Building the Bridge Between Boards & CEOs

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Board members and CEOs may serve different purposes in an organization, but with the right working relationship, they can help take a company to new heights. Creating a strong bond between these two entities takes time, focus, and mutual respect, but once it’s been created, the connection can be the difference between a company that just gets by and one that excels.

When it comes to getting the most out of the board to CEO relationship, here are our suggestions:

  1. CEOs should interact with board members individually and as a group. 

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Directorpoint CTO Recognized As Outstanding Tech Innovator

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We’re proud to announce that our very own Chief Technology Officer, Trey McMeans, was recently named a “Rising Star of Tech and Innovation” by the Birmingham Business Journal. The BBJ points out that the awardees are individuals who are expected to “lead the charge…in taking Birmingham’s innovation economy to the next level.”

Prior to joining Directorpoint, McMeans was the CEO and founder of a SaaS company called GreekStudy. The GPS-enabled, academic hours-tracking application acquired over 1,000 clients across the country and experienced exceptional success under his leadership and guidance. In 2016, McMeans sold the company in order to focus on full-time CTO leadership at Directorpoint.
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Managing a Board With Vacant Seats

Board seat vacancies

Inevitably, the time will come when your board has one or more empty seats to fill. For boards that are already small in number, having vacancies can cause some strain, but don’t panic; unless your bylaws mandate a quorum that you cannot meet, your board should be able to continue operating normally until the seats are filled. However, there are some stressors you may encounter along the way. Here are some helpful tips for confronting them.

1. An even number of directors creates a tie vote.

Perhaps, your board typically has 10 members plus a board chairperson for tie-breaking votes. What happens if you’re down one member, and the vote splits? Obviously, if your bylaws dictate a procedure for a tie vote, be sure to follow it. If you have no process already in place, your best option is to revisit discussion on the issue at hand and vote again. If the vote comes out the same, consider enlisting the opinion of an outside expert. This individual would not cast a vote, but they could bring more information to the table, which could help shift the overall vote counts.
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Peer Reviews in the Boardroom

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Many organizations view board member peer reviews as one of the most relevant ways to gauge effectiveness and to work to change any negative behaviors occurring in the boardroom. Peer reviews can, however, be very tricky evaluations to administer since they carry a strong element of critique. While yearly board evaluations are required for all NYSE-listed companies, peer reviews are not mandatory. Before choosing to implement peer reviews, board members should discuss the potential value that they would bring to their processes and decide collectively whether or not to implement their use.

If your board does feel that peer reviews will provide significant boardroom insight, here are our suggestions for how to go about administering and utilizing them.
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5 Questions Boards Should Ask After an Audit

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External audits usually provide companies with a fresh perspective on their financial health and reporting practices. It’s important that your board, or more specifically, that your Audit Committee asks the right questions in order to make the most out of the findings you receive. Here are some of our suggestions for queries we think you should address with your auditor or auditing firm:

1. Did you have any difficulty interacting with employees or accessing information while collecting data?

It’s important that companies establish a culture of forthcoming reporting. If a member of your internal team was not cooperative with the auditor, or if records were extremely hard to locate, you may have some internal issues to address. Additionally, if auditors are unable to obtain thorough records, it could lead to an incomplete report.
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Avoiding Boardroom Burnout

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The expectations for board members have been on a sharp rise for the past two decades. Companies are relying more and more on their directors both inside and outside of the boardroom, and with that dependence comes an often inevitable outcome—board burnout. Although directors at for-profit companies may feel this strain, it’s especially common among their nonprofit counterparts. Since nonprofit board roles are usually volunteer-based, it’s not uncommon for members to take early or unexpected exits from their positions. Here are some tips for avoiding “burnout” situations.

  1. Don’t take on more than you can handle.

It may sound simple, but if you can’t tackle the extra hours needed to head up a committee or act as the board secretary, politely decline those leadership positions. It’s better to stay in a less demanding role (if you still feel connected to the cause) than it is to leave and force the organization to fill a void.
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Board Communication: Is Your In-House Solution Effective?

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Rather than investigating a forward-thinking board software product, many organizations attempt to create a “free” in-house workaround in hopes of saving on their bottom line. While this option doesn’t have a price tag directly attached to it, it does cost the organization in other ways—namely in efficiency, man-hours, and security. Oftentimes, companies direct their IT departments to set up an FTP, or File Transfer Protocol, network to act as a file sharing server for board members. These FTPs may accomplish the basic goal of delivering information, but they don’t do much in the way of bettering boardroom communication or decision-making. 

Is it efficient?

Sharing information through an FTP may seem quick and easy, but is it really efficient for boardroom processes? For instance, board books usually get updated multiple times before in-person meetings. With an FTP site, you’ll have to repeatedly load new versions of the document and then alert board members to them. With a board software solution, you can simply amend the existing board book instantaneously. Not to mention, board members can view the latest version of the board book with or without Internet access—something an FTP site is intrinsically unable to support. Continue reading

Warren Buffett’s ‘10 Commandments’ for Board Leaders

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Warren Buffett is perhaps the most recognized name in the history of American corporate governance. As the leader of Berkshire Hathaway, a multinational conglomerate holding company, Buffett has become one of the most accomplished businesspersons of all time. Because of his immense success, Buffett’s advice carries with it great weight and authority. Many of his essays and letters have been collected for publication, and he’s known among journalists for his quotable quips and reasonable advice for investors.

Recently, a George Washington University professor named Lawrence Cunningham compiled a list of Buffett’s most important guidelines for corporate directors, which was published in the latest edition of NACD’s Directorship magazine. You can read a condensed and edited version of that article here. These “ten commandments” for business leaders, as Cunningham calls them, are what Buffett cites for his vast amount of boardroom triumphs.
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Understanding the Types of Shareholder Lawsuits

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Boards exist to protect shareholders based on the fiduciary duties of care, loyalty, and good faith. If shareholders feel that those duties have not been met by a board or board member, they can take legal action against them. The “business judgment rule” protects boards and board members from lawsuits for simply making bad choices. As LegalMatch shares, “The business judgment rule requires that courts defer to the board of directors in business matters. The only exception to the business judgment rule is if shareholders can show that the board of directors engaged in fraud, illegal activities, or were grossly negligent while managing the corporation.” In other words, boards are afforded the right to make bad business choices as long as there is evidence they were acting in good faith. If shareholders do believe that the board or a board member has engaged in one of those wrongful practices, they have two options for types of lawsuits: a direct lawsuit (also called shareholder class action lawsuit) or a derivative lawsuit.
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Directorpoint Wins Awards From FinancesOnline

screen-shot-2017-06-28-at-4-23-58-pmFinancesOnline, a popular review platform for software and B2B services, recently published a detailed review of Directorpoint‘s board software product. They highlighted Directorpoint’s ease-of-use, useful features for board productivity, and dedication to security as well as how Directorpoint simplifies the entire board experience.

In addition to this review, Directorpoint is proud to have received two awards of distinction from FinancesOnline: the Great User Experience Award and the Rising Star Award. Furthermore, FinancesOnline reviewed Directorpoint’s mentions across various social media channels in order to measure user satisfaction and were only able to locate positive comments and reviews.

At Directorpoint, we work hard every day to ensure that our users have an outstanding experience using our board software. Our intuitive platform helps launch the boardroom experience into the modern age–while streamlining meeting preparation and overall communication. Many thanks to FinancesOnline for recognizing our efforts!