People have many reasons for becoming involved in a board of directors. For example, some find it an excellent way to contribute to their community’s development through a non-profit organization.
For others, being involved with a foundation is a way to support a cause they believe in. Still others want to either gain new expertise or contribute their knowledge.
However, being a board member is generally so rewarding and prestigious that many people still seek to become board members for the prestige, without asking themselves what they can contribute.
The board of directors plays a crucial role in an organization’s structure and takes on very important responsibilities in respect of that organization. For this reason, each member’s contribution is a determining factor and should therefore be one of the key considerations when deciding to become involved in a board of directors.
Similarly, recruiting board members should not be taken lightly. The organization’s health and sustainability depend on these decisions. As such, the roles and responsibilities of this function must be understood from the outset.
The role of directors and management
The board of directors and management are responsible for an organization’s governance. In defining governance, the Collège des administrateurs de sociétés refers to the International Federation of Accountants’ definition:
The set of responsibilities and practice s exercised by the board and executive management with the goal of providing strategic direction, ensuring that objectives are achieved, ascertaining that risks are managed appropriately, and verifying that the organization’s resources are used responsibly.
Directors therefore play a fundamental role in terms of the organization’s mission and values as well as its strategy, policies and compliance, among many others.
Directors are also responsible for measuring the organization’s results, performance, and compliance with governing legislation and regulations. The board also safeguards the interests of the organization’s members and shareholders.
Management, for its part, handles the organization’s day-to-day activities. It implements the organization’s strategies, manages activities to create value and ensures the organization’s efficiency.
Board members have complementary roles that must be fully understood by the various stakeholders to ensure efficient organizational governance.
The director’s duties
Becoming a board member implies taking on a number of duties that have to be diligently discharged. Board members must be ethical, responsible and, above all, accountable.
They must, therefore, attend meetings and be well prepared in the face of the entity’s challenges. Additionally, they are required to comply with the board’s code of ethics so as to avoid conflicts of interest.
Smaller organizations must very often call upon volunteer directors who should ensure that as directors they are appropriately motivated so they can actively support management in dealing with limited resources and budgets.
Traps to avoid
Too often, organizations have a board of directors where the roles of management and the directors are either not clearly defined or overlap. Such unproductive situations frequently lead to governance and communication problems between the board and management and can significantly hamper the organization’s development.
Additionally, board members are often individuals who, though dedicated, do not necessarily have all the requisite skills to fulfil their mandate. They may have been recruited because someone in management knows them, or because they have voiced an interest or have a specific skill, which does not necessarily mesh with the entity’s strategic directions.
Board members must use judgment and be independent when selecting members.
Ideally, board members should not have similar profiles. A diversity of profiles, experience and expertise promotes discussion and, to a certain extent, a competitive spirit. Selecting board members requires as much care as selecting an organization’s employees.
A preliminary evaluation
There are many ways of assessing a board’s effectiveness. They can serve to determine if the board’s membership is appropriate and if it is operating in an optimal manner.
Members can be assessed by third parties or by a peer review, for example, using anonymous questionnaires in specific contexts.
Such evaluations provide a means for taking the necessary corrective measures and avoiding problems. Additionally, they can help to pinpoint expert profiles that can be called upon to benefit the organization.
In sum, before joining a board of directors, you need to question your motivation, as this will have a direct impact on the organization. Boards of directors, for their part, can use a variety of means to ensure their quality and effectiveness.
09 Feb 2024 | Written by :
Jean-François Boudreault is a RH expert at Raymond Chabot Grant Thornton.
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The Grant Thornton International IFRS team has published the 2024 edition of Navigating the changes to International Financial Reporting Standards: A briefing for preparers of IFRS financial statements.
The publication is designed to give preparers a high-level awareness of recent changes that will affect companies’ future financial reporting.
This publication covers both new standards and interpretations that have been issued as well as amendments made to existing ones, giving a brief description of each.
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The first step in every company’s successful project is a change management plan. Take care of your teams so you can mobilize them and help them adapt.
You can’t turn innovation into success if you don’t take into account the project’s impact on each stakeholder’s workload. Right from the start, creating a change management plan that includes all your teams is important. This will allow you to:
- achieve the expected benefits faster;
- minimize both risk and reduced productivity during the change process;
- mobilize all the teams involved and encourage their participation;
- determine the approach required to achieve business objectives which includes the change process.
To achieve optimal results, adopt this approach from the outset of your project. If your project is already ongoing and human resources are proving challenging, take a step back and build your change management plan. This should turn things around.
How to prepare a change management plan
Below are the steps you should take on your path to transformation. Recent studies show that the success rate of change initiatives built around effective change management practices is twice as high as those without effective practices and, according to a study conducted by Prosci, these initiatives are twice as likely to meet the fixed costs.
1- Break down the project components
First, you must outline all the elements of the desired change process:
- conducting an analysis;
- developing the change management strategy;
- defining the core elements of the process and mobilizing key players to achieve your objectives.
2- Organize the workload
Once your project and its impacts have been determined, you can begin organizing the workload:
- structuring the stakeholders;
- minimizing risk;
- explaining and ensuring that all parties understand the objectives.
3- Deployment
Are you ready? Now you must ensure that you:
- follow up on meetings;
- supervise the various stakeholders;
- move forward with the actions and communications required to ensure the project’s success.
4- Monitoring
During each stage of the project, you must monitor progress and assess whether you’re achieving the desired results.
5- Recognition
During the final stage, you must be ready to celebrate the project completion and its success.
This way of integrating support into the change management process was developed by our team and is known as “PODER” (which means power in Spanish). This approach is inspired by DO-IT* certification.
Ten change management accelerators
Several factors must be assessed and considered during the various stages of your action plan. Based on the complexity of the proposed project, and taking into account the context and business culture, your organization may need to address several or all of these elements. An external mediator can help you determine which elements are necessary and a priority for you.
Governance
Have you designated all the necessary committees, including a strategic committee? For example, have you identified the points of contact who have enough influence to take action within the teams and move forward with the various components?
These people will act as facilitators. They will know how to engage the required resources, make the necessary decisions and resolve any issues.
Capacity
Are there issues regarding resource availability and the capacity to implement change while maintaining productivity?
For example, if half the team is focused on a new change, you will certainly need to add resources for day-to-day operations.
Training
Naturally, the people affected by this change may require training to update their skills or learn how to use new software, for example.
If training is required, it must be included in your change management plan from the outset along with the deadlines and necessary resources.
Work organization
- Which action plan should be implemented to achieve change?
- Has each resource been assigned a specific role, milestones and deadlines?
- Will the roles change? If so, this must be taken into account.
Communication
Draw up a communication plan to inform all stakeholders of the progress on the various stages of your project in a timely manner.
Alignment
- Are all stakeholders aligned with regard to the message and objectives?
- Do they fully understand the reason behind the change and the resulting benefits?
Mentoring
We must start out by providing support for first-level managers, who will then be able to contribute to supporting their teams.
Coaching
Managers and senior managers will then be able to oversee all the teams and act as the points of contact during the transition period.
Involvement
- Ask your teams for feedback;
- Ensure that everyone is on board with the change and understands the objective;
- If certain employees appear resistant to the ongoing change, find out what’s holding them back so you can identify a solution as quickly as possible.
Awareness
How does this change impact each person’s work? From the outset, ensure that all stakeholders are aware of the needs and consequences of the change process within other teams so that everyone understands the tangible objectives and benefits of the project and transformation.
A successful change process requires anticipating every element and supporting the teams that are the key to your success. Don’t hesitate to call on a skilled external consultant to support you during this process.
01 Feb 2024 | Written by :
Marie-Eve Proulx is an expert in Business Transformation consulting. Contact her today!
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ISSB publishes amendments to enhance international applicability of SASB standards.
The SASB standards consist of 77 industry-based sustainability-related disclosure standards and include over 1,000 metrics. While the ISSB has not developed the standards, it has been responsible for the maintenance and enhancement of the SASB standards since the consolidation of the Value Reporting Foundation (VRF) with the IFRS Foundation in August 2022.
The SASB standards are required to be considered when applying IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S2 Climate-related Disclosures, when evaluating sustainability-related risks and opportunities in the absence of another IFRS Sustainability Disclosure Standard. Therefore, it is important for the SASB standards to be globally appropriate. Prior to these amendments, the SASB standards contained certain references to jurisdiction-specific laws and regulations, which were not globally applicable.
The amendments
The ISSB split the project into two parts, resulting in two sets of changes. It initially published amendments in June 2023 to address the climate-related disclosure topics covered within IFRS S2. The additional amendments, published in December 2023, aim to remove the jurisdiction-specific references from non-climate related disclosure topics and metrics to assist reporting entities when applying IFRS S1. There are approximately 650 non-climate related metrics and, from these, 220 metrics are impacted by these revisions.
Consult the Advisor Alert.
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