The Handbook of Board Governance A Comprehensive Guide for Public, Private, and Not-for-Profit Board Members

The revised new edition of the must-read guide for executives—provides comprehensive coverage of topics in corporate governance by leading subject-matter experts

The Handbook of Board Governance is the marketing-leading text on public, nonprofit, and private board governance. Providing comprehensive, in-depth coverage, this unique text represents a collaboration of internationally-recognized academics and prominent organization directors, executives, managers, and advisors. Contributors include Ariel Fromer Babcock, Robert Eccles, Alice Korngold, Ellie Mulholland, Michael Useem, Elizabeth Valentine and John Zinkin. Practical, expert guidance enables readers to understand value creation and the strategic role of the board, risk governance and oversight, audit and compensation committee effectiveness, CEO succession planning, and other diverse board duties and responsibilities.

Now in its second edition, the Handbook offers substantial updates and revisions reflecting contemporary trends, practices, and developments in board governance. New content includes discussions of pressing issues related to climate change, examination of information technology and cybersecurity challenges, and recent tax legislation that will impact executive compensation. Editor Dr. Richard Leblanc—an award-winning teacher, professor, lawyer, management consultant, and specialist on boards of directors—integrates practical experience and academic rigor to assist readers:

• Build and strengthen engaged and collaborative leadership in the boardroom
• Recognize the role and responsibilities of a well-functioning governing board
• Risk governance, assurance, and the duties of directors
• Keep pace with new trends in board governance and shareholder responsibility
• Measure performance and align performance measurement to executive pay
• Understand information technology governance, sustainability governance, and the different forms of governance

Highly relevant to board and committee members regardless of sector or industry, The Handbook of Board Governance, 2^nd Edition is an invaluable source of knowledge on all aspects of corporate and organization governance.

RICHARD LEBLANC, PHD, is an award-winning teacher, professor, lawyer, management consultant, and specialist on boards of directors. He teaches corporate governance in the Master of Financial Accountability Program at York University, and at Harvard University. He is a frequent speaker and webinar presenter to corporations and organizations such as The Directors College, the Ontario Hospital Association, the Chartered Professional Accountants of Ontario, and others in the United States, Europe, and Canada. He heads Boardexpert.com Inc., a board consultancy practice, advising boards of directors and individual directors. He blogs regularly for his LinkedIn Group, Boards & Advisors, and is often quoted or a guest in the media.

Foreword by John F. Bankes li

Preface liii

About the Editor lvii

1 The Handbook of Board Governance: An Introduction and Overview 1
Richard Leblanc

I The Board’s First Responsibility: The Right CEO 43

2 CEO Succession Planning Trends and Forecast 45
Gary Larkin

3 CEO Succession Planning 58
David F. Larcker and Brian Tayan

4 CEO Succession: Lessons from the Trenches for Directors 77
Mark B. Nadler

Appendix 1 Model CEO Succession Planning Charter 98
Richard Leblanc

Appendix 2 Model CEO Position Description 105
Richard Leblanc

II The Board’s Second Responsibility: The Right Board Chair 111

5 The Nonexecutive Chairman: Toward a Shareholder Value Maximization Role 113
Henry D. Wolfe

6 Great Boards Don’t Exist Without Great Chairs 148
Elizabeth Watson and Heather Kelsall

7 What’s in a Name? The Lead Director Role at U.S. Public Companies 164
Richard Fields and Anthony Goodman

Appendix 3 Model Board Chair Position Description 192
Richard Leblanc

III Who is at the Board Table? Board Composition, Dynamics, and Decision-Making 197

8 Director Independence, Competency, and Behavior 199
Richard Leblanc

9 Board Behaviors: How Women Directors Influence Decision Outcomes 233
Dr. Mary Halton

10 The State of Gender Diversity in Boardrooms 253
Dr. Nancy Gianni Herbert

11 Every Seat Matters 269
Annie Tobias and Lina Pallotta

12 The Art of Asking Questions as a Director 283
J. Lyn McDonell

13 Board Succession, Evaluation, and Recruitment: A Global Perspective 301
Jakob Stengel

Appendix 4 Model Individual Director Position Description 319
Richard Leblanc

Appendix 5 Model Conflict of Interest Policy for Directors 323
Richard Leblanc

IV The Work of the Board 333

A. Climate governance 333

14 Climate Change and Directors’ Duties: Closing the Gap Between Legal Obligation and Enforcement Practice 335
Ellie Mulholland, Sarah Barker, Cynthia Williams, and Robert G. Eccles

15 Board Oversight and Climate Change: What Directors Need to Know 369
Patricia A. Koval

16 Responsible Boards for a Sustainable Future 398
Dr. Yilmaz Argüden

17 Corporate Governance to Advance Business and Society 434
Alice Korngold

B. Technology Governance 467

18 Technology and the Corporate Board 2020 and Beyond 469
Dr. Gary L. Evans

19 Responsive Governance in a Digital World: The Need to Up-Skill 492
Dr. Elizabeth Valentine, Dr. Steven De Haes, and Dr. Anant Joshi

20 The Impact of Blockchain Technology for Corporate Governance 526
Jack J. Bensimon

21 Blockchain: An Introduction for Boards of Directors 556
Dr. Elizabeth Valentine, Dr. Greg Timbrell, Lachlan Feeney, and Dr. John Puttick

22 Reflections of a Board Chair on the Christchurch Massacre: Governing Social Media 578
Drew Stein

C. Risk and Financial Governance 595

23 Financial Literacy and Audit Committees: A Primer for Directors and Audit Committee Members 597
Jason Masters

24 Corporate Governance in an Age of Populism 624
John Zinkin

25 A Call to Action for Geopolitical Governance 641
Sean West and Rohitesh Dhawan

26 Governing Boards, Risk Management, and Deliberative Thinking 655
Michael Useem

27 Lawyers’ Advice to Directors on Overseeing Executive Pay 672
Howard Levitt and Allyson Lee

28 Accountant’s Advice to Company Directors: Directors’ Obligations to Detect Top-10 Frauds 687
Dr. L. S. (Al) Rosen

29 Ten Tell-Tale Signs ofPossible Fraud: A Director’s Primer 704
James Hunter

30 100 Questions Directors Should Ask When Assessing the Effectiveness of Risk Systems 713
F. Edward “Ted” Price

31 Risk Oversight for Directors: A Practical Guide 719
Stephen J. Mallory

32 Risk Governance: Leading Practice and Demographic Impacts 739
Ingrid Robinson

D. Strategic Governance 759

33 Agile Governance 761
Scott Koerwer and Joseph Perfetti

34 The Three Dilemmas for Creating a Long-Term Board 786
Ariel Fromer Babcock, Robert G. Eccles, and Sarah Keohane Williamson

35 Strategic Blindspots in the Boardroom 815
Estelle Métayer

E. Human Capital and Compensation Governance 839

36 Winter is Coming: The Approaching Human Capital Management Storm 841
Solange Charas and Michael Young

37 The Effective Compensation Committee 861
Steven Hall and Steven Hall Jr

38 Compensation Governance and Performance-Based Executive Compensation 889
Paul Gryglewicz

39 Measuring and Improving Pay for Performance: Board Oversight of Executive Pay 906
Stephen F. O’Byrne

40 Designing Performance for Long-Term Value: Aligning Business Strategy, Management Structure, and Incentive Design 930
Mark Van Clieaf

41 Mind the Gap: How Human Resources Can Become More Integral to the Corporate Boardroom Agenda 953
Jay A. Conger and Edward E. Lawler III

F. Legal and Governance Responsibilities of Directors 967

42 Board Risk and Responsibility Under Regulatory and Criminal Law 969
Norm Keith

43 Riding Between Cars: The Position of the Corporate Secretary 987
Douglas K. Chia

44 Ensuring Good Governance and Business Success in International Subsidiaries 1004
Thomas C. Sears

V Shareholder Engagement and Board Accountability 1021

45 The Rise of Investor Stewardship 1023
Stephen Davis

46 Director/Shareholder Meetings 1049
Stephen Erlichman

47 Dual-Class Share Firms in Developed Market Economies 1066
Anita I. Anand

48 For Directors: The Long-Term Relationship Between Directors, Companies, and Institutional Investors 1088
Carol Nolan Drake

49 Proxy Scorecards Will Empower Investors 1111
James McRitchie

VI Not-For-Profit Governance 1127

50 Charitable and Not-for-Profit Organization Governance 1129
Donald J. Bourgeois

51 The Best of Boards, the Worst of Boards: The Not-for-Profit Experience 1145
Adam Quinton

52 Fundraising Best Practices for Not-for-Profit Boards of Directors 1164
Stephanie Cory

VII Small and Medium Company Governance 1179

53 Governance of Small and Medium-Sized Entities 1181
Jo Iwasaki

54 Private Versus Public Company Governance: Top-13 Questions for Board Members to Consider 1197
Carol Nolan Drake and Sally J. Curley

55 Cannabis Governance: Advice for Current and Prospective Directors in This Emerging Industry 1220
Steve Chan

VIII Global Corporate Governance 1229

56 Cross-Border Corporate Governance 1231
Hari Panday

57 Corporate Governance in Asia-Pacific 1260
John Zinkin

58 Boards of Directors of Chinese Companies 1287
David H. Zhu, Wei’An Li, and Yaowei Zhang

59 The Russian Corporate Governance Story 1316
Alexander A. Filatov

60 CARICOM (Caribbean Community) Governance 1333
Ronaele Dathorne-Bayrd

61 King IV: Taking Corporate Governance to the Next Level 1343
Parmi Natesan and Dr. Prieur Du Plessis

Index 1363

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