California Quota Law: Empowerment or Impediment?

A new California law aimed at breaking the glass ceiling has become the buzz of boardrooms across the country. On Sunday, Governor Jerry Brown signed a bill, passed by state legislators in August, requiring all publicly-traded companies headquartered in California to include at least one female board member by the end of the year.

By the end of 2021, boards with five members must include two women and boards with six members must include three or more—and “inclusion” is the operative word, here.

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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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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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5 Characteristics That Make a Great Board Member

There’s no better place to learn about developing a board of directors than from chairmen and board members themselves. There are certain expectations for board members, as well as the expectation that each board will prepare its members to handle their respective responsibilities.

We recently interviewed the longtime CEO of an energy company. He began by saying that he appreciates all of his directors. To him, the best ones have a firm understanding of the industry, and an understanding of the issues being discussed. They support ethical decisions, and give their time and talent selflessly.

Thanks to that interview, we’ve put together a list of 5 characteristics that separate good directors from great directors.

1) Committed to the organization, through consistent engagement and involvement

An individual who commits to joining a board of directors is pledging to actively pursue ideas and solutions that can benefit the organization. While board activities typically happen after work hours, it’s important for directors to set aside enough time to give board matters their full attention.
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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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Tablet vs Laptop: Which One is Better for Meetings?

As computer technology gets smaller, faster, and more powerful, professionals are finding themselves with more options for the modern workplace. Specifically, technology companies are developing better tablets which could replace the traditional laptop computer for the professional on the go. So the question becomes, in the tablet vs laptop showdown, which tool is the most effective for meetings?

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Why Board Members Need to Understand ESG Standards

On Tuesday morning, January 16, Laurence Fink—founder and CEO of the investment firm BlackRock—sent an important letter to the CEOs of the world’s largest companies. In that letter, he explained, “Society is demanding that companies, both public and private, serve a social purpose. To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society.”

BlackRock is the largest investor in the world—thereby giving Fink’s voice a great deal of power and influence. But what exactly do his statements mean?

Put simply, Fink’s letter advocates for Environmental, Social and Governance criteria, which is commonly referred to as ESG. Investopedia defines esg standards as “a set of standards for a company’s operations that socially conscious investors use to screen investments.”

The environmental element examines how a company is handling their impact on the natural environment.

The social portion of the criteria scrutinizes how the company handles its relationships—with employees, partners, customers, its local communities, and more.

The governance component analyzes exactly what you’d expect: executive leadership as well as pay, auditing processes, shareholders rights, etc.
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Is Your Team Ready to Handle a Board Crisis?

According to corporate governance expert, Paula Loop, companies experience at least one board crisis every four or five years. That means every board should be prepared to step in and make important decisions in the event of an unforeseen issue.

Additionally, the public’s perception of corporate director responsibility has grown substantially. Whether it’s a public relations, technological, or financial crisis, shareholders and the public expect boards to not only be held accountable, but also to successfully navigate the company out of the crisis.

Is your board ready to fulfill that tall order? Here are some suggestions for being prepared.
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Exploring Types of Corporate Governance Training

Becoming a board member is a great achievement in and of itself, but becoming a successful board member poses a unique challenge—one that can be made easier through the utilization of top-notch corporate governance training.

The types of corporate governance training range in both price and in duration. In this blog, we’ll highlight some of those options.

Online Courses

Luckily, the digital age we’re living in presents many convenient ways for board members to grow their knowledge and expertise.

You can watch a quick 5-minute video about cyber security concerns online, or you can jump in a weeks-long online education track.

In fact, numerous corporate governance organizations offer extensive educational tools for directors. For instance, the National Association for Corporate Directors offers a course for board members called “Education Framework,” and clearly outlines its purpose: “The establishment of a standard in director education creates much-needed clarity about the knowledge and competencies directors should develop to become high-performing board leaders.”

A large number of sites offer similar online programs that are low-cost but highly respected.
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Board Member Teamwork: Strengthening Collaboration

Boardrooms are built on the foundation of collaboration. It is the ultimate purpose of their existence—bringing two or more leaders together to produce the best decisions possible.

collaboration (noun): the action of working with someone to produce or create something.

Unfortunately, boards don’t always focus enough time on emphasizing the importance of board member teamwork. But fear not!

We’re here with some helpful tips on how to cultivate a collaborative energy in your boardroom.

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