV, Chairman, CEO and President, Benjamin F. Edwards & Co., Director Cass Information Systems, Inc. “Practical and substantive; directors will find useful and productive. Bakewell is an expert who earned the right to share with influence and impact.” — Nido Qubein, President, High Point University; Chairman, Great Harvest Bread Company; Director, BB&T, La-Z-Boy Corporation, and Dots, LLC “Rarely does a book have insights to offer to such a wide range of people. For first-time directors, experienced directors, up and coming executives, academicians, and investors, it is a must-read.” — James S. Turley, former Chairman and CEO, Ernst & Young; Director, Citigroup, Emerson Electric Company, and Boy Scouts of America; and Trustee, Rice University “Tom Bakewell has been active in the governance community for many years. His wisdom and insights, presented here, are entertaining, informative, and clearly worth the read for both the new and veteran director. Don’t miss it!” — Professor Charles Elson, Director, Weinberg Center for Corporate Governance, University of Delaware; Director, HealthSouth THOMAS BAKEWELL advises CEOs and boards on strategy, governance, and transformation. He is an attorney, CPA, and active faculty member for the National Association of Corporate Directors (NACD), with years ofboard service and boardroom consulting. JAMES J. DARAZSDI, CPA, CMA, Ph.D., was the past chairman of the NACD and past CEO of Rocco, Inc. He served on more than 25 boards, including Perdue Farms, Inc., andInterstate Resources, Inc. Foreword ix Acknowledgments xii Introduction xiii Part 1: Your First BoardHow Do You Find That First Seat at the Boardroom Table? 3 What Is Governance? 7 Nothing More Challenging 8 Types of Board Opportunities 10 What Does It Take to Become a Director? 19 Joining My First or Next Board of Directors 22 Director Searches from a Skills-Driven Process 27 Part 2: Being an Effective DirectorWho Owns and Controls a Corporation? 39Don’t be Sleazy, Sloppy, or Nave 44 Independence and Independent-Minded 47 Conflicts of Interest and Related-Party Transactions 55 The Role of the Board of Directors as a Whole 61 Tools and Techniques for Protecting Directors from Liability 64 Nine Simple Low-Cost Tips for Liability Protection 72 Your First Big City Board Meeting and a Major Test 76 Part 3: The Royal Road to Exemplary Directorship The Impact of Sarbanes-Oxley Act (SOX) and Dodd-Frank Act on Board Committees 84 Board Tools and Structures to Improve Committee Performance 85 Specific Committees in Action 87 Other Board/Committee Efficiency Issues and Tools 114 Case Study: New Era Faces the Future 123 Part 4: The Importance of Finance to Exemplary DirectorshipAudits 137 The Committee of Sponsoring Organizations (COSO)and Enterprise Risk 146 Overview of Financial Statements 150 Form 10-K, MD&A, CD&A, Form 8-K, Annual Report and Key Financial Ratios 152 The Numbers Don’t Lie 161 Part 5: Public Company Reporting American Securities Regulation and the SEC 173 Sarbanes-Oxley Act (SOX) and Greed in America 177 Financial Accounting Standards Board (FASB) 180 Public Company Accounting Oversight Board(PCAOB) 182 Proxy Advisory Services 184 Case Study: General Motors Gets a New CEO 191 Part 6: Achieving Excellence in Governance Best Practices in GovernanceBenchmarking 211 CEO Commitment and Board Leadership 214 Governance Evaluations and Improvement 217 Board and CEO Succession Planning Today 223 Case Study: Directors Who Made a Difference at Ford Motor Company 228 Part 7: Activist Shareholders and Their Role in Governance Why Do Activist Shareholders Take on Public Companies? 237 Activist War Stories and Board Battles 242 If It Is Not Working at the Top 253 Case Study: Pre-paid Legal Services, Inc.,and the SEC 256 Conclusion: Claiming Your Place at the Boardroom Table 263 Notes 269 Index 282
