Directors Source News

• Director Alert: Increasing Public
  Scrutiny of Not-for-Profit Organizations – Questions for Directors to Ask
• Diversity Briefing: Questions for Directors
  to Ask
• Building High Performance Boards

• Not-for-Profit Corporations Act
• IFRS Transition Disclosure Review

• Post Your Directorship Opportunity
  Here

• Add your Profile to the Where to Find
  Directors Printed Directory

• Free CICA Webinar August 18 – Governance Committees: Performance Catalyst for the Board
• ICD Ontario Chapter Breakfast: Winning in International M&A – The Director's Role
• Get on Board
• CSCS Annual Corporate Governance Conference
• Nonprofit Risk Management Conference

• The Handbook of International Corporate Governance

• Lead Directors: A Study of Their Growing Influence and Importance
• Global Fraud Survey: Boards Have Increased Concern About Liability
• Board Succession Oversight

Policy gaps, failures of oversight or poor responses to information requests can cause significant harm to not-for-profit organizations. This can include reputational damage, loss of stakeholder trust, and reduced donor funding.

This document is intended to help not-for-profit directors ensure that the organizations they govern are prepared to respond to increased public scrutiny. It addresses issues such as the need for a robust policy framework, ensuring that policies are applied, and responding to requests for information from members, media, or the general public.

This briefing demonstrates that, when managed properly, diversity can provide an important competitive advantage for business.

The document focuses primarily on the importance of diversity within companies, and the ways in which it comes to the attention of the board through the board’s oversight of areas such as strategy, risk and executive succession. It also addresses the importance of diversity on the board itself and offers questions that are intended to be a catalyst for useful dialogue among directors, for directors with management, or with outside advisors.

The Canadian Coalition for Good Governance (CCGG) has developed Building High Performance Boards to provide boards guidance on how they may structure themselves and their policies so that they may foster good governance practices. CCGG believes that good governance is a condition − not a guarantee − of long-term financial performance, but it cannot be just a theoretical exercise.

CCGG best practices focus on developing high performance boards that are accountable and independent; have experienced, knowledgeable and effective directors and committees; have clear roles and responsibilities; and engage with shareholders.

Link to full document

• 95% of reporting issuers reviewed disclosed their IFRS changeover plan in their 2009 MD&A.
• 60% of issuers described milestones and anticipated timelines associated with each of the key elements of their IFRS changeover plan. All issuers should continue to focus on enhancing disclosure in this area so that investors can readily assess whether the project is progressing in accordance with the IFRS changeover plan.
• The majority of issuers identified significant accounting policy differences between Canadian GAAP and IFRS. However, issuers could improve their discussion of accounting differences to enhance investors’ understanding of the impact of adopting IFRS on the issuer. Specifically, disclosure should have linked accounting differences to various financial statement categories in the balance sheet or the income statement. Such disclosure would have provided a basis for discussing the quantified effects of IFRS conversion in future MD&A filings.

Link to full document

Add your Profile to the Where to Find Directors Printed Directory

Are you a CA serving on the board of a for-profit, not-for-profit or public sector organization? Are you interested in other board of director opportunities? Later this year the CICA will be publishing Where to Find Directors, a who's who of CAs for board positions. We are seeking members with board experience to be profiled in this prestigious publication that will be promoted to companies looking to find CAs to serve on their board of directors.

Click here to go to Directors Source and then click Manage Profile and log in or register to submit your profile for the directory. If you have any questions regarding Where to Find Directors, please e-mail directorssource@cica.ca.

CICA Webinar – Governance Committees: Performance Catalyst for the Board

Date: August 18, 2010

Session Description: The governance committee is unique among the board's committees. Rather than addressing only a single aspect of the board's mandate, the governance committee focuses holistically on the entire board. As such, it can serve as a centre for self-reflection to build and enhance the board's effectiveness.

David Anderson, PhD, President of The Anderson Governance Group, will address the changing role of the governance committee, including:

• Understanding the role and potential value of the governance committee
• Building an effective governance committee
• Composing the board and creating conditions for its success
• Enhancing the board's performance effectiveness
• Emerging roles to help boards create long term value

The webinar, sponsored by Robert Half, is free and open to CAs and others interested in governance.

ICD Ontario Chapter Breakfast: Winning in International M&A – The Director's Role

Date: September 14, 2010
Location: Toronto

Participate in a discussion with a panel of M&A experts: Andre Hidi, Head of the BMO Capital Markets Global Mergers & Acquisitions group, Richard Ross, Director and former CEO of Inmet Mining, and Kevin Thomson, Davies Ward Phillips & Vineberg LLP.

The session will focus on how value can be created as global industry restructuring resumes, identifying the accompanying risks, what plans and pace should boards expect of management in globalizing industries, and the changes in director duties with regard to takeover offers and acquisitions.

Get on Board

Date: Fall 2010
Locations: Toronto, Calgary, Vancouver, Montreal

The Canadian Board Diversity Council (CBDC) 'Get on Board' 2010 Education Program is designed to complement existing director education programs. The CBDC mandate includes equipping board-ready and high-potential diverse candidates with the tools to pursue board placement.

The program emphasizes increasing participant knowledge of the recruiting process, board resume preparation, and development of board career action plans.

Link for more information or to register

CSCS Annual Corporate Governance Conference

Date: August 22-25, 2010
Location: Lake Louise, Alberta

The Canadian Society of Corporate Secretaries' 12th Annual Conference will feature expert panelists and speakers discussing top of mind issues on the evolving corporate governance landscape. The event brings together participants from all across Canada and provides opportunities to exchange ideas, to discuss current challenges and to share best practices. Participants will be provided relevant up-to-date information about the changing face of corporate governance both nationally and internationally.

Nonprofit Risk Management Conference

Date: October 28, 2010
Location: Toronto

Designed for directors and senior leaders of not-for-profit organizations, the event includes the following Governance Risk Workshops:

• Board - ED. Relationship: Creating a Powerful Partnership
• Governance Nightmares and How to Avoid Them
• Financial Oversight: What directors need to know and are often afraid to ask
• Governance Checkup in Light of New Legal Requirements
• Building Your Board Up and Keeping it Strong

The Handbook of International Corporate Governance

The Handbook of International Corporate Governance looks at shareholder rights and directors’ responsibilities, control and disclosure issues, and the relevant legislation and codes of practice.

The book provides coverage of corporate governance practice in 18 separate jurisdictions, as well as five regional overviews, with each profile focusing on key areas such as: the development of laws, models and codes; board structures; shareholder rights; disclosure and transparency; directors; and executive pay and performance. A chapter on corporate governance in Canada is included.

Link for more information

This 2010 study from PwC addresses the current and future role of lead directors and discovers that they will be expected to delve further into shareholder and governance issues, be more involved in risk management, drive succession planning to ensure the process produces top leaders, and strengthen the independence of the board. Lead directors from 16 sectors with revenue ranging from $4 billion to $100 billion were surveyed on crisis management, succession planning, risk management and their roles and responsibilities.

Key findings:

• A majority of those surveyed have input on the chairman’s development of agendas for board meetings and materials to be sent to the board, and all of them have authority to call and preside over executive sessions.
• As for communicating with the chief executive between board meetings, everyone surveyed talks to the CEO, and half talk to the CEO more than five times.
• Depending on the number of board meetings held each year, these conversations can be quite frequent. Some companies meet quarterly, and larger and more complex companies may meet as many as eight to 10 times.
• The job is a demanding one requiring the majority of the survey group to spend six to 10 hours a month beyond the time they spend as a director. In some cases, that commitment grows considerably to 16-20 hours or more.
• The vast majority, 75 percent, receive additional compensation to be lead director, regardless of how much time they dedicate to this role. There is no consensus, however, on how much to pay. Respondents report a wide range − from $5,000 to $150,000 per year in additional compensation. The mean compensation reported is $77,500, and the average is $35,575.

This Ernst & Young survey report, which includes responses from more than 1,400 CFOs and heads of internal audit, legal and compliance in major corporations in 36 countries, shows that from a global perspective, corporate boards in Latin America (95%), the Middle East and Africa (87%), Central and Eastern Europe (84%) and Australia (81%) are particularly concerned about their personal liability for the companies’ fraud, bribery or corruption. While 72% of directors in North America are concerned about these risks, the survey reveals that U.S. boards are asking more questions about bribery and fraud than their global counterparts.

Although less fraud was experienced in Canada than globally, the survey indicates that levels of fraud and fraud risk remain high. In fact, nearly 10% of Canadian companies surveyed have experienced “significant” fraud in the past two years. And although reported levels of bribery have declined, the survey reveals that some Canadian businesses may cross the line to survive recessionary challenges. When asked what actions are justifiable to help a business survive, no Canadians feel that giving or accepting personal gifts is appropriate. However, 29% of Canadian respondents say they justify entertaining clients as acceptable business expenses in these circumstances. Some, (8%) feel that misstating financial performance can be justified, and 6% say cash payments can be justified.

Confidence in Canada is high, with 80% of respondents believing in the effectiveness of internal controls to detect fraud, bribery or corruption, and most companies do assess their fraud risk. Only 6% of Canadians (15% globally) have never assessed their fraud risk.

More than half of companies today cannot immediately name a successor to their CEO should the need arise, according to recent research by Heidrick & Struggles and the Rock Center for Corporate Governance.

Key findings from the survey include:

• While 69% of respondents think that a CEO successor needs to be “ready now” to step into the shoes of the departing CEO, only 54% are grooming an executive for this position.
• A full 39% of respondents cited that they have “zero” viable internal candidates.
• On average, boards spend only two hours a year on CEO succession planning.
• Only 50% have a written document detailing the skills required for the next CEO.
• The majority of firms (65%) have not asked internal candidates whether they want the CEO job, or, if offered, whether they would accept.
• Once viable internal candidates for the CEO job are identified, 38% of firms think that the external search should continue at the same pace.
• Only 50% of companies provide on-board or transition support for new CEOs.

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