(A Post For Public Companies)
Setting the board agenda is a team sport. It involves lots of players. The team’s composition will not only vary depending on the circumstances in your particular company – but also will vary depending on the circumstances of what is happening in your company right now. Agendas need these varied inputs to ensure that boards and committees do not get too comfortable with how it is always been done, ensuring that agendas reflect the future of the company – not its past.
The general counsel (at some companies a corporate secretary – for convenience, we refer to the GC below) plays a key role being an effective facilitator and communicator. This can be challenging. There are times when you might have to redirect someone who doesn’t really belong in the process but wants to insert himself. Or more common, they want to place something on the agenda that shouldn’t be included. Being a gatekeeper isn’t fun. But someone has to do it.
These are the people who typically provide input into what should be on the agenda:
- Full Board: Lead Director, committee chairs, CEO, CFO, COO/President, EVP HR, GC
- Audit/Risk Committee: CEO, CFO, Controller/Chief Accounting Officer, Internal Auditor, Tax Exec, Securities Lawyer, IT Security, Risk Exec, IR
- Compensation/Human Resources Committee: CEO, CFO, EVP HR, Compensation, Workforce Strategy, Diversity and Inclusion
- Governance and Public Affairs: CEO, CFO, General Counsel, Head of Governance Relations, Head of Corporate Affairs/Media
The General Counsel’s Role in Setting the Board Agenda
It varies from company to company but its part compliance, part coaching and awareness-raising, part project management, part peace negotiator. Definitely part shrink. Its many hats.
At a basic level, the general counsel should always be involved in agenda planning discussions to ensure that items requiring board approval get put on the agenda. The general counsel should also ensure that all actions required by listing standards, state law, or securities regulations (or any other applicable industry regulations – banking, insurance, defense, nuclear, etc.) are addressed in the agenda.
If the general counsel knows that a project or deal is coming down the road, they should be working with the executive in charge – and CEO – to establish a cadence leading to the ultimate board action. Introducing the project or deal, providing updates regarding analysis and negotiation, a discussion of the deal framework, obtaining independent opinions (legal & financial) and of course, ensuring that the board provides any required final approvals.
The general counsel track best practices – both in governance and for the company’s industry in general – and advocating for the addition of any emerging agenda topics. A hot topic today is the numerous elements of ESG as they relate to the company’s business or industry. The general counsel can be invaluable in helping fit those into the agenda.
What is the Role of a “Staff Officer” for Board Committees?
At most companies, each board committee has a “staff officer” who works with the general counsel to coordinate agenda and materials for the committee meetings. The “staff officer” has a background that matches the role of the committee – the controller or internal auditor for the audit committee, someone in HR for the compensation committee. Typically, the governance committee falls to the general counsel.
These staff officers are key teammates for general counsels – and are key to committee effectiveness. Working together, they can ensure that agenda are well-crafted.
They can also work together to see that committee briefing materials are well-prepared. They should acquaint preparers with meet any “norms” that have been set for board briefing materials (e.g., decks not memos, not more than 12 pages, text must be at least 14 pts, each page must have a clear purpose stated at the top). They should help colleagues know their “audience.” Preparing materials understand the role of the board is different from the role of management and, therefore, materials for the board serve a different purpose than a management briefing.
They can also leverage their experience and expertise to coach employees who are attending a committee meeting for the first time or will need to deal with a particularly contentious issue on the agenda. Some committees are looking for a “presentation,” but most are looking for “discussion.”
Helping those employees understand how to prepare for a discussion with the committee will make the employee more confident going into the committee meeting and the committee meeting more effective.
How does it work at your company? We’d love to hear from you. Let us know at [email protected].
