How to Write a Motion for a Board Meeting

by | Mar 11, 2019 | Governance, Leadership, Meeting Effectiveness, Productivity

Considerations for a Well-Written Motion

It’s the holidays and you’re the chosen victim to host this year’s family dinner. Unfortunately, this dinner doesn’t get your undivided attention because your AGM happens to be right around the corner, and you have the meeting and motions to prepare for. Lucky for you, there’s a universal “recipe” that can ensure success in the kitchen and the boardroom…

A well-written English Trifle recipe is similar to a well-written board meeting motion. It’s unique, concise, specific and ensures that your family can taste the whipped cream that you infused into each individual raspberry, the same way your board members can see the hard work you put into your motion.

The Motion

Stop.

Before you read any further you must organize your thoughts. A good motion writer can easily itemize the countless innovative ideas bouncing around his or her head.

Instead of taking the long way to work before the AGM, arrive early enough to practice your motion and to jot down any additional main ideas that you want to convey. Do not forget to include the key ingredients to your motion, such as why the motion is necessary, any legal factors, and if the board is working against a deadline. A good motion writer will be well versed in the details of their motion and has mentally anticipated any potential questions or concerns.

Does your motion need funding? Be very particular about the wording you choose and the details surrounding where you recommend the funds come from. Any motions that propose funding will require a second motion to approve the allocation of funds.

While preparing, it is important to read and re-read your motion. Say it out loud. Is it clear? Does it ask your board of directors to take a specific action? Does it need a time-frame? Don’t be afraid to ask for feedback from one or two other board members, prior to the meeting.

Motion Types

Parliamentary procedure (Robert’s Rules) provides set guidelines when it comes to making motions. The following are common types of motions:

  • Main Motion – this is the “ask” motion. It requires that a board takes a specific action. It requires a second and can only be introduced if there is no other motion on the floor.
  • Subsidiary Motion – this motion changes the treatment of a main motion. For instance, a motion is introduced by one board member and another member may deem this motion sensitive in nature and introduces a subsidiary motion to go into executive session. An executive session would be used to further discuss the main motion, prior to voting on it.
  • Privileged Motion – this motion takes precedence over other motions and they are not up for debate. It is the motion that provides boards of directors the opportunity to bring up urgent matters that are typically unrelated to the business being discussed at the current meeting. They cannot be combated with a subsidiary motion, unless the board wants to adjust the time to adjourn or take a recess.
  • Incidental Motion – this motion asks for additional information on the procedures related to other motions. Incidental motions table the main motion until clarity is provided.

Examples of a Motion

Let’s look at a couple of examples. The board at a top public university has been discussing whether to renovate the kitchens in the four freshmen dorms. They haven’t been renovated in approximately 15 years and the board agrees that they need to be updated. It’s time to make a motion to renovate the kitchens.

A poorly-written board meeting motion:

I move to redo the kitchens in the four freshmen dorms.

A well-written board meeting motion:

I move to redo the kitchens in the first and second freshmen dorms in May 2019. The second phase of renovations will occur in July 2019, for the third and fourth freshmen dorms. The renovations for both phases will be funded by the board’s budget at a cost of $60,000.

The more detail the better. If you are vague and unclear you may face more amendments, and risk the modification of your original motion to an unrecognizable point.

Closing Thoughts

That completes your overview on how to effectively write a motion for a board meeting. Feel free to browse through the rest of our blog (how about checking out How to Chair a Board Meeting) for more.

GGA Celebrates 10 Years

by | Jan 28, 2019 | GGA News

An Interview with GGA’s Founder & CEO, Luis Navas

Picture this. January 2009. In the midst of an unforgiving Canadian winter – the kind of winter that creates goosebumps just by reminiscing about it – Luis Navas, family man with a 5 and 3-year-old at home, decided to take a leap of faith and officially found Global Governance Advisors (GGA). He had spent 10 years consulting at Mercer and Korn Ferry/Hay Group, becoming the firm’s youngest Partner, and finally had enough. He refused to suppress his entrepreneurial spirit any longer. His family and friends weren’t surprised by his hunger to branch out, he was born with vision and a knack for business – after all, he was only 9 years old when he bought paper routes off of his peers and hired his friends to work for him.

After finalizing his decision, Luis mortgaged his home and swiftly generated enough capital to open GGA, on the 18thfloor of a brand new 1,000 square foot luxury condo tower in the heart of Toronto. 24 months flew by and GGA outgrew that luxury condo and tripled in size. By 2014, GGA had opened offices in Calgary, Toronto, New York and South Florida, with no intention of slowing down.  I had a quick exchange with Luis last week, to commemorate GGA’s 10-year anniversary and reflect on the firm’s continuous success.

LHM: You are both the CEO and founder of GGA. What motivated you to take the risk and start your own company? Was there any significant moment that triggered the decision?

LN: Growing up I was always entrepreneurial – I started my first business when I was 9 years old. I purchased paper routes from kids and hired several of them to deliver the papers for me, under a hybrid franchise model. I did this because McDonald’s wouldn’t hire me, since I was too young to work there. Early in my life and career I was motivated by trying to have a better life financially than my parents could provide to my sister and me. My parents were wonderful people and always made sure we had a roof and food, but we were well below middle class and it was tough. I wanted more for myself, my wife and kids, and for my parents. The first thing I bought when I made some good money was a new car for my mom who always had to use the city bus to get around.

LHM: How difficult was it to obtain the financial backing needed to start GGA?

LN: It wasn’t difficult at all. I took a mortgage out on my house. Some might find that risky, but I was extremely confident in my decision. I believed I could build something very special.

LHM: In the last ten years, what has been the most memorable GGA moment for you?

LN: Definitely the time I flew all of our staff to Las Vegas for an all-inclusive, all expenses paid vacation to celebrate our 5th year anniversary. We experienced phenomenal growth during our first 5 years and I wanted to reward their hard work. I surprised our senior team with Rolex watches, with a special message from me inscribed in each watch. Our clients know that key GGA staff all wear the same Rolex watch. It’s special.

LHM: 10 years in the industry is no small feat. In your opinion, what is the most important characteristic that a CEO needs to have in order to run a successful company, like GGA?

LN: I think it’s about never giving up. No matter what. Things rarely go smoothly in business or in life. There are always roadblocks – success in business is like solving a complex puzzle – not everyone is able to do it. But if you work hard, work smart, and have a little luck, things will work out. I have also learned that one person cannot build a great business alone – you need to surround yourself with a great team.

To learn more about Luis Navas click here.

Attracting & Motivating a High Performance Executive Team (Mining)

by | Nov 12, 2018 | Board Dynamics, Governance, Leadership

An Interview with Corporate Director, Peter Gillin

Peter Gillin is a Corporate Director who currently serves on the Boards of several public companies, including: Turquoise Hill Resources Ltd., Sherritt International Corporation, Dundee Precious Metals Inc., TD Mutual Funds Corporate Class Ltd. and Wheaton Precious Metals Inc. He was a Director of HudBay Minerals, Inc., and was Vice Chair of N.M. Rothschild & Sons Canada Limited, an investment bank. Peter was President and CEO of Zemex Corporation and Chairman and CEO of Tahera Diamond Corporation.

Peter holds an HBA degree from the Richard Ivey School of Business at Western University and is a Chartered Financial Analyst. He is also a graduate of the Institute of Corporate Directors – Director Education Program at the University of Toronto Rotman School of Management and has earned the designation of ICD.D from the Institute of Corporate Directors.

Follow Peter Gillin on LinkedIn.

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GGA: What are the key factors in developing incentive plans?

Peter Gillin: Boards focus on the motivation and attraction of new executives, but a key element is also the retention of existing executives. Boards need to have a clear idea of what they want to pay for – in other words, what is the job and what are the important elements of that job for which the candidate will get compensated. And that, of course, involves the specific goals and objectives for the executives and the time horizons for accomplishing them. In any package of compensation, you must mix and match the incentives, obviously salary, plus short-term bonus (typically in cash) and then various other equity related instruments. In order to motivate people in the proper way you must offer a diverse portfolio. It’s also important to start early. Incentive plans require careful consideration, and so much of the planning is driven by specific goals, objectives, and an element of subjectivity. There needs to be time for the executives to provide input – of what they think they’ve accomplished or not. Bench-marking for senior executives is a very widespread practice, but it’s inherently inflationary and sometimes people lose sight of that fact. All in all, you determine what you want to pay for, how you’re going to pay for it and then you compare that to the rest of the world to see if it’s fair.

GGA: What about the considerations needed when building effective incentive plans, specifically within the mining space?

Gillin: In my experience, the greatest single difficulty in formulating any of these plans, in the mining space, is the movement of commodity prices and whether that creates a financial windfall or financial penalty. Ideally you want to have your compensation system designed to operate exclusive of the performance of the company itself because the companies have absolutely no control over that. You cannot forget to factor in the alignment with the shareholders. They suffer when the commodity prices decline, and they are happy as clams when prices increase. What you want to avoid is generously awarding executives when things are bad – that doesn’t sit well with the shareholders. Usually, senior executives have substantial equity awards, and when you compensate them there is an expectation that they have done a first-class job – met all of their objectives and goals (in terms of production).

GGA: You mentioned equity awards. As of late, equity has become obviously more complicated. How do approach equity awards?

Gillin: Well. Cash is the really the easiest approach. As you know, equity participation incentives for executives are of utmost importance and performance share units around the ascendancy options are on the decline. Interestingly, there’s a difference between Canada and the United States and the utilization of those more so in Canada than the U.S. In fact, the mining industry tends to utilize them a great deal more than other industries, particularly smaller mining companies. But, as I said, when things get complicated cash becomes king.

GGA: What about technology? Do your boards use any when developing incentive plans?

Gillin: Absolutely. There is a new trend of incorporating board management software into the executive compensation planning process. One of my companies, in particular, installed a balanced scorecard system and it’s an outstanding piece of technology. It doesn’t do all of the work – determining what compensation is fair – but it works with the board’s subjective judgement to design incentive plans. The board is responsible for using the technology to generate some numbers and then deciding if those numbers feel right, under that circumstance. Ultimately, when it comes to consideration, it’s very valuable to have the combination of the board and the technology.

GGA: How has the role of directors changed (regarding compensation)?

Gillin: Well certainly from the general board perspective, the overall evolution of governance, the improvement of governance techniques, criteria and behaviors have evolved. It’s just been a massive increase over the last 15 or 20 years, if not longer. I mean, I know the first board I ever went on, years and years ago, somebody suggested using a dartboard when determining how you compensated people. It wasn’t sophisticated. But that’s no longer the case. I mean, everything must be well designed, well-structured, very transparent and fully defensible. And that applies to compensation, but also board behavior – meaning board outreach. Specifically, shareholder outreach by the members of the board. I’ve done that in several companies and the agenda is always one of three topics: governance, compensation and strategy formulation. It’s very often focused on compensation. And ordinarily, if the shareholder calls the company and wants to have a conversation, then you know you’re already in trouble. So, if you do it proactively you get a much better response. That’s a relatively new development, but none of this is going to stop. It’s just the way of the world these days.

GGA: What would be the key takeaway from what we’ve covered today. If readers were to walk away with only one piece of information, what should it be?

Gillin: That’s hard. We’ve covered a lot of important information. Compensation is a very important element in this discussion, the main focus, and how companies work to determine it. It’s often the trigger for activism, and all of the other elements flow from it, together with stock price performance.

How to Chair a Board Meeting

by | Sep 17, 2018 | Board Dynamics, Leadership, Meeting Effectiveness

Our Advice for Chairing an Efficient Board Meeting

 Welcome. Please everyone, take your seats.

You’re standing at the front of the room, ready to nosedive into the fifteen agenda items scheduled for the next 2.5 hours. There’s never enough time in the day, let alone allocated for that quarterly board meeting. Nevertheless, you’re ready. Thanks to an über knack for preparation, your watch and smart phone have already been synced to the antiquated clock ticking away at the back of the room. Hell-bent on keeping everyone focused and on schedule, nothing can stop you now.

Board Chair Qualities and Attributes

Being successful at the helm of a board meeting isn’t a fate destined for just anyone. A board chair needs to possess a thorough understanding of exemplary corporate governance principles. A fruitful board chair will have and maintain a strong relationship with the CEO, becoming their go-to for advice, counsel and support. To be successful, they must have experience in the organization’s industry. Exceptional board chairs will have the vertical knowledge and experience, on top of possessing the needed social and organizational skills to run a board meeting with ease.

Contrary to some incessant advertisements, one size rarely fits all. Such a sentiment is especially illustrated when it comes to the personalities of members on any board. Board chairs need to be ready to deal with every kind of personality type; after all, board members are human. Open mindedness and humility are a couple of imperative attributes that a board chairperson must have. These attributes will allow them to hear all sides of arguments, permitting opinions to come forth respectively, and creating a collaborative environment. It will also allow the chairperson to play devil’s advocate, when necessary, to avoid any chance of group-think.

The board chair must be decisive and confident in tone and body language. They need to keep control of the meeting, without coming off as excessively demanding. An expert chairperson skillfully blends the ideas of board directors and clarifies their perspectives.

During the Meeting

Robert’s Rules of Order. We rarely think twice about Robert or his rules. We don’t think twice because, without exception, board meetings universally operate according to Robert’s Rules, which is commonly known as parliamentary procedure.  A prosperous board chair will be familiar with the basic rules of parliamentary procedure and know exactly how to look up regulations for uncommon situations.

Calling the Meeting to Order

First and foremost, the board chair will establish a quorum, which is defined in the organization’s bylaws. Simply put, a quorum is a majority vote. The board chair will count members as they arrive for a meeting and the board secretary will note whether a quorum takes place, in the meeting minutes.

If a quorum isn’t established, the board chair may do one of four things:

  • Reschedule the meeting – for a day when more members are available.
  • Adjourn the meeting.
  • Recess – put the meeting on pause, giving the members more time to return to the room.
  • Round up the members like a shepherd does his sheep – call them personally and see if you can get enough for a quorum.

Once the board chair establishes, or re-establishes a quorum, the meeting can begin – ceremoniously marked by the resonating pound of the gavel.

Opening Remarks and Minutes Approval

An excellent board chair will kick off the meeting by acknowledging the board directors and guests – which sets a respectful tone for the meeting. Opening statements are an opportune time to make any announcements, give thanks to retiring members for their service, and provide any last-minute reminders.

If applicable, the corporate secretary will read the previous board meeting’s minutes. The board chair will ask for any modifications to the minutes. If the directors have corrections, the secretary will make them. The chair will then call a vote to approve them or approve them as amended. A motion gets seconded and a vote to approve finalizes the approval of the minutes. The secretary will make note of the approval.

Reports, Orders and New Business

What’s a board meeting without those reports we know and love?

  • Treasurer’s Report – there is no official vote on this report, unless it has been audited first. The report is simply filed.
  • Officers’ Reports – the secretary may read these reports out loud or ask the directors to read them on their own. The chairperson will cover any outstanding matters that require action and calls for a motion and a second to initiate voting.
  • Executive, Standing and Special Committee Reports – These reports will be submitted, prior to the meeting and the directors are tasked with reading them, prior to the meeting. If any recommendations come out of these committees, the board chair will present the motion, and call for a vote.
  • Special Orders – these orders are specific actions, e.g. nominations and elections, that occur at certain times of the year.
  • Unfinished Business and General Orders – pertains to any outstanding agenda item that didn’t get resolved in a previous meeting, so the board chair moved it to the current meeting for further review.
  • New Business – refers to new agenda items. Board directors may introduce a new item, prior to the meeting, with approval of the board chair. The item will then be debated, amended, and put to a vote.

Announcements and Adjournment

At the end of the meeting, the board chair will open the floor for any general announcements. The board chair will then close the floor and entertain a motion to adjourn, which must be seconded and may not be amended. A majority vote will adjourn the meeting.

Closing Thoughts

So, there you have it folks. Your go-to-guide on how to successfully chair a board meeting. Feel free to browse through the rest of our blog (how about checking out The Secret to Successful CEO Succession Every Board Should Know ) for more.

 

How to Effectively Take Board Meeting Minutes

by | Jul 5, 2018 | Governance, Meeting Effectiveness, Productivity

Tips to Make Minute Taking Efficient & Reliable

The number of times a board meets each year varies and is dependent on each individual board’s goals. Some boards will only meet once – at their annual general meeting (AGM) – and others will meet multiple times. Regardless of how many times a board meets, one task is universal throughout all board rooms. During each meeting, board meeting minutes are recorded.

Board meeting minutes are an official record of what occurs during the meeting. The role  of minute-taker is of utmost importance, and typically the Company Secretary does most of the writing and recording of the minutes. However, it is up to the remaining board members to review the minutes and make sure that the record accurately depicts their intentions.

Why are Board Meeting Minutes Important?

It is vital for a board to understand the importance of meeting minutes. Meeting minutes are the historical record of a board’s plans – short and long-term. Furthermore, meeting minutes assist in interactions with the IRS. The IRS or auditors have the power to challenge the record and compare it with tax returns. Having accurate records are necessary, especially since meeting minutes may be used as evidence, in court.

Planning and Preparing for Meetings

To avoid playing catch-up during a meeting, the minute-taker can benefit tremendously from using a template for following along in the meeting. It’s essential for company secretaries to budget enough time to prepare and plan for the meeting. Several meeting minutes can be pre-filled, such as location, meeting type, date, time and attendance (if the minute-taker or the Board Chair has a list of those who said they were coming and those who said they couldn’t attend). It is also important to record the start time of the meeting and the name of the person who is acting as minute-taker and recording and transcribing the minutes.

Taking the Board Meeting Minutes

Minute-takers must know what types of information should be reflected on the record. In essence, meeting minutes drive the needed actions of the board members and they detail the board’s expectations of who needs to take action; what they need to do; and when they will complete their tasks.