Excellence in Governance: Resources from the NCEO
The NCEO's board excellence toolkit and candidate directory launched on September 23, 2021, during the Fall ESOP Forum.
You may already know about the directory of board candidates, which is a great place to find people with ESOP experience and an interest in serving on the boards of other companies. You may not know about the other resources. The toolkit has seven categories of resources, all of which can help ESOP companies get the greatest advantage possible from their boards of directors:
1. Overview of the role of the board
2. Defining the characteristics of the candidates you need
3. Identifying candidates
4. Evaluating and onboarding candidates
5. Board operations
6. Boards and ESOPs
7. Board activities
For example, the board charter at Web Industries "summarizes key guiding principles and governance concepts intended to assist the Web Industries Board in the effective fulfillment of its responsibilities to stakeholders" by describing Web's values; the board's responsibility, authority, and accountability; and the duties of directors. Web's charter also has a 500-word description of the guidelines for the board's internal process.
The NCEO will continue to add new resources to the board excellence toolkit. Later this week, we will post a Voices of Experience document with pithy insights from a variety of board members and experts in ESOP governance. Below are two excerpts from that document.
Jennifer Briggs, Beyster Institute at UC San Diego's Rady School of Management:
"ESOP companies looking for independent directors should find ways to ensure that potential board candidates can express their philosophy of the role of the board as part of the candidate evaluation process. There are wildly different approaches to board governance, even among the well-informed. Companies might consider adding an open-ended question to their interview list for prospective board members along the lines of “What is your view of your role as an independent director?'”
J. Michael Keeling, JMK-WAY, former chief staff officer of the ESOP Association:
"Having a board member of an ESOP company who knows the history of ESOPs and knows what has made ESOP companies overwhelmingly successful is very positive because that board member can help the board make decisions that improve company performance and avoid problems with government regulators."