This is a course that gives you a behind the scenes look at what goes on in the boardroom. It's also a course about how to do it right? Whether you are a director or an executive. Have you ever wondered what happens behind boardroom doors? Or perhaps you have some idea but wonder whether what is happening is comparable to other organizations? Let's go even further to consider how strong governance contributes to the long term success and viability of an organization.

And because we're going to approach this topic from a finance point of view, what role does the CFO have in establishing and sustaining governance excellence? These are all important issues. Yes, governance is about stewardship and fiduciary responsibility, which boils down to ensuring that management is acting accordingly and abiding by all the appropriate rules. But long term success or failure has more to do with leadership succession and adapting to major shifts in the market of our largest hundred people. And he's a century ago, a mere 18 remain today. So succeeding at checking all the regulatory boxes without preserving a lasting legacy is a complete failure of the governance systems.

My name is Blair cook and I am a professional corporate director. I've served on the board of directors of multiple public companies, as well as my fair share of nonprofit organizations. And during my career, I've also served in a variety of senior financial roles, where responding to a board of directors was an important part of my responsibility. In this course, I'm going to explore this topic from both sides of the boardroom doors from the board's perspective and from management's, which regardless of your role is hopefully going to provide you with some insight and ideas. Let's begin by recognizing that there is no universally accepted model of governance. In fact, if you go around the world, different countries have different approaches.

For example, in Germany, each company has two boards. The supervisory board is composed of independent directors and represented Because of labor, the second board is called the management board is composed entirely of insiders. The size of the board is mandated by law to include 20. Directors, and in Germany, the banks play a significant role in the governance systems. In Japan, both the banks and government play a significant role in governance. The company's board of directors is large with as many as 50 directors, many of whom are insiders.

And when you have a high degree of insiders on the board, there is a risk of detachment from the outside ownership group. But in Japan, there's a greater amount of interrelationships between the companies, the banks and government, which has resulted in this style of governance. In North America and the UK we tend to have a single board who represents the owners of the company. Other financial stakeholders, such as employees and lending banks are considered by the board but are not their primary focus. Banks and government do not have a direct role in governance and board sizes 10 years To be smaller, averaging just over a dozen directors, let's build a conceptual model of the different flavors of boards of directors that you will come across in the North American style of governance. A lot of us have been involved as directors working for various associations and nonprofits, from your local PTA to charitable organizations.

Often these sorts of roles combined oversight with volunteering. These are what we might label as working boards, where the board of directors also performs tasks associated with operations, such as fundraising, programming or management. While this provides great experience, which can be highly rewarding in its own right, it's only a mixed reflection of the sort of corporate governance we will discuss in this course. Another type of board that some of us have been involved with is what might be labeled as an advisory board. And whether you are a director for a private company or serving on a school board here. discuss important issues and perhaps make recommendations on important decisions.

But management is under no obligation to follow your recommendation. This diminished level of authority also creates a partial reflection of corporate governance. In a truly constituted corporate board of directors. This body has the authority and responsibility to act as one voice on behalf of the ownership group. In the nonprofit world owners might be members or government. But in this delineated view of governance, the board is not management.

It does not have the day to day operational accountability. But the decisions made by the board can and do have directional implications for operations. I really like this quote, governance is not management one step up, it's ownership one level down. And when structured this way, governance is important. Governance matters. Let me challenge our thinking one step further to suggest That governance provides any organization with the opportunity to create another point of differentiation from its competition.

In other words, a strong board can and should provide the organization with another dimension of competitive advantage, which I'm going to call this course governance advantage. This might be a far cry from how some of you are thinking of your own boards today, a lesson lightened view of governance is that is just another barricade or hurdle to overcome to get anything done, or it's a necessary evil because of the malfeasance of the likes of Enron. This is an extremely narrow view of what governance should represent. Sadly, even properly constituted boards vary in their levels of effectiveness. So even following each and every regulatory rule and requirement does not guarantee an effective board. At the one end of the spectrum you might find boards that are inactive and passive and rubber stamp is a management decisions.

This is an adding value and in In this context, the board serves in a capacity much like a monarchy in modern times, largely ceremonial. At the other end of the spectrum, you have boards that are composed of wise advisors who are energized and engaged in their mandate, and provide strategic advice to management that helps them to compete more effectively. This course is about taking your board on a journey from points left on this spectrum to points closer to the right. Governance boils down to two key concepts. And Jim Brown, the author of the imperfect board member has a catchy way to summarize the role of the board to direct and protect directing focuses on the future. It's about setting a course for the organization by establishing mission, vision and values and vetting management strategy to strengthen its development and implementation.

Protecting on the other hand ensures that the interests of the ownership group are always sustained, considered and monitored and this involves ensuring that many management is acting in a way and is achieving results that are advancing the organization towards that mission, vision and value while at the same time respecting the values. The success of governance requires a willing cooperation between management and the board of directors. Governance advantage hinges on three primary get in practice on define board leadership roles that we will explore throughout this course. The first board leadership role is one of the informer, and deals with communicating information between management and the board that enlightens the directors understanding of the business. The second board leadership role is one of the conductor and deals with controlling the discussion matters of the board. This role maximizes the collective talents of the directors by carefully and intentionally ensuring that the matters discussed have the highest importance.

And finally, the third board leadership role is one of the toughest This role manages the group dynamics of the board to ensure that all points of view are heard and that all discussions culminating consensus, corporate governance models have not evolved to the point where these roles are attributed to a specific individual. And in practice, these roles get distributed between members of the executive, including both the CEO and the CFO, and individuals on the board. And we will explore these board leadership roles and they're important so that you can return to your own board, and consider whether these roles are present and effective. As the CFO, you are most likely the primary manager of information, which naturally lends your skill set to the role of informer. The conductor role is often played jointly between the CEO and the lead director and the facilitator role needs to be played by a lead director.

But the key is that they are masters at facilitating group and meeting dynamics, developing your professional skills in each of these ways. roles will serve you well in any boardroom context. Whether you're a CFO or a director of your local church, for those of you aspire to become a professional corporate director, it will give you a glimpse into the inner workings of the boardroom. With those objectives and the outline presented on your screen in mind. I hope you'll join me as we dig much deeper into each of these topics. Click on the first lesson to begin