entrepreneur

Does Your Board Need an Entrepreneur?

Board members tend to have lots of experience in at least one of these three areas: financial expertise, industry-specific knowledge, or operational management. Over the past couple of decades, though, companies have become more interested in diversifying their boardroom—both in race and gender as well as in expertise.

Today, you’ll find individuals with backgrounds in marketing, IT, and human resources in addition to the “classic” board member tracks.

The latest trend, however, is adding someone with an entrepreneurial background to your team of directors, and we’re big fans of this movement.

Here’s what an entrepreneur can bring to the table:

A focus on long-term, strategic thinking

Boards are constantly being pulled between short term goal-oriented oversight and long term, strategically focused planning. Entrepreneurs are generally going to default to strategic thinking and will help pull your board out of conversations that should be left to your company’s C-suite.
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shareholder activism

Shareholder Activism: What Board Members Need to Know

Shareholder activism plays a pivotal role in the evolution of corporate America’s public companies. In fact, the listed companies that shareholders targeted in
2013
“had an average market capitalization of $10 billion.”

That’s some serious power when it comes to influencing major corporations in the United States.

But what does shareholder activism really mean? To put it simply, shareholder activism occurs when an individual (or an entity) uses their equity stake in a corporation to put pressure on the company to make specific changes.
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company culture

Company Culture Starts With Corporate Governance

You’ve seen the headlines—“company culture” is one of the most-covered topics in business leadership over the past couple of years. You can read about why you shouldn’t just let your company culture happen.

You can explore “Why Corporate Culture Is Becoming More Important.” And, you can see how productive culture will boost your organization’s performance.

Before we launch into how company culture begins with the board, let’s define the term we’re using.

The Definition of Company Culture

According to Wikipedia, company culture (also referred to as organizational culture) “encompasses values and behaviors that contribute to the unique social and psychological environment of an organization…and includes the organization’s vision, values, norms, systems, symbols, language, assumptions, environment, location, beliefs, and habits.”

Yes, that’s a long definition! To simplify, culture is created through a blend of the practices, policies, and people that make up an organization.
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corporate governance books

Top Five Corporate Governance Books

Are you looking to take a deeper dive into the world of corporate governance? We’ve put together a collection of books and reading suggestions for board directors.

Reading Suggestions for Board Directors

Dear Chairman

This fascinating read by hedge fund manager and adjunct professor at Columbia Business School, Jeff Gramm, digs deep into the ever-evolving relationship between corporate directors and shareholder activists.

“Gramm analyzes different eras and pivotal boardroom battles from the last century to understand the factors that have caused shareholders and management to collide. Throughout, he uses the letters to show how investors interact with directors and managers, how they think about their target companies, and how they plan to profit.”

Who should read? Public company and corporate directors as well as board members with an interest in the history of shareholder activism.
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external auditor

What Is an External Auditor? (And Do Boards Need One?)

When it comes to reviewing a company’s financial status, every organization needs a good external auditor. Auditors look through in-depth accounting information in order to ensure that the reporting is a true representation of an organization’s financial position.

Auditors also assess things such as risk in order to help guide organizations to a healthier and more prosperous financial future.

Internal audits happen frequently within an organization. Companies utilize their own hired talent to review the work of others or the overall validity of the company’s financial reporting. As the Association of Certified Fraud Examiners explains it, “The internal audit function helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes.

The scope of internal auditing is broad and may involve the efficiency of operations, IT controls, the reliability of financial reporting, deterring and detecting fraud, and compliance with laws and regulations.”
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corporate governance

What Does Good Corporate Governance Look Like?

It’s easy to talk about strengthening your board of directors, but how do you know when you’ve reached a high-functioning level of corporate governance?

In this day and age, building and maintaining a successful board means checking off many different boxes. As the role of the corporate director continues to expand and technology keeps leaping forward, board members should take the time to reflect on their impact as individuals and as a group.

Here are some signs that your board is thriving:

Directors have a firm understanding of their responsibilities

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board member training

What Do Boards Do for Board Member Training?

Serving on a board of directors means a lot of learning on the go, but that doesn’t mean there aren’t resources for boards that want to improve.

Whether they’re sought out individually or as a team, board member training options can provide directors with even more specialization and confidence in their leadership abilities.

If you’re a first time board member, look for guidance

Being a first time board member can be an intimidating experience. You’re learning the ins and outs of corporate governance as well as the basics of parliamentary procedure all while guiding an organization.

Walking into a director’s role without any formal training isn’t impossible, but it’s not an easy task either. Whether you’re joining a local nonprofit board or the board for a large corporation, there are tools that can help you become better prepared.

For nonprofit members, you can easily find free online training courses like the ones at nonprofitready.org. For-profit board members can attend in-person training events with outstanding organizations like the National Association for Corporate Directors, which offers a 3-day course specifically for new directors.
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private boards vs public boards

Private Boards vs Public Boards: What’s the Difference?

Both private company board service and public company board service come with a great deal of responsibility. In each instance, directors will be expected to review data and reports, attend meetings, serve on committees, and much more. In most cases, the experiences of serving on these two types of boards will be similar. There are, however, a few key differences that distinguish them.

Private companies come in many different sizes. You could have a board for a private company that earns $2 million a year or one that earns $120.4 billion a year—like food and agricultural conglomerate, Cargill. Oftentimes, private companies begin as family-owned businesses, which can heavily influence the make up of the board and how it operates.

For instance, in a family-created business, the CEO could also be a major shareholder. In a situation like that, the board would operate more in an advisory role since firing the CEO would be nearly out of the question.
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New Year’s Resolutions for the Boardroom

You might have already made a personal resolution for the new year, but have you thought about making resolutions for the boardroom this year? There’s no time like the start of a new calendar year for goal setting—in fact, it’s a practice that’s existed for more than 4,000 years!

New year 2017 change to 2018 concept, Hand flip wood cube

Not sure how your board can push for even better decision-making in the coming months? Don’t worry, we’ve got some suggestions:

  1. Consider forming an ethics committee.

The last year brought news of a considerable amount of corporate scandal and misbehavior. From Volkswagen to Wells Fargo, board members have been held under a microscope when things go wrong.

In response, several writers at Harvard Business Review insist that it’s time for boards to get serious about ethics and form a committee “with responsibility for the firm’s culture of integrity and for creating a robust program of controls and processes to promote ethical conduct and compliance.” The group would work closely with c-suite leaders to ensure that ethical strategies are employed at all levels of the company.
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