Six Tips for Effective Virtual Board Meetings

by | May 18, 2020 | COVID-19, Market Trends, Meeting Effectiveness, Technology

GGA’s Advice for Virtual Board Meetings

COVID-19 has changed a lot of things: supermarket hours, the availability of toilet paper; handshakes are now elbow bumps and hand-washing is accompanied by a catchy chorus. It has also changed things for board members. While many had already started the migration to electronic materials, before the pandemic (remember those days?!), the ‘holdouts’ who still preferred (or were only offered) printed meeting materials suddenly viewed them as potentially viral infested vestiges of a bygone era! And with the influx of new affordable and flexible board technology offerings, the idea of going fully digital has been embraced. At the same time, the original board portals are showing their age with this sudden push into the ‘virtual spotlight’. Their cumbersome and expensive server resident technology is being left behind as boards begin to run board, even annual general meetings, virtually.  

Until very recently,  virtual board meetings comprised a very small percentage of board meetings. But in 2020, virtual meetings became a necessity overnight. With all that is going on, it can be challenging enough for a Board Chair to maintain in-meeting efficiency, making sure meeting agendas run smoothly, and keeping members engaged. With the immediate switch to virtual meetings, the saying “business as usual” has been replaced by the “next normal”. In order to advance to this new norm, boards need to ensure that they are utilizing the correct tools and good governance processes to optimize productivity, place crucial information at a board’s fingertips, and encourages confidential collaboration and decision making in a rapid, time efficient manner. Board meetings should continue to run as effectively and engaged as possible, despite new virtual and socially distancing formats. As a board member, you can take advantage of these opportunities for cost effective and productive virtual board meetings by using the following tips:

Tip #1: Know and Continue to Embrace Your Business’ Culture

First and foremost, review your board governance terms to ensure that virtual meetings are allowed in your organization. If virtual meetings aren’t mentioned or you are unsure, speak with your board chair or legal counsel to clarify any potential ambiguities and make adjustments, as required.

Once all is good to go, reflect on ways to ensure meetings are conducted so they are still in concordance with company culture and philosophy. It would be a good idea to take some time to review company tenants and values. Respect? Diversity? Experience? Diligence? It is easy to lose sight of the bigger picture and individuality when stakeholder interaction resides on pixels. Be sure to remain steadfast in implementing organizational culture – it will keep members motivated, reassured, and conscientious.

Tip #2: Update and Embrace Board Technology

Now more than ever – invest in the ‘right’ technology. Does your board use board software? Does it facilitate virtual meeting efficiencies and effectiveness? Is it checking all the boxes necessary for a seamless and optimal virtual meeting? Do you have live video conferencing, a secure document repository, proxy surveys, on-line voting and automated minute taking in one centralized, secure location? Are all the services you use cost efficient? If not, you are not taking advantage of what the 2020 marketplace has to offer. Far too many times boards are forced to spread themselves thin with multiple softwares and tabs open – leading to a disorganized and disheveled (likely fed up) board member. This also means a less productive and motivated board member – which defeats the purpose of using board management software as it is expected to assist meeting preparation and facilitation, not hinder it. Your software needs to be a central location for all board tasks, easy to navigate, with internal communication features that keep board members connected!

Furthermore, virtual members must be able to see and hear other members. Yep – this means no muting the audio or turning off the video feature. Using the camera and microphone is not only essential to optimizing the virtual experience and keeping others engaged, it is the best way to communicate. 55% of communication is body language and another 38% is tone of voice. That’s a whopping 88% of communication! We all know communication is key – so be sure to have both efficient video cameras and microphones embedded into your technology.

Tip #3: Know Your Virtual Meeting Etiquette

It is spring 2020 and for those familiar with COVID-19 will likely be familiar with the popularity of trending web-cam mishaps as professionals take to work in pajamas, undergarments, or half asleep, underestimating the cameras range and unaware they are ‘sharing’ the experience via live video conference.  

Yes even board members may need to be reminded to approach virtual meetings with the same respect, preparedness and professionalism as you would in-person board meetings. Meeting time is meant for collaboration, productivity, and attentiveness so losing yourself in the abundance of distractions such as emails, web surfing, texting, or afternoon snacks, is not acceptable. It is not only an egregious waste of valuable time; it is also disrespectful to your fellow board members who are actively participating. Join the virtual meeting prepared by reading necessary pre-meeting notes, mute your phone, speak as clearly as possible, keep movements to a minimal, and hold a standard of discipline just as in any other board meeting.

Tip #4: Make the Meeting Feel Comfortable and ‘Normal’

As with face-to-face meetings, if all members make an effort to stay focused; actively participating, actively listening, and sharing insight during the meeting it will reinforce the feeling that this is a ‘normal’ board meeting. It is of utmost importance that there is a mutual sense of respect and that everyone feels heard even though you’re not in the same physical room. This means don’t shy away from small talk, humor, and ‘virtual’ bonding – embrace it. But exercise this in a way that doesn’t derail the flow and progress of a meeting. And just a reminder (as we are sure the lines get blurred with digitized work environments): we are human, not robots!

The “attendance” sheet should show on the meeting screen so that everyone can see who’s present and accounted for. Ideally, utilize a ‘gallery view’ in your electronic meeting software so that you are able to see body language and ‘make eye contact’ (ish). This will encourage conversation and collaboration and is essential to productivity.

In virtual meetings, it is helpful to try to address fellow board members by name if you are addressing them directly, as they can’t tell necessarily tell who you are speaking to. The Chair has to pay extra attention that quieter individuals are heard and that their ideas don’t fall through the cracks! Even if you’re relatively new to virtual meetings, watch and learn from your colleagues. Give feedback to your Board Chair if you feel that there’s a better way to run some aspect of the meeting. Some board software, for example, offer a ‘hand-raising’ function. If there is too much ‘over-talk’ in your opinion, you could ask the Chair to request that members utilize this function. You are on a board because your insight is valued – find the best way to share it!

Tip 5: Optimize Your Virtual Meeting Efficiency and Effectiveness

Virtual or not, everyone wants to feel like they have contributed to the efficiency and effectiveness of the board meeting. These approaches help to ensure this in a virtual environment:

  1. Attention spans can be a bit tougher to manage in a virtual meeting. To mitigate this, keep important agenda items at the beginning when members are most attentive. Agenda items are most productive when concise but conversational, focusing on essential points with regular conversation throughout,
  2. Similarly, the flatter feeling of a virtual meeting may need additional structure or prompts to keep it moving and feeling “alive”. Assign estimated time to the agenda items to communicate the expectation and assist the Chairperson in facilitating the meeting efficiently. Use your board platform tools (if available) to assist with this and provide audible prompts when an item is running over,
  3. Exploit the advantages of the virtual aspect of the meeting. For example, take advantage of the ability to screen share videos and images that were not necessarily easy to incorporate into face-to-face board meetings. Or have ‘experts’ on stand-by to be ‘Zoomed’ in, as required, without having them sitting in a physical waiting room for long periods of time, etc.,
  4. Create/suggest some new meeting norms/processes to enhance the virtual experience. For example, you could have a 15 minute ‘arrival’ period in advance of the call to order to allow for the casual and more personal ‘how are you’s’ that are missing from not being in the same room. This personal ‘verbal’ connection is even more important when you are physically distanced from each other, and finally,
  5. Set up your ‘meeting space’ to maximize your meeting experience and that of your fellow board members. Ensure that you have a good quality microphone and video camera either within or as adjunct to your computer. Test your Wi-Fi and bandwidth ahead of time to ensure that you can stream the meeting without delays or freezing. And make sure that you are in a quiet space so that your peers do not have to listen to distracting sounds from your environment.

Tip 6: Contribute to Enhancing the Virtual Board Meeting Experience

Share feedback with the Chair on the meeting process and outcomes. This should be both informally through post-meeting comments, and formally through additional questions on the annual board assessment. Utilize the tools within the board platform to share ideas, opportunities for improvement to learn and enhance future meetings.

Closing Thoughts

While, like handshakes, many of us look forward to a return to face-to-face board meetings, it’s obvious that the practice of holding at least some ‘virtual meetings’ is here to stay. The foregoing tips should help to make that reality a positive experience for you as we move to our ‘next normal’. To learn more about technologies that can further enhance the remote board member experience with state-of-the art, affordable technology tools, click here to view an overview of GGA’s emPower platform.

Contributing Authors:

Arden Dalik, Senior Partner
Aamani Mohamed

2020 Executive Compensation Amid Market Uncertainty

by | Mar 30, 2020 | Executive Compensation, Market Trends

Effects of COVID-19 on Executive Compensation

With a global pandemic upon us, the world is a very different place, at least right now. However, just like there is no need to hoard cans of tuna and cases of toilet paper, we at GGA believe that it is not advisable at this juncture, to call off your organization’s executive compensation program plans for 2020. In fact, it is times like these that corporate governance, risk management, technology and innovation and board oversight are imperative to preserving shareholder value, while also and most importantly ensuring the health and safety of our employees. 

What we know from other market crises, is that corporate governance and executive retention are high on the list when navigating black-swan events.  If there ever was a black-swan event, COVID-19 may have now assumed the definition. 

We suggest that as long as the Board and/or the CEO maintains the ability to use their judgment on implementation timing, eligibility, etc., for example, then plans should proceed. There are obvious exceptions to this where an organization may not have the available cash flow due to this ‘black swan’ event (e.g. airlines, tourism companies, etc.).

In the interest of brevity, this piece is meant to cover only high level corporate governance and retaining key talent, but we understand that there are broader considerations when factoring in an organization’s complete workforce as many companies may have to layoff some of their staff due to decreased demand for their products/services and the corresponding decrease in cash flow for the business (as we write this a number of immediate family members and friends have already been impacted directly). While we cannot predict the future, we at GGA can share our observations within the marketplace and areas for consideration as boards make decisions over the next few months relating to corporate governance and executive compensation. So far, within the mining and broader commodity businesses, we have seen some proposed delays in work or a cautious movement forward, as planned. 

Areas for consideration during these difficult times include:

Board Oversight

Businesses are continuing to try to make the best of a bad situation and effective corporate governance needs to continue, within reason, in the same spirit, to ensure effective oversight of the organization. How easily is your board able to meet remotely as opposed to in-person? What decisions can be made via consent resolutions versus requiring a full meeting? Have you stress tested the impact of black swan events on your company’s operations? What plan do you have in place to deal with black swan events in a crisis and who is responsible for what?

Retention of Key Talent

Strategies for attraction and retention of executive talent are critical as even in immediately affected companies, the demands on executive teams are typically extremely high, more so than in normal market conditions, to chart out a path forward. If your board has observed a gap to market from a pay perspective, how are you going to let your executive team know that you recognize this gap, but also are taking into account the current market conditions? Some organizations will choose to “stay the course” and implement any compensation adjustments that were determined at the past meeting. Others may choose a more conservative route and announce salary freezes or even rollbacks, depending on the cash flow concerns of the business. A good middle ground might be to approve compensation adjustments in principle but hold off on formally enacting the adjustments for a few months until market conditions have stabilized and better financial projections can be made. In terms of Long-Term Incentive (LTIP) grants, previous grants may have been made at significantly higher share prices so you must also consider what value, if any, executives still have within their LTIP and what the prospects are for this value to rise over the next few months or even years. If you are only granting Stock Options, is there a chance for underwater options to get back in-the-money or is the probability low? If the probability is low, then executives are a flight risk as competitors will be able to offer them new LTIP grants at significantly lower exercise prices than if they stay with your organization. This may necessitate discussion on the need for new retention grants which can be made at a lower share price and increase the likelihood of long-term value to executives, thus acting as a retention device during this period.

Retention Strategy

While retention LTIP awards seem like a good idea in the current environment, these awards must be balanced with the equity dilution level of the organization under its existing equity compensation plans. At lower share prices, the level of equity dilution can increase dramatically and use up much needed room for LTIP grants in the future. In a time like this, stress testing of the impact on equity dilution levels of proposed grants is an important step that boards must conduct before approving regular or retention-based LTIP grants. If proposed grants are too dilutive then consideration of a fixed number of options or units to be granted, that will allow an organization to retain room for future grants, is something that should be considered in the interim until market conditions stabilize. For many organizations, dilution will also not support additional retention awards, so a board may need to consider a performance cash based award, that is granted outside of the shareholder approved equity plan. At all costs, while option surrender programs continue to be allowed by the regulator, categorically shareholder advisory firms consider this an option re-pricing problematic pay practice.

Performance Evaluation

If performance expectations under the Annual Balanced Scorecard have already been approved, the Board should evaluate the performance expectations set and determine whether those expectations are still reasonable in the ever-evolving environment. If expectations are now deemed to be unreasonable in the Board’s view, consideration of revised performance targets based on the new reality should be discussed to ensure executives are still motivated to achieve important objectives over the remainder of the year.

Remember that while retaining key talent is imperative and in shareholders long-term interests, the board must also give consideration to the shareholders who have potentially lost material amounts of their portfolio.  These executives are tasked with not only mitigating the financial blow in the downward market, but also to generate value when markets return.  Ensure your board is not making compensation decisions in a vacuum during these challenging times.  Seek the independent support necessary to give appropriate back testing and scenario analysis prior to making any potential retention decisions.
 

Contributing Authors:

Paul Gryglewicz, Senior Partner
Arden Dalik, Senior Partner
Peter Landers, Partner

Women CEOs in Top BC Firms: GGA’s Arden Dalik Featured in Business In Vancouver Magazine

by | Jul 24, 2015 | Board Dynamics, Diversity, Governance, Leadership, Media

GGA’s Senior Partner Arden Dalik is featured in the latest Business In Vancouver magazine, where she provides her commentary on the latest findings on the number of women CEOs in BC’s top firms. .

As Arden states, “‘the CEO is still a position where we are really lagging behind, obviously, versus the demographics of the population …'”

That said, she points to the growing number of women in senior executive roles as an indication that things have been changing over the last 10 years.

“One of the top positions in Eldorado Gold is occupied by a very strong, very capable woman,” she said. “They also have a woman on their board now in a very technical, male-dominated industry.”

You can read the full piece, authored by Nelson Bennett, here.

GGA’s Second Annual Pay for Performance Survey With The Calgary Herald

by | Jun 16, 2015 | Executive Compensation, Governance, Media, Survey

GGA’s second annual pay for performance survey for the Calgary Herald, looking at executive pay among the top 5 earners in Calgary’s Top 100 companies, is now out.

As GGA’s Managing Partner for Western Canada Arden Dalik said in her op ed this year, “What a difference a year makes. This year, the ‘C’ in C-suite could stand for ‘cut, control and contain’ at most Calgary companies.”

The results we report paint a nuanced picture of how the energy sector is adapting to the rapid changes in market value for the price of oil.

You can read the full summary and view our online graphics with the Herald here.

You can read Arden’s op ed here.

You can also read Herald Business Reporter Dan Healing’s piece on this year’s survey here.

GGA’s Arden Dalik Speaks on Executive Pay with BC’s Top Public Firms

by | May 11, 2015 | Executive Compensation, Governance, Media, Mining

Arden Dalik, GGA’s Managing Partner for Western Canada provided her expert perspective and commentary on executive compensation to Business In Vancouver reporter Nelson Bennett. Bennett’s piece focused on BC’s top publicly traded companies and the linkage – or lack of it – between share prices, profits and executive compensation this year.

Dalik explained the context for some of the higher earnings among CEOs in the mining sector:

“To hold those people through this long investment period is a real challenge, and the market views it that way,” Dalik said. “‘Are we at risk?’ is a question they have to ask of losing that person. They have to weigh that because … these questions are going to come up: ‘How is it going to look to shareholders? Well, it’s going to look worse if we lose them – and he’s a key resource going out the door.’”

If shareholders think mining company CEOs are overpaid, they should take a look at what Hollywood pays the CEOs of film and TV companies. David Zaslav, CEO of Discovery Channel, received US$156 million in 2014. His pay was skewed by a long-term contract signing bonus. He made US$33 million in 2013.

“What we call the talent industry – the athletes and Hollywood – they are unique industries unto themselves, so you really cannot compare them to anyone else,” Dalik said. “It’s just its own market unto itself.”

You can read the full piece with Dalik’s commentary here.