A Strategic Approach to Filling Board Positions Is Critical — Regardless of Your Gender

Written by:
Debbie Stojanovic, CEO, Nealon Consulting
& Deborah Rosati, Founder & CEO, Women Get On Board

Diversity, and gender diversity in particular, is a top agenda item in boardrooms today — as it should be. It’s a priority not only because there are now legislative and regulatory changes that require it, but also because it’s just good business practice.

Research shows that the right board composition can enhance decision-making processes and augment an organization’s performance and market reputation. ¹  Can an improperly composed board pose a reputational risk for your organization? You bet.

Today, we can’t open a newspaper, attend a meeting/event or have a general conversation without touching on some aspect of diversity. And that’s a good thing. From a board perspective, the conversation is shifting from why we need more women at the table to how we can accelerate progress. In light of this, it will be interesting to see what transpires over the next few months as many public company AGMs take place. The board and management can and should expect questions from shareholders and the public-at-large about their views on diversity and the company’s plan to ensure its people are reflective of the communities in which we live. ²

Case in point this year’s TD Bank AGM. Throughout the meeting, there were several queries about diversity. In fact, a number of shareholders wanted to know two things: (i) what TD has and is doing to increase the number of women on its board — currently at 38% and (ii) what the is bank doing about women in leadership, which is the root cause of this issue. ³  “It’s a major priority,” said Bharat Masrani — the bank’s CEO.

An example where the pace of change is very slow is Constellation Software. A year ago, a shareholder resolution calling for diversity on its all-male board garnered 42% of votes, this year’s vote moved to 49% support—but in the end—it still failed. Despite the outcome, this is another example of the shifting views in corporate Canada about the importance and value of diversity on boards of directors and in executive suites.

The corporate view of recruiting more women on boards is changing and it helps to have input and support from organizations, such as ISS and Glass Lewis. By releasing updates to their voting guidelines for Canada and the US, these organizations are helping to move the dial forward. In fact, according to the guidelines, they will recommend a “withhold” vote for the chair of the nominating committee (or chair of the board, in absence of a nominating committee) where a company has not disclosed a formal written gender diversity policy and/or where there are no women directors on the board. Similarly, others are having their say too—the New York State Retirement Fund, for instance, announced that it will oppose re-election of directors at hundreds of public companies that do not have any women on their boards. At home on our own soil, the Government of Canada brought transparency and diversity to boardrooms with the recent assent of Bill C-25 — legislation that advances gender equality and diversity in Canada’s corporations. It’s unacceptable that women make up 48% of the workforce, but hold an estimated 14% of all Canadian board seats and approximately 22% of the board seats in Financial Post 500 companies.

The train has clearly left the station and companies that have done the work and identified gaps should be recognized as leaders. That said, board recruitment is not always easy — it takes time to find the right person for the job. That is why companies need to be strategic in their approach — which includes identifying the skills required before the board search begins. More information about purposeful board composition can be found in the Canadian Gender and Good Governance Alliance’s Directors’ Playbook.

There are a number of organizations that are dedicated and focused on helping companies find experienced, knowledgeable and qualified women corporate directors to join boards and fill gaps in skills.

Women Get On Board — as an example — is a member-based company that connects, promotes and empowers women to corporate boards. Finding the right organization to assist you with your board search is critical as they should have extensive experience matching qualified women corporate directors with the right board. It’s not just about finding a female candidate to fill a board position, it’s about finding the right woman with the right experience, knowledge, skill set and personality to work with the company’s existing board. It’s about setting both the company and the selected board member up for long-term success.

Debbie Stojanovic is the CEO of Nealon Consulting and sits on the Advisory Board of Women Get On Board. She is a leading marketing, communications and business development executive who has extensive board experience.

Deborah Rosati is a leading and serving corporate director and, founder and CEO of Women Get On Board.

Thank you to Paul Gryglewicz, Senior Partner of Global Governance Advisors who also contributed to this article.

Network Mapping Your Way onto a Board

Joining a board is about fit and style. The Board wants to make sure that your style will fit in. To help them decide, think about your network and how you might be connected to any one of the Board members. This is what I call “network mapping.” Use your network to map how you might be connected to members of the Board. The more connections you have to the Board, the more comfort they can get on how you will fit in. Don’t be afraid to ask for introductions!

To help you map your network, it is important to understand who can help connect you to a board opportunity. Your network can be broken into the following groups:

Decision Makers: these are individuals that will make the final decision on who will join their board. These include: board members, in particular, the Chair of the Board and Chair of the Nominating Committee.

Connectors: Connectors make change happen through people. These are individuals that will connect you to board members, CEOs and Executives of a company you would like to serve on. Examples may include: Lawyers, Accountants and other professional service firms and thought leaders. Refer to my blog post: “Are you a Connector?” http://deborahrosati.ca/2015/06/are-you-a-connector/

Mentors: Mentoring is about advising. These are individuals that inspire others in achieving their best and find joy in encouraging them to make a difference. For more on mentors, please refer to my blog post: http://deborahrosati.ca/2015/03/the-power-of-mentoring

Sponsors: Where mentoring is about advising, sponsoring is about acting. Sponsors are typically Executive Sponsors inside your company. They are willing to put your name forward for board opportunities. Sponsors may also be individuals you have worked with in the past who believe in you. When you are looking for a sponsor, remember that it is a two-way relationship based on mutual respect and trust. You both need to be invested. Your sponsor is putting their name on the line by championing you, so you need to follow through with their advice and work hard to keep your sponsor’s good reputation intact. For more on Sponsors, see my blog post: “The Power of Sponsoring”: http://deborahrosati.ca/2015/05/the-power-of-sponsoring/

Organizations: Think about the organizations you are affiliated with, your alma mater, not-for-profits, professional organizations/associations and member based organizations (like-CPA Canada, CBA, GPC etc.) and how you can leverage these organizations.

Network mapping your way onto a board is an ongoing process-that you need to be strategic in connecting to your network. To your networking!

Are You Diversifying Your Board Portfolio?

I began my board journey without the thought of diversifying my board portfolio. In saying “board portfolio”, I am referring to the various boards you lead and serve on. These boards collectively make up your board portfolio. Analogous to your investment portfolio, you want to be strategic in developing your board portfolio to accurately reflect your risk profile and the stage/age of your career. Just like your investment portfolio, you should monitor and review your board portfolio on a regular basis to ensure you are getting a return on your board portfolio.

When thinking of diversifying your board portfolio, here are three key areas for consideration:

1. Consider the Evolution of Your Board Journey

In evaluating the evolution of your board journey, you may think about the size and stage of the boards you serve on. For example, if you join the board of an emerging company, the director’s role is often weighted to a value-add role and more hands-on. As the company matures, the role may become more weighted to an oversight role. To better understand your role on a board, please refer to my previous blog post here.

With that said, it is important to consider the time commitment required for each board you serve on. Each board you serve on will go through different stages as a company. These include: emerging, growth, transformation, downsizing and possibly restructuring. Each stage that a company goes through will require different time commitments, so it is critical to be aware of the amount of time you have for each board you serve on.

In being aware of the stages a company goes through, it is important to consider that each board you serve on will be faced with different governance issues during your tenure that will add to your board governance experience. Some governance issues that you might face as a board member include: CEO succession/development, M&A transaction, IPO, major investments, disruption in the industry.

Each stage a board cycles through may present a new or different pace at which they work, depending on what issues the company faces. As a colleague of mine, Tamara Paton, a serving Corporate Director states:  “Even the pace of change facing an organization can give us fresh insight into how organizations work, how to motivate and compensate executives, and how to anticipate disruption.”

As your board journey matures, consider taking on governance leadership roles. As you evolve in your governance experience, you may consider stepping up in leadership roles as a Chair of respective committees you serve on. As a Chair, you learn to: i) generate dialogue among your board colleagues, and ii) facilitate the committee to make informed decisions. Both experiences prove invaluable in advancing your skills as a member on a board and in diversifying your board experience.

2. Consider Going Outside Your Comfort Zone

When looking to go outside of your comfort zone, ask yourself the following questions:

Have you thought about diversifying your board portfolio by joining boards that are in new industries or sectors? While joining a board in a new industry or sector may present some level of risk, it may also offer an exciting opportunity to expand your skillset. For example, I joined a Canadian Medical cannabis company board that recently went public (see: MedReleaf, TSX-LEAF: https://medreleaf.com). I was initially considered for this board because of my financial expertise, public company, retail/consumer and regulated industry experience. For me, joining MedReleaf offered an opportunity to take learnings from other industries and apply them to the newly emerging cannabis industry.

Have you considered joining a new committee?  I am typically asked to join an Audit Committee because of my financial expertise. However, sometimes it is valuable to venture outside your comfort zone and serve on a committee that will present a steep learning curve. You may bring different perspectives and new ways of looking at governance/business matters the board is facing and prove to be an asset to the committee. Branching out and joining a new committee may open the doors to other opportunities. For example, sometimes a Special Committee (SC), – comprised of independent board members is formed to address unique issues facing the company. The SC issues may include: CEO search, a significant transaction or a special investigation. Such experiences provide unique and challenging learning opportunities where you will learn new skills which you can apply to boards you are already serving on.

When is the last time you took risks or challenged yourself regarding your board portfolio?

When you join a new board or committee, you are provided the opportunity to meet new people outside of your current network. I have joined boards where I was the “outsider” to the existing board and had to “earn trust and credibility” of my board colleagues. It takes time and you need to show up, be prepared, listen and ask questions. While intimidating at first, expanding your network provides the opportunity to learn from others with different industry experience.

3. Other Issues to Consider When Diversifying Your Board Portfolio

Of vital importance for consideration when taking on new board opportunities is the corporate calendar and the fiscal year-ends. If you have several corporate boards with a fiscal year-end of December 31st, you may experience conflicting demands in regards to your time and schedule. As many of us know, fiscal year-end presents a demanding financial reporting period.

Of final consideration when looking to diversify your board portfolio is board compensation. As a Corporate Director, your board compensation can vary depending on the size and stage of the company you are serving as a board member. There are some good references on board compensation that can be found here: “Canadian Spencer Stuart Board Index 2016 – Board Trends and Practices of Leading Canadian Companies”

When you are thinking about diversifying your board portfolio, the type of board compensation is a consideration. Are you prepared to receive 100% equity based in the form of Deferred Share Units (DSUs) or a mix of cash and equity?  Your board compensation may also depend on the committees you serve on and whether you chair the board or a committee.

As you consider new board opportunities, it is important to consider diversifying one’s board portfolio, otherwise why join a new board?

Are You Thinking of Creating an Advisory Board?

I’m often asked about whether an emerging company should create an Advisory Board versus forming a governance fiduciary board. My response to entrepreneurs thinking of creating an Advisory Board is to be strategic in the formation of your Advisory Board.

An Advisory Board is not a Board of Directors with legal and fiduciary responsibilities. In contrast, an Advisory Board does not have any formal legal responsibilities and liabilities. Rather, an Advisory Board is created by the CEO of the company to get advice and support.

Over the years I have been invited to serve on Advisory Boards & Councils and have enjoyed providing strategic advice and guidance. More recently, I had the opportunity to create an Advisory Board for Women Get On Board, consisting of members with experience and connections in governance, law, investment banking, accounting, financial services, corporate finance, mergers and acquisitions, professional development, and media. Thank you all for your commitment and support to help us fulfill our mandate to connect, promote and empower women to corporate boards.

Five key strategic considerations when creating an Advisory Board:

1. What is the purpose of this Advisory Board?

Usually an emerging company creates an Advisory Board to augment the talent on the leadership team with accomplished and connected business leaders. These business leaders are thought leaders, connectors and influencers that will use their network to make connections and provide strategic guidance and expertise to help accelerate growth, manage risk and enhance operational performance.

2. Who do you want to invite on your Advisory Board and what is the value they will add?

First of all, you will want to prepare a skills matrix to identify the skills/expertise you need on your Advisory Board. You may want to bring in business leaders who have skills/expertise in areas like Digital Media, Private Equity & Venture Capital M&A, Capital Markets, IT, Sales and Marketing, as well as knowledge of the industry. It also helpful for prospective Advisory Board members, know the company they keep!

3. How would you compensate your Advisory Board members?

If you are an emerging company, cash is king. You can certainly grant some form of stock options or equity to the Advisory Board for their time and their network. Or maybe it is about these business leaders paying it forward and helping an emerging company with its strategic planning, access to capital and customer introductions.

4. Should there be term limits and is there a succession plan?

It is important when you ask someone to join your Advisory Board to define the expectation of their time commitment. Most Advisory Boards that I have been involved with typically have a 2 to 3-year term and meet 3 to 4 times a year in person. Sometimes there is a sub-committee that you will be asked to serve on, and occasionally there will be calls with the CEO on as-needed basis.

As you build your Advisory Board the skills/expertise you need in the early formation of your emerging company may be different as you grow. Be mindful of your succession plan for renewal of your Advisory Board members.

5. What is the mandate of the Advisory Board?

Do you have a terms of reference or a mandate for the Advisory Board that describes the following items?

Expectation – What is the expectation of the role of your Advisory Board members. Is it to provide strategic guidance, for introductions, or to attend meetings?

Time Commitment – Is there a meeting schedule? How often will you meet?

Term Limits – How long is the term?

Compensation Terms – Is it a “pay it forward” or are there stock options or some form of equity, or a retainer?

Marketing – Will you be showcasing your Advisory Board members on your website and other marketing materials?

Once you have thought through these five key strategic considerations on creating an Advisory Board, it is really up to the entrepreneur to engage members of their Advisory Board. The more engaged your Advisory Board members are the more they can help you grow your emerging company!

Why a Diverse Board Makes Good Business Sense

There is a lot of focus currently on the topic of diversity on boards. The underlying premise for diverse boards is no longer about good corporate citizenship but rather about contributing value to a business, and that makes good business sense.

Top 5 Business Reasons for Diverse Boards

1. Improve corporate financial performance. Studies have shown that companies with more diversity on their board have had higher financial performance in three important measures: Return on Equity, Return on Sales, and Return on Invested Capital.
2. Enhance decision-making quality. Diversity of thought comes from, race, gender and ethnicity and extends to age, culture, personality, skills/expertise, educational background and life experiences. More diversity on boards helps avoid ‘group-think’ and increases independence, which can enhance the quality of decision making on the board.
3. Broaden networks to tap into for board renewal. Board members should ask themselves:
   ~Does the composition of the board represent the employee base, the customer base or business partners/competitors?
   ~What skills or perspectives do we need to broaden that is not currently on the board?
   ~What is our diversity mandate and what steps have we taken to increase board diversity? (For more information on diversity mandates, please read my related post: Are you advancing your Board Diversity mandate?)
4. Foster innovation and creative thinking. Functionally diverse teams are more innovative, set clearer strategies, are more likely to react to competition, and are quicker to adapt to organizational changes.
5. Enhance board effectiveness. Boards need to be accountable for their own actions and this begins with evaluating their own performance through annual board assessments.

If you are building a diverse board because it makes good business sense and are seeking qualified diverse board candidates, please email connect@womengetonboard.ca.

How to Prepare for Corporate Board Roles

The first step in getting prepared to lead and serve on a corporate board is to make a plan. As, I’ve written about before, getting board-ready is a journey. A journey where you need to be realistic in your skills, experience and value that you bring to a corporate board while acknowledging that there are lots of qualified corporate directors looking for corporate board opportunities.

I’m often asked how to begin a corporate board journey. And my best advice is to ask yourself these 10 questions to help you prepare yourself to lead and serve on a corporate board:

10 Board-Ready Questions

1. Do you have a minimum of 10 to 15 years of experience in a senior executive role in the public, private, crown or not‐for‐profit sectors?
2. Are you prepared to commit at least 200 to 300 hours per year to a corporate board role?
3. Do you have the support of your own Board of Directors and/or senior executives to serve on a board?
4. Do you have a formal governance certification or designation (C. Dir or ICD.D) from the Directors College or the Institute of Corporate Directors?
5. Have you ever served on a board, not‐for‐profit or for profit?
6. Are you a team player that understands the dynamics of boards is one of the most critical components of good governance?
7. Do you fully understand the role, responsibility and liability of a corporate director?
8. Do you understand the difference between a board of directors role versus a management role?
9. Do you have financial acumen—can you read and understand financial statements?
10. Do you have experience in critical areas in our changing world such as Risk Management, International Markets, M&A, Cyber Security, Digital Media, Big Data, etc.?

To help you begin your board journey, Women Get On Board has two upcoming workshops; “How to prepare yourself for Board roles” on November 2, 2016 and “How to get yourself on a Board” on December 7, 2016.

Hope you can join us!

Understanding Your Role on a Board

Originally posted on September 15, 2015.

There are two roles you must play on a Board, one is Oversight and the other is Value-add.  I will highlight both roles with an extract from a chapter that I co-authored with Donna Price in 2008’s Entrepreneurial Effect by James Bowen and Glenn Cheriton, titled Corporate Governance-Directors of Emerging Companies.

(To promote understanding of a director’s role on a board and how to prepare for board opportunities, I am again co-facilitating Women Get On Board’s Getting Board-ready workshops from October to December 2016. Learn more about them here: http://womengetonboard.ca/workshops/.  Hope to see you there!)

The Oversight role on a Board

“The primary responsibility of directors is to oversee the management of the business and affairs of a corporation. This is referred to as an oversight duty. As a general matter, a business corporation’s objective in conducting business is to create and increase shareholder value. To this end, in addition to performing an oversight duty, boards also perform a value-added role. Decision-making generally involves developing corporate policy and strategic goals with management and taking actions on specific matters related to those policies and goals. Other matters, such as changes in the charter documents, election of officers, (and other matters referred to above), require board action (and sometimes shareholder action) as a matter of law.

All directors must understand that decision-making and oversight responsibilities come from prescribed standards of duty and conduct.

The corporate statutes impose two principal duties on directors: A fiduciary duty and a duty of care. As fiduciaries, directors have an obligation to act honestly and in good faith with a view to the best interests of the corporation.

As a director, you must exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. This is known as the duty of care. In discharging the duty of care, a director must be concerned about process at least as much as, and perhaps more than, the actual decision taken. The duty of care underscores the need to implement corporate governance procedures to guide the board in decision-making. This means that pre-meeting, meeting and post-meeting practices should be oriented to providing the right information within a timeframe that will permit diligent discussion and decision. If a board makes a decision that may be contentious from a business perspective, provided the board gave sufficient thought and consideration to the decisions and were otherwise diligent, it will not normally be criticized. This is sometimes referred to as the “business judgment rule” and generally speaking, courts will not substitute court judgment for the business judgment of the board.”

The Value-Add Role on a Board

“In the formative years of an emerging company, the director’s role is more often weighted to a value-add role and as the company matures the role becomes more weighted to an oversight role.

Keeping in mind that the overall role of the board is to maximize shareholder value, directors also provide a level of insight, business acumen and personal network that extends beyond the company’s management team. These are some of the components that contribute to a director’s value-added performance.

The collective board should have sufficient industry knowledge and domain expertise (such as technical, operational or governance) in order to add value to board decisions and strategic priorities. Paramount to their duties, directors must select and oversee the CEO and monitor company performance. A value-added board should provide insight, advice and support to the CEO and management on key decisions and issues confronting the emerging company. Caution: “Nose in, Fingers out!” Boards must balance being too engaged in the day-to-day operations, with performing an oversight role.”

Women Get On Board presents Getting Board-Ready Workshops

These workshops help women gain insights and learn about the skills they need to prepare for board opportunities. Each half-day workshop will be facilitated by corporate directors and governance experts.

Understanding your role on a Board,  Wednesday, October 5, 2016; http://bit.ly/WorkshopOct5

How to prepare yourself for Board Roles, Wednesday, November 2, 2016; http://bit.ly/WorkshopNov2

How to get yourself on a Board, Wednesday, December 7, 2016; http://bit.ly/WorkshopDec7

Top 10 Tips to Help You in Your Journey to a Corporate Board

Being a Corporate Director is much different than being an executive. A Corporate Director’s role is one of oversight whereas an executive’s role is to manage day-to-day operations. Getting yourself board-ready is a journey where you need to be realistic in your skills, experience and value you bring to a board. You also need to be mindful that it is a very competitive marketplace. There is an over-supply of qualified Corporate Directors for a limited supply of available corporate board seats.

As a Corporate Director and co-founder of Women Get On Board, my goal is to help executives make that transition effectively. This is why I want to share my top 10 tips to help you in your journey to a corporate board.

1. Be fearless — use your confidence to embrace change.
   ~Be independent minded and stand up for what you believe in.
   ~Do the right thing and be ethical in your decisions.
   ~Have courage, be brave, be decisive and be determined.

2. Plan your journey, set goals and plan the path to your success.
   ~Be aspirational in your goals. What do you have a strong desire, longing, aim or ambition for.
   ~Think outside your comfort zone. Where do you want to be in 5 years, 10 years or maybe even 20 years from today?
   ~Tell your inner circle about your journey, goals and/or plans for your future.

3. Be curious — explore new opportunities and solve problems.
   ~Don’t be afraid to ask questions; seek to understand.
   ~Look for ways to re-invent yourself.
   ~Change is good, change is inevitable, so make change part of your life.

4. Get involved in your community.
   ~Seek out not-for-profit board opportunities.
   ~Volunteer for a cause that you care about.
   ~You will meet new people outside of your current business circle that you can help make a difference. 

5. Continuous learning — invest in your professional development.
   ~As professionals we have continuing professional development requirements…go beyond your requirements.
   ~Mastery =10,000 hours in a particular skill/expertise etc.
   ~Knowledge is power, so keep learning!

6. Be your authentic self. (From The Four Agreements by Don Miguel Ruiz)
   ~“Be Impeccable with your Word.”
   ~“Don’t take anything Personal.”
   ~“Don’t Make Assumptions.”
   ~“Always do your Best.”

7. Network, network, network.
   ~Go to events that matter to you and meet new people.
   ~Invite someone new out to lunch or coffee.
   ~Ask for introductions.

8. Be visible — speak up and stand out.
   ~Be a thought leader; post your blogs, presentations and articles on social media.
   ~Speak up/comment on topics you care about or have expertise on.
   ~Take on leadership roles.

9. Seek out mentors and sponsors.
   ~Look for a mentor outside of your organization. Find someone who inspires you.
   ~Become a mentor to others. You will learn a lot from them!
   ~Seek out a sponsor. Look for someone who will make introductions for you.

10. Embrace and use social media to promote yourself.
    ~Enhance your profile on LinkedIn.
    ~Be active, thoughtful and relevant in your social media.
    ~Leverage your LinkedIn to attract new business, speaking and career opportunities.

If you would like more information and tips on how to prepare yourself for board roles, please visit Women Get On Board for information on the 2016 Getting Board-ready workshops. The purpose of the workshops is to help women gain insights and learn about the skills they need to prepare for board opportunities. These half-day workshops will be facilitated by corporate directors and governance experts. They will share their experiences to empower women to become more confident in order to lead and serve on boards.

Are You Advancing Your Board Diversity Mandate?

It still surprises me that in the 21st century Canada’s boardrooms are not more diverse. In fact, I often get asked to consider a board opportunity because the company is looking to add diversity to their board. As of January 2015, the Ontario Securities Commission’s (OSC) implemented disclosure rules for TSX-listed companies to “comply or explain” in regards to their board diversity. It is hopeful that this will lead to positive changes ahead in how corporate boards recruit new board members.

Be an Agent of Change
As a corporate director, I believe that the OSC “comply or explain” disclosure rules present an opportunity to build stronger boards through change. There is research to support that more women on boards brings better financial performance including higher return on sales and better stock growth. As well, non-financial performance, like bringing diverse viewpoints, skills and experience, can improve overall decision making, enhance a company’s capacity to build a pipeline of potential future women executives and encourage innovation.

So, how can you be an Agent of Change in making board diversity a strategic opportunity for board-building? The first step is to ask yourself these 10 questions to help advance your Board diversity mandate.

10 Board Diversity Mandate Questions

1. Do you perform an annual board assessment of your current board composition, and do you have diversity of thought, skills, experience, gender, age, industry and geographic?
2. Have you defined what board diversity means to your company in terms of the commitment and needs?
3. Do you have set term limits and/or age limits for your current board?
4. Do you have a board diversity policy that sets out targets for women representation on your board?
5. Do you go outside your current network when looking for new board talent?
6. Do you have an internal diversity champion?
7. Do you perform an annual board performance evaluation for board renewal?
8. Do you keep an evergreen list of diverse board candidates for board renewal?
9. Do you have a board succession planning process?
10. Do you ensure there are diverse board candidates in the board search process? (Do you know about Women Get On Board and our directory that we are building of qualified women corporate directors?)

Diverse boards enhance a company’s financial and non-financial performance. So, let’s all step up today and collectively be Agents of Change in advancing board diversity in Canada. Together, we can make a difference in advancing diversity as a strategic opportunity for board-building.

Top 5 Tips to Help You Become Financially Literate to Serve on a Corporate Board

Every Board member has a financial oversight role. Even if you don’t have financial expertise, you are still expected to have a level of financial literacy. This means that you need to have an understanding of the fundamental concepts, conventions and principles underlying financial statements.

Top 5 tips to help you become financially literate for corporate boards:

1. Develop a plan and begin the work. Begin by reviewing the annual filings of TSX listed companies that you are interested in.
2. Look for a mentor or someone who has financial expertise. Ask someone you know that has financial expertise if you can spend time with them over the next year to help you understand financials.
3. Do your financial due diligence before joining corporate board. Review the annual audited financial statements, quarterly financials, Management, Discussion & Analysis (MD&A) and forecasts/budgets to understand the company’s financial position.
   Ask yourself with the following questions:
   ~Is the company solvent?
   ~Are they complying with their loan covenants?
   ~What is the company’s shareholdings structure, are there Related Party Transactions, what are the outstanding commitments?
   ~What is the status of their tax and other filing requirements?
   ~Did they receive a clean audit opinion? If not, why and is there a “going concern” note disclosure?
4. Understand the basic financial concepts/principles and the various financial statements. CPA Canada has great document you can refer to: https://www.cpacanada.ca/en/business-and-accounting-resources/financial-and-non-financial-reporting/international-financial-reporting-standards-ifrs/publications/reading-financial-statements-what-do-i-need-to-know-faq
5. Understand the role of the board, of management and of the auditors in the financial reporting of a Corporation.

Getting financially literate takes time, focus and commitment.

Interested in Becoming Financially Literate? Registration is still open for Women Get On Board’s ‘Understanding Financials for Corporate Boards’ Workshop: http://bit.ly/UFWorkshop2Apr20

Don’t miss a chance to win a Free Board Planning Consultation from Women Get On Board!
Sign up for our mailing list, refer a new member, or become a Women Get On Board member before April 30th, 2016, and be entered automatically into a draw for the chance to win a free Board Planning consultation – a $500 value. Visit www.womengetonboard.ca to sign up, refer or become a member by April 30th, 2016!