The Savvy Director Blog

Like many fields of human endeavour, corporate board work is rife with acronyms. Remember CSR (Corporate Social Responsibility)? How about DEI (Diversity, Equity and Inclusion)? And of course, today’s topic, ESG (Environmental, Social and Governance).

I don’t know about you, but lately I can’t open my email box without reading about ESG. I guess it’s time for The Savvy Director™ to dig a little deeper to find out what it’s all about and what it means for board directors. Think of today’s blog as an ESG primer.

For many of us, ‘ESG’ brings to mind environmental issues like climate change, pollution and protection of natural resources. But it actually incorporates a broader view, including social issues like labor practices, product safety and data security, and governance matters like board diversity, executive pay and business integrity.

Why all of the attention to ESG these days? To answer that, we need to know a bit about its...

Lately, I’ve had a number of conversations with board directors who feel they lack a strong financial background. They’ve expressed concern about their organizations’ financial metrics during these times. Specifically, they were wondering, “What are the forward-looking numbers we should be paying attention to?”

Today’s blog post sets out to answer that question. As a non-financial director myself, I reached out to some of the savvy directors in our network with the following question: “What budget line, metric or ratio do your eyes gravitate toward when prepping for your board meeting these days? What is getting your attention and what does it tell you?”

And I received a treasure trove of responses to share with you. Responses like …

“Cash is King … and Queen.”

“Tracking projected cash flow and managing balance sheet strength and liquidity is paramount - not only for survival, but for creating...

We’re officially in the dog days of summer. I like summer. I like dogs. So bring on the dog days.

As the old song said, ‘Roll out those lazy, hazy, crazy days of summer, those days of soda and pretzels and beer.’

This part of the year has always been a time to relax, get away with the family (and the family dog), do some light reading, and generally not be bothered with what is going on in the world around us. This year, that’s exceptionally hard to do. Especially the part about ignoring what is going on in the world around us. That’s basically impossible.

I guess you could say that, this year, the dog days of summer are ruff!

Seems like the perfect time to ask Alice Sayant, co-founder of DirectorPrep.com, to be our guest blogger!

Alice’s take on the dog days of summer

Why are they called dog days anyway? Common conjecture would have it that the name comes from weather that ‘isn’t fit for a dog’ or heat that is so extreme it...

You’ve read the material. You’ve seen the presentation. You’ve listened to management’s request. Now it’s time for the board to make a decision. It’s an important decision, too. You’re expecting a robust discussion.

But the room is quiet. Maybe a couple of directors ask a question or two, just for clarification. Now it looks like the board chair is about to call for a vote.

What’s going on? Groupthink, that’s what. Your board has fallen victim to Groupthink.

We’ve all been there, at one time or another. I know I have. So, what can we do about it?

First, what is it?

What is Groupthink?

The term was coined in 1971 by psychologist Dr. Irving Janis, following extensive research on group decision-making. His findings came from research into why a team reaches an excellent decision one time, and a disastrous one the next.

Janis found that a lack of conflict or opposing viewpoints led to poor decisions, because...

After twenty years, it’s time to say goodbye to an old friend … my office chair.

We started the business together in the late ‘90s. We were successful. We collaborated through thick and thin literally. Always supportive, never a complaint. Until recently.

The business has changed. Yes, we’re still helping board directors prepare for board meetings, so they are ready to collaborate, contribute and influence decisions. That’s why our DirectorPrep.com™ catchphrase is ‘Ready for Your Board Meeting?’ But now, we’re moving our business online, we’re writing blogs, and we’re recording training videos.

We’ve had good luck so far producing videos that managed to avoid capturing the office chair’s squeaks and groans in the audio feed. But change is hard. I did what I could to help the old chair make the transition I applied some WD40, I tightened the screws, I kept it clean.

Despite knowing a replacement would...

Like so many Canadians, I’m looking forward to having hockey back in my life. If all goes according to plan (fingers crossed!), the NHL will be treating fans to playoff games very shortly, as teams compete for the 2020 Stanley Cup. There’ll be empty arenas, they’ll be playing in only two cities, and the players will stay in their own ‘bubbles’ for the duration – so it will definitely be a strange kind of play-off season.

But still – it’s the Stanley Cup playoffs! (Cue the theme to Hockey Night in Canada.)

So what does hockey have to do with The Savvy Director™? Read on …

The Great One

Wayne Gretzky is known as the greatest hockey player of all time. He was not just a fabulous player, but a great ambassador for the game. He was interviewed countless times and his quotes about hockey, and about life, are all over the internet.

Business leaders have gravitated to one quote in particular. Everyone from Steve Jobs to Warren...

Over the years I’ve been involved in more than a few searches for a new CEO, and, I have to say, it’s got to be one of the most nerve-wracking processes that a board of directors undertakes. There is just so much riding on that one decision. It’s a process that is fraught with risk – the risk of overlooking the right person and selecting the wrong person.

In recent blog posts, we’ve dealt with different takes on the board’s role in CEO succession – first, the challenge of naming an interim CEO to deal with an unexpected CEO departure, and then, managing an orderly process of long-term succession planning. With today’s post, we’re closing the loop with a deep dive into the selection of a new CEO.

In this scenario, the board knows about the current CEO’s departure well in advance – in the case of a planned retirement, for instance – and has the luxury of plenty of time to locate just the right person to be the...

Last week’s blog about Interim CEOs seemed to strike a nerve. One reader even told us “You have no idea how timely this is. I am right in the middle of this exact discussion.”

Keeping with the topic of CEO succession, I asked Alice Sayant, co-founder of DirectorPrep.com™, to share her views about the board’s approach to succession planning.

Alice’s Take on Succession Planning

So, Scott gets to write about the controversial topic of interim CEOs, and here I am writing about the unsexy, decidedly noncontroversial topic of succession planning. How is that fair?

Why is succession planning noncontroversial? Because everybody agrees it’s a good idea – more than a good idea, it’s a key board responsibility and vital to the organization’s success. According to one source, 86% of leaders believe succession planning is an urgent or important priority. In researching the topic, I found no sources whatsoever that claimed succession...

Key person risk - by definition, it’s the risk carried by an organization that depends to a great extent on one individual for its success. From the board’s perspective, the organization’s primary dependence is on the CEO, the person through whom all good things happen! From the CEO’s perspective, the key person in the organization might be someone else - the lead revenue generator, the head of creative content, the inventor, the chief IT architect, or the morning show host.

What happens when, all of a sudden, the board’s key person departs? The CEO, the ship’s operational rudder, is gone. “What does our CEO succession policy say? We don’t have one? Oh, okay … I didn’t know that. So where do we go from here? We’d better call a meeting.”

I don’t mean to make light of a serious situation. Especially today during a pandemic, when the frequency of sudden departures of CEOs, for health or performance reasons,...

Countless times, I’ve sat impatiently at the board table waiting for another director to stop talking so I could have my turn. Needless to say, I was not really listening to what they were saying. My mind was preoccupied with my own upcoming pearls of wisdom. I know I’m not alone in this.

“Most people do not listen with the intent to understand; they listen with the intent to reply.” – Steven Covey

But if everyone is mentally practicing their own response, and no one is really listening, why are any of us speaking at all?

Real communication goes in both directions

I’m sure we would all agree that good communication skills are a requirement for savvy directors. So what does that imply?

When we talk about communication skills for the boardroom, we often mean speaking or presenting. We think of communication as a way of sharing our ideas, knowledge and opinions with others. We communicate to influence others, advise them, or challenge them.

But...