The Handbook of Board Governance

Foreword by Bonnie Lysyk, MBA, FCPA, FCA, LPA, ICD.D xix Preface xxi About the Editor xxv 1 The Board Governance Handbook: An Introduction and Overview 1 Richard W. Leblanc, FCMC, CMC-AF, BSc, MBA, LLB, JD, LLM, PhD I Hiring, Evaluating, and Dismissing the CEO 33 2 CEO Succession Planning 35 David F. Larcker, BS, MS, PhD Brian Tayan, BA, MBA 3 Incrementalism Is Not Going to Work 55 Raj L. Gupta, BS, MS, MBA Dan Bigman, BFA 4 Model President and CEO Position Description 63 Richard W. Leblanc, FCMC, CMC-AF, BSc, MBA, LLB, JD, LLM, PhD 5 Model President and CEO Annual Performance Evaluation and Incentive Compensation Policy 71 Richard W. Leblanc, FCMC, CMC- AF, BSc, MBA, LLB, JD, LLM, PhD 6 Board Oversight of Possible CEO Misconduct 87 Richard W. Leblanc, FCMC, CMC- AF, BSc, MBA, LLB, JD, LLM, PhD 7 Model CEO Succession Planning Charter 109 Richard W. Leblanc, FCMC, CMC-AF, BSc, MBA, LLB, JD, LLM, PhD II Strategy and Investors 117 8 The Three Dilemmas for Creating a Long- Term Board 119 Ariel Fromer Babcock, BA, CFA, Robert G. Eccles, SB, SB, AM, PHD Sarah Keohane Williamson, BA, MBA, CAIA, CFA 9 Pension Fund Governance: Working Under Tension 151 Bryan Campbell, PhD Michel Magnan, PhD, FRSC, FCPA, Auditor, FCA, ASC, CDir 10 A Critique of the Investment Fund Governance Regime in Canada 163 André Fok Kam, BSc, MBA, FCA 11 Third Stage Corporate Governance: Investors and Companies Divided by a Common Language 183 Jon Lukomnik, BA James P. Hawley, BA, MA, PhD III Technology Governance 195 12 Technology and the Corporate Board: Critical Considerations Going Forward 197 Gary L. Evans, Dip CS, BA, Hons Bcomm, MBA, PhD 13 Questions the Board Should Ask About Artificial Intelligence 233 Timothy E. Storus, LLB, ICDD 14 Artificial Intelligence Governance Standards 243 Sam De Silva, LLB, BMS, MBS, DBA, FCIPS, CITP, FBCS, FRSA Barbara Zapisetskaya, BA, LLB 15 Fair Warning Has Been Given: What Do Directors Need to Do Now to Respond to Cyber Risk? 263 Lloyd Komori, BA Dip IT, CDir, ACC, HRCC 16 Cyber Risk from an IT Leader’s Point of View 285 Michael Castro, CDir, ASC, MBA 17 Cyber Legislation, Standards, and Practices: An Overview for Directors 295 S. David Craig, PEng, MBA, CRISC, ICDD IV Environment, Social, and Governance 315 18 Environmental, Social, and Governance Issues and the Board 317 Cynthia E. Clark, BA, MA, PhD 19 ESG’S Growing Pains 335 Nell Minow, BA, JD 20 Shareholders, Stakeholders, and Tangible and Intangible Capitals 365 James E. Nevels, AB, MBA, JD, LLM 21 Responsible Boards for a Sustainable Future: Not ESG but G(ees) 383 Yilmaz Argüden, BS, PhD Gizem Argüden Oskay, BSc 22 Board Oversight and Climate Change: What Directors Need to Know 425 Patricia A. Koval, BA, JD, MBA 23 Business Reconciliation: Calls to Action #92 Board and Business Imperative 467 Gary L. Evans, Dip CS, BA, Hons BComm, MBA, PhD Corinne Chappell, MEd, MEd, EdD David D. Varis, BA, MA 24 CEO Political Activism: Corporate Governance and Ethical Dimensions 489 John M. Holcomb, BA, MA, JD 25 Business and the Social Agenda: C- suite Activism, Corporate Responsibility, Workplace Trust, and the Board’s Role 505 Sally J. Curley, BA, MBA, IRC Carol Nolan Drake, BA, JD 26 A CPA’s Primer on EDI: What Directors Should Know About Equity, Diversity, and Inclusion Audits 525 Romi-Lee Sevel, MFAC, CPA, CA 27 Making Diversity Work 535 John Zinkin, BA, MSc Chris Bennett, MBA 28 An Introduction to Regenerative Governance 559 J. Lyn Mcdonell BA, MA, FCMC, CDir V Financial Governance 589 29 Financial Literacy and Audit Committees: A Primer for Directors and Audit Committee Members 591 Jason Masters, BEc, FAICD, PFIIA 30 What Every Director Needs to Know About Insolvency 617 Virginia Torrie, JD, LLM, PhD 31 Ten Telltale Signs of Possible Fraud: A Director’s Primer 633 James Hunter, FCPA, FCA 32 Scary Financial Reporting Issues for Directors 643 Dr. L.S. (AL) Rosen, FCA, FCMA, FCPA, CFE, CIP VI Emergency and Crisis Governance 657 33 Considerations for Emergency Board Succession Planning Under the Worst-case Scenario 659 Jack L. Rozdilsky, PhD 34 COVID-19 and Beyond: The Persistence of Intersectionality in Management: Reflections for Management in a Post-pandemic World 681 Richard Gasparini, CM, CIM, CMGR, FCMI, FSALS, FInstLM, FRSA, BA, MBA, LLM, JD, PhD 35 Preparing for Governance of Complex Disasters: Social Dimensions, Knowledge Systems, and Systemic Mitigations 715 Eric B. Kennedy, BKI, MSc, PhD 36 Disaster Management and Risk Assessment 727 David Etkin BSc, BEd, MSc VII Risk Governance 735 37 Risk Oversight for Directors: A Practical Guide 737 Stephen J. Mallory ICDD, FCIP, CRM, BA 38 Risk Governance: Leading Practice and Demographic Impacts 759 Ingrid Robinson MFAc, BComm, CPA, CIA, CRMA 39 Board Risk and Responsibility Under Regulatory and Criminal Law 781 Norm Keith, B.A., J.D., LL.M., CRSP VIII Human Capital and Compensation Governance 801 40 Winter Is Closer: The Approaching ESG and Human Capital Management Reporting Storm 803 Solange Charas, BA, MBA, PhD William L. Prickett, BA, JD 41 Measuring and Assessing Employee Value Added: Board Oversight of Human Capital 835 Stephen F. O’Byrne, BA, MS, JD 42 Missing in Action No Longer: Why Human Resources Is Integral to the Corporate Boardroom Agenda 849 Jay A. Conger, BA, MBA, DBA Edward E. Lawler III, BA, PhD 43 Questions Boards Should Discuss Before Adding or Modifying ESG Goals in Executive Incentives 863 Patrice Gélinas, ASA, CFA, BSc, MBA, PhD 44 Measuring and Improving Pay for Performance: Board Oversight of Executive Pay 873 Stephen F. O’Byrne, BA, MS, JD 45 Lawyers’ Advice to Directors on Overseeing Executive Pay 901 Howard Levitt, BA, JD Alyson Lee, BSc, MSc, JD 46 The Effective Compensation Committee 917 Steven E. Hall, BA, MBA IX Legal, Ethical, and Conduct Governance 945 47 Model Individual Director Position Description 947 Richard W. Leblanc, FCMC, CMC-AF, BSc, MBA, LLB, JD, LLM, PhD 48 Fifty Question Areas When Conducting a Governance Audit or Investigation 953 Richard W. Leblanc, FCMC, CMC-AF, BSc, MBA, LLB, JD, LLM, PhD 49 Model Director Code of Conduct and Conflict of Interest Policy 983 Richard W. Leblanc, FCMC, CMC-AF, BSc, MBA, LLB, JD, LLM, PhD 50 A Board’s Responsibility for Enterprise Risk and Cultural Oversight: A Closer Look at Chiberl Health 997 Sally J. Curley, BA, MBA, IRC CEO, Curley Global IR, Llc (cgir) Carol Nolan Drake, BA, JD X Board Leadership 1011 51 The Changing Nature of the Board Chair’s Role 1013 Parmi Natesan, BCom, BCom Hons, CA(SA), CD(SA) Prieur Du Plessis, BSc, BHons, MBA, IDP, CD(SA), DBA 52 Model Chair of the Board Position Description 1025 Richard W. Leblanc, FCMC, CMC-AF, BSc, MBA, LLB, JD, LLM, PhD 53 Model Committee Chair Position Description 1033 Richard W. Leblanc, FCMC, CMC-AF, BSc, MBA, LLB, JD, LLM, PhD 54 Model Board of Directors’ Guidelines 1039 Richard W. Leblanc, FCMC, CMC-AF, BSc, MBA, LLB, JD, LLM, PhD 55 Mission-critical Checklists for Directors 1049 Michael Useem, BS, MA, PhD 56 Model Guidelines for In-camera and Closed Sessions of the Board of Directors and Committees of the Board 1059 Richard W. Leblanc, FCMC, CMC-AF, BSc, MBA, LLB, JD, LLM, PhD 57 Model Board of Directors Virtual and Hybrid Meeting and Work from Home Policy 1067 Richard W. Leblanc, FCMC, CMC-AF, BSc, MBA, LLB, JD, LLM, PhD 58 Asking Good Questions as a Director 1079 J. Lyn Mcdonell, BA, MA, FCMC, CDir XI Board Structure, Composition, and Effectiveness 1099 59 Re- empowering the Control Function of Boards 1101 Marie- Soleil Tremblay, BAA, MBA, PhD, FCPA, FCA Bertrand Malsch, MBA, MSc, LLB, BCL, PhD 60 Administering a Director Competency and Attribute Matrix 1113 Richard W. Leblanc, FCMC, CMC- AF, BSc, MBA, LLB, JD, LLM, PhD 61 Wisdom and the Board: Seeking and Developing Wise Leadership 1123 Chris Anstead, BA, MA, PhD, CDir 62 Model Director Orientation Policy 1141 Richard W. Leblanc, FCMC, CMC-AF, BSc, MBA, LLB, JD, LLM, PhD 63 Model Director Education Policy 1149 Richard W. Leblanc, FCMC, CMC-AF, BSc, MBA, LLB, JD, LLM, PhD 64 Understanding Groupthink to Manage Teamwork Effectively Within Boards of Directors 1155 Sylvie St- Onge, BAA, MSc, PhD, ASC, CRHA Distinction Fellow 65 Groupthink and Its Impact on Board Work 1177 Sue Owen, HBSc, MHSc, CHE 66 The Seasons of a Director’s Effectiveness 1187 Jill Brown, BA, PhD, Ann Mooney Murphy, BS, MBA, PhD Andrew Ward, BSc, MBA, PhD XII Not-for-profit, Private, and State-owned Enterprise Governance 1213 67 A Primer on Charitable and Not-for-profit Organization Governance 1215 Donald J. Bourgeois, BA (Hons), LLB 68 Some Observations on the Governance Challenges of Boards of Directors of Small Not- for- profit Organizations 1233 Suzie O’Bomsawin, MBA, ASC Stéphane Rousseau, LLM, SJD, AdE 69 The Best of Boards, The Worst of Boards: The Not-for-profit Experience 1247 Adam Quinton, BA, MA, MBA 70 Model Fundraising Practices for Not- for- profit Boards of Directors 1267 Stephanie Cory, CAP®, CFRE, CFRE, BS, MS, MEd 71 Advice for Current and Prospective Directors of Start- ups and Early- stage Companies 1283 Steve Chan, BA, MA, MBA Adam T. Humann, BA, JD 72 Data Protection and the Cost of Compliance: The Reality of Small and Medium- sized Enterprises 1291 Talles Vianna Brugni, BSc, BBA, MBA, MSc, PhD Flávia De Oliveira Rapozo, MSc 73 The ABCs (Agencies, Boards, and Committees) of Government 1299 David Tsubouchi, BA, JD, LLD, DSLitt, CDir XIII International Corporate Governance 1315 74 External and Internal Corporate Governance Mechanisms in Emerging Markets 1317 Natalie Tershakowec, BCom, JD 75 Making the Most of Board Evaluations: An Overview of Board Evaluation Practices in the U.S. and Globally 1331 Anthony Goodman, MA Sarah E. Oliva, BA, MBA 76 Evaluations That Enhance Board Effectiveness 1345 Richard Fields, BA, JD 77 Cross- border Corporate Governance 1365 Hari Panday, FCGA, FCPA, ICD.D, NACD.DC 78 ESG Disclosure by Privately Held Companies: Learning from a Case Study of a Brazilian Joint Venture 1395 Talles Vianna Brugni, BSc, BBA, MBA, MSc, PhD Christiane Carvalho Veloso, mm Vania Maria Da Costa Borgerth, MSc, MBA, PhD Juliana Costa Ribeiro Prates, BSc, MSc Valcemiro Nossa, PhD 79 The Russian Corporate Governance Story 1411 Alexander A. Filatov PhD Conclusion 1433 Richard W. Leblanc, FCMC, CMC-AF, BSc, MBA, LLB, JD, LLM, PhD Index 1435