Category: Savings

Often board and committee meetings end before the board addresses its most critical agenda topics. Or, those topics get short shrift so the board can adjourn on time. Human nature is to spend time on the topics for which the answers come more easily, less on the uncomfortable topics. But boards and committees really need to get to those tough agenda topics if they want to move their companies forward. If this is happening to you and your board, you are not alone. Happily, there is a solution.

Effective use of a board’s limited time requires an understanding of board priorities – then rigorously planning board and committee agenda based on those priorities. The board’s three Priorities are:

• Company’s Leadership. It is the Board’s most important function. Identifying, developing, and retaining high quality leadership is critical to an enterprise’s success.
• Company’s Strategy. It is about setting the Company’s direction, the aim and trajectory of its products and services, its capital allocation, and its contributions to society.
• Execution. A Board reviews and discusses results, evaluates proposed transactions, and pursues “red flags.”

All corporate boards, whether start-up or well-established, have these Priorities in common. Devoting the appropriate time and energy to these Priorities can drive the Board’s impact and the Company’s success.

But, building board and committee agenda the old-fashioned way will not move your board and company forward. Until now, that has been a time-consuming, manual process.

Going forward, you can improve board effectiveness and decision-making with Foresight. Foresight is an interactive, secure SaaS platform that streamlines and elevates the agenda planning process (as well as follow-ups). Foresight is an effective tool to elevate priorities and build effective agenda– for the entire year and for each board and committee meeting.

Foresight helps produce agendas that:

• Prioritize agenda topics which have the greatest strategic value.
• Allocate more time to those more important agenda topics, over the more ministerial but still essential agenda topics.
• Better reflect how much time agenda items and meetings are likely to require, allowing chairs to better plan and lead meetings and management and directors make travel plans.
• Are planned for the year but be easily adjusted as meeting planning progresses.
• Validate compliance with relevant governance and regulatory requirements.

Foresight also produces analytics that allow comparisons between planned and actual time allocations. Management, Lead Directors and Chairs can use those analytics when building future agenda and to lead more efficient and effective meetings.

Use Foresight to better plan your agenda and generate the analytics needed to help your board devote enough attention to the topics that really drive your company’s success.

It is no trouble to cancel an unneeded meeting. It is another story when your board or governance committee needs an unscheduled meeting.   

Of course, sometimes an unscheduled meeting is unavoidable – say, to discuss the opening salvo in a potential proxy fight. But the need for most meetings is foreseeable. Let’s look at two examples.

Example One

Last week’s U.S. Securities and Exchange Commission (SEC) reminded us of this first foreseeable example — when a company seeks SEC permission to omit a shareholder proposal from the company’s proxy statement.  (The SEC staff’s view often carries the day. So, the company nearly always asks the SEC staff to weigh in before the company decides whether to omit the proposal.)  In 2018, the SEC granted many requests like this, but in several cases made it clear that it wanted to know that the company’s board had considered the issue and the board’s rationale for its position.

On September 6, 2019, the United States Securities and Exchange Commission (SEC) reaffirmed this view. The SEC said, “The staff continues to believe … that when a company seeks to exclude a shareholder proposal from its proxy materials [under two of several established categories], an analysis by its board of directors is often useful.”

In practical terms, this means that the board (or, in some cases, the proper board committee) must meet to discuss a shareholder proposal, so the company can provide the SEC evidence of the board’s consideration and rationale.  Companies that skip the board consideration step have had far less success with the SEC staff.

Does your annual board calendar include a board or governance committee meeting between the deadline for submission of shareholder proposals for inclusion in your proxy statement and when you must submit a no-action request to the SEC staff?  Better to include shareholder proposals as a board or committee agenda topic in anticipation that you might need it; then, delete the topic if no shareholder proposal requires this kind of attention.  Better planning leads to less disruption.

Example Two

Proper planning avoids a year-end scramble to address the board’s compliance requirements.  One company almost lost a multi-million-dollar tax benefit because it had not complied with a government regulation requiring board and shareholder action. The company’s brand-name law firm also missed the omission. A hastily called board meeting saved the day and the money. Vetting annual agendas – laying out agenda meeting by meeting – in order to catalog compliance requirements at the beginning of the year, rather than until the compliance deadline looms and an unscheduled meeting is needed.

Foresight, from Corporate Governance Partners can help you simplify board planning, enhance board compliance, and elevate board performance.