Handbook of Board Governance

RICHARD LEBLANC, FCMC, CMC-AF, BSc, MBA, LLB, JD, LLM, PHD, is an award-winning teacher, professor, lawyer, management consultant, and specialist on boards of directors. He teaches corporate governance at York University, where he is director of the Graduate Program in Financial Accountability, and has taught corporate governance at Harvard University. Dr. Leblanc heads Boardexpert.com a board consultancy practice, advising boards of directors and individual directors.

• Foreword by Bonnie Lysyk, MBA, FCPA, FCA, LPA, ICD.D xixPreface xxiAbout the Editor xxv1 The Board Governance Handbook: An Introduction and Overview 1Richard W. Leblanc, FCMC, CMC-AF, BSc, MBA, LLB, JD, LLM, PhDI Hiring, Evaluating, and Dismissing the CEO 332 CEO Succession Planning 35David F. Larcker, BS, MS, PhD Brian Tayan, BA, MBA3 Incrementalism Is Not Going to Work 55Raj L. Gupta, BS, MS, MBA Dan Bigman, BFA4 Model President and CEO Position Description 63Richard W. Leblanc, FCMC, CMC-AF, BSc, MBA, LLB, JD, LLM, PhD5 Model President and CEO Annual Performance Evaluation and Incentive Compensation Policy 71Richard W. Leblanc, FCMC, CMC- AF, BSc, MBA, LLB, JD, LLM, PhD6 Board Oversight of Possible CEO Misconduct 87Richard W. Leblanc, FCMC, CMC- AF, BSc, MBA, LLB, JD, LLM, PhD7 Model CEO Succession Planning Charter 109Richard W. Leblanc, FCMC, CMC-AF, BSc, MBA, LLB, JD, LLM, PhDII Strategy and Investors 1178 The Three Dilemmas for Creating a Long- Term Board 119Ariel Fromer Babcock, BA, CFA, Robert G. Eccles, SB, SB, AM, PHD Sarah Keohane Williamson, BA, MBA, CAIA, CFA9 Pension Fund Governance: Working Under Tension 151Bryan Campbell, PhD Michel Magnan, PhD, FRSC, FCPA, Auditor, FCA, ASC, CDir10 A Critique of the Investment Fund Governance Regime in Canada 163André Fok Kam, BSc, MBA, FCA11 Third Stage Corporate Governance: Investors and Companies Divided by a Common Language 183Jon Lukomnik, BA James P. Hawley, BA, MA, PhDIII Technology Governance 19512 Technology and the Corporate Board: Critical Considerations Going Forward 197Gary L. Evans, Dip CS, BA, Hons Bcomm, MBA, PhD13 Questions the Board Should Ask About Artificial Intelligence 233Timothy E. Storus, LLB, ICDD14 Artificial Intelligence Governance Standards 243Sam De Silva, LLB, BMS, MBS, DBA, FCIPS, CITP, FBCS, FRSA Barbara Zapisetskaya, BA, LLB15 Fair Warning Has Been Given: What Do Directors Need to Do Now to Respond to Cyber Risk? 263Lloyd Komori, BA Dip IT, CDir, ACC, HRCC16 Cyber Risk from an IT Leader’s Point of View 285Michael Castro, CDir, ASC, MBA17 Cyber Legislation, Standards, and Practices: An Overview for Directors 295S. David Craig, PEng, MBA, CRISC, ICDDIV Environment, Social, and Governance 31518 Environmental, Social, and Governance Issues and the Board 317Cynthia E. Clark, BA, MA, PhD19 ESG’S Growing Pains 335Nell Minow, BA, JD20 Shareholders, Stakeholders, and Tangible and Intangible Capitals 365James E. Nevels, AB, MBA, JD, LLM21 Responsible Boards for a Sustainable Future: Not ESG but G(ees) 383Yilmaz Argüden, BS, PhD Gizem Argüden Oskay, BSc22 Board Oversight and Climate Change: What Directors Need to Know 425Patricia A. Koval, BA, JD, MBA23 Business Reconciliation: Calls to Action #92 Board and Business Imperative 467Gary L. Evans, Dip CS, BA, Hons BComm, MBA, PhD Corinne Chappell, MEd, MEd, EdD David D. Varis, BA, MA24 CEO Political Activism: Corporate Governance and Ethical Dimensions 489John M. Holcomb, BA, MA, JD25 Business and the Social Agenda: C- suite Activism, Corporate Responsibility, Workplace Trust, and the Board’s Role 505Sally J. Curley, BA, MBA, IRC Carol Nolan Drake, BA, JD26 A CPA’s Primer on EDI: What Directors Should Know About Equity, Diversity, and Inclusion Audits 525Romi-Lee Sevel, MFAC, CPA, CA27 Making Diversity Work 535John Zinkin, BA, MSc Chris Bennett, MBA28 An Introduction to Regenerative Governance 559J. Lyn Mcdonell BA, MA, FCMC, CDirV Financial Governance 58929 Financial Literacy and Audit Committees: A Primer for Directors and Audit Committee Members 591Jason Masters, BEc, FAICD, PFIIA30 What Every Director Needs to Know About Insolvency 617Virginia Torrie, JD, LLM, PhD31 Ten Telltale Signs of Possible Fraud: A Director’s Primer 633James Hunter, FCPA, FCA32 Scary Financial Reporting Issues for Directors 643Dr. L.S. (AL) Rosen, FCA, FCMA, FCPA, CFE, CIPVI Emergency and Crisis Governance 65733 Considerations for Emergency Board Succession Planning Under the Worst-case Scenario 659Jack L. Rozdilsky, PhD34 COVID-19 and Beyond: The Persistence of Intersectionality in Management: Reflections for Management in a Post-pandemic World 681Richard Gasparini, CM, CIM, CMGR, FCMI, FSALS, FInstLM, FRSA, BA, MBA, LLM, JD, PhD35 Preparing for Governance of Complex Disasters: Social Dimensions, Knowledge Systems, and Systemic Mitigations 715Eric B. Kennedy, BKI, MSc, PhD36 Disaster Management and Risk Assessment 727David Etkin BSc, BEd, MScVII Risk Governance 73537 Risk Oversight for Directors: A Practical Guide 737Stephen J. Mallory ICDD, FCIP, CRM, BA38 Risk Governance: Leading Practice and Demographic Impacts 759Ingrid Robinson MFAc, BComm, CPA, CIA, CRMA39 Board Risk and Responsibility Under Regulatory and Criminal Law 781Norm Keith, B.A., J.D., LL.M., CRSPVIII Human Capital and Compensation Governance 80140 Winter Is Closer: The Approaching ESG and Human Capital Management Reporting Storm 803Solange Charas, BA, MBA, PhD William L. Prickett, BA, JD41 Measuring and Assessing Employee Value Added: Board Oversight of Human Capital 835Stephen F. O’Byrne, BA, MS, JD42 Missing in Action No Longer: Why Human Resources Is Integral to the Corporate Boardroom Agenda 849Jay A. Conger, BA, MBA, DBA Edward E. Lawler III, BA, PhD43 Questions Boards Should Discuss Before Adding or Modifying ESG Goals in Executive Incentives 863Patrice Gélinas, ASA, CFA, BSc, MBA, PhD44 Measuring and Improving Pay for Performance: Board Oversight of Executive Pay 873Stephen F. O’Byrne, BA, MS, JD45 Lawyers’ Advice to Directors on Overseeing Executive Pay 901Howard Levitt, BA, JD Alyson Lee, BSc, MSc, JD46 The Effective Compensation Committee 917Steven E. Hall, BA, MBAIX Legal, Ethical, and Conduct Governance 94547 Model Individual Director Position Description 947Richard W. Leblanc, FCMC, CMC-AF, BSc, MBA, LLB, JD, LLM, PhD48 Fifty Question Areas When Conducting a Governance Audit or Investigation 953Richard W. Leblanc, FCMC, CMC-AF, BSc, MBA, LLB, JD, LLM, PhD49 Model Director Code of Conduct and Conflict of Interest Policy 983Richard W. Leblanc, FCMC, CMC-AF, BSc, MBA, LLB, JD, LLM, PhD50 A Board’s Responsibility for Enterprise Risk and Cultural Oversight: A Closer Look at Chiberl Health 997Sally J. Curley, BA, MBA, IRC CEO, Curley Global IR, Llc (cgir) Carol Nolan Drake, BA, JDX Board Leadership 101151 The Changing Nature of the Board Chair’s Role 1013Parmi Natesan, BCom, BCom Hons, CA(SA), CD(SA) Prieur Du Plessis, BSc, BHons, MBA, IDP, CD(SA), DBA52 Model Chair of the Board Position Description 1025Richard W. Leblanc, FCMC, CMC-AF, BSc, MBA, LLB, JD, LLM, PhD53 Model Committee Chair Position Description 1033Richard W. Leblanc, FCMC, CMC-AF, BSc, MBA, LLB, JD, LLM, PhD54 Model Board of Directors’ Guidelines 1039Richard W. Leblanc, FCMC, CMC-AF, BSc, MBA, LLB, JD, LLM, PhD55 Mission-critical Checklists for Directors 1049Michael Useem, BS, MA, PhD56 Model Guidelines for In-camera and Closed Sessions of the Board of Directors and Committees of the Board 1059Richard W. Leblanc, FCMC, CMC-AF, BSc, MBA, LLB, JD, LLM, PhD57 Model Board of Directors Virtual and Hybrid Meeting and Work from Home Policy 1067Richard W. Leblanc, FCMC, CMC-AF, BSc, MBA, LLB, JD, LLM, PhD58 Asking Good Questions as a Director 1079J. Lyn Mcdonell, BA, MA, FCMC, CDirXI Board Structure, Composition, and Effectiveness 109959 Re- empowering the Control Function of Boards 1101Marie- Soleil Tremblay, BAA, MBA, PhD, FCPA, FCA Bertrand Malsch, MBA, MSc, LLB, BCL, PhD60 Administering a Director Competency and Attribute Matrix 1113Richard W. Leblanc, FCMC, CMC- AF, BSc, MBA, LLB, JD, LLM, PhD61 Wisdom and the Board: Seeking and Developing Wise Leadership 1123Chris Anstead, BA, MA, PhD, CDir62 Model Director Orientation Policy 1141Richard W. Leblanc, FCMC, CMC-AF, BSc, MBA, LLB, JD, LLM, PhD63 Model Director Education Policy 1149Richard W. Leblanc, FCMC, CMC-AF, BSc, MBA, LLB, JD, LLM, PhD64 Understanding Groupthink to Manage Teamwork Effectively Within Boards of Directors 1155Sylvie St- Onge, BAA, MSc, PhD, ASC, CRHA Distinction Fellow65 Groupthink and Its Impact on Board Work 1177Sue Owen, HBSc, MHSc, CHE66 The Seasons of a Director’s Effectiveness 1187Jill Brown, BA, PhD, Ann Mooney Murphy, BS, MBA, PhD Andrew Ward, BSc, MBA, PhDXII Not-for-profit, Private, and State-owned Enterprise Governance 121367 A Primer on Charitable and Not-for-profit Organization Governance 1215Donald J. Bourgeois, BA (Hons), LLB68 Some Observations on the Governance Challenges of Boards of Directors of Small Not- for- profit Organizations 1233Suzie O’Bomsawin, MBA, ASC Stéphane Rousseau, LLM, SJD, AdE69 The Best of Boards, The Worst of Boards: The Not-for-profit Experience 1247Adam Quinton, BA, MA, MBA70 Model Fundraising Practices for Not- for- profit Boards of Directors 1267Stephanie Cory, CAP®, CFRE, CFRE, BS, MS, MEd71 Advice for Current and Prospective Directors of Start- ups and Early- stage Companies 1283Steve Chan, BA, MA, MBA Adam T. Humann, BA, JD72 Data Protection and the Cost of Compliance: The Reality of Small and Medium- sized Enterprises 1291Talles Vianna Brugni, BSc, BBA, MBA, MSc, PhD Flávia De Oliveira Rapozo, MSc73 The ABCs (Agencies, Boards, and Committees) of Government 1299David Tsubouchi, BA, JD, LLD, DSLitt, CDirXIII International Corporate Governance 131574 External and Internal Corporate Governance Mechanisms in Emerging Markets 1317Natalie Tershakowec, BCom, JD75 Making the Most of Board Evaluations: An Overview of Board Evaluation Practices in the U.S. and Globally 1331Anthony Goodman, MA Sarah E. Oliva, BA, MBA76 Evaluations That Enhance Board Effectiveness 1345Richard Fields, BA, JD77 Cross- border Corporate Governance 1365Hari Panday, FCGA, FCPA, ICD.D, NACD.DC78 ESG Disclosure by Privately Held Companies: Learning from a Case Study of a Brazilian Joint Venture 1395Talles Vianna Brugni, BSc, BBA, MBA, MSc, PhD Christiane Carvalho Veloso, mmVania Maria Da Costa Borgerth, MSc, MBA, PhD Juliana Costa Ribeiro Prates, BSc, MSc Valcemiro Nossa, PhD79 The Russian Corporate Governance Story 1411Alexander A. Filatov PhDConclusion 1433Richard W. Leblanc, FCMC, CMC-AF, BSc, MBA, LLB, JD, LLM, PhDIndex 1435