Excellence in the Boardroom

Book Review

By Michael Kennedy, CMC
Kennedy Management Services
Tel: (416) 385-3942
mkennedy@idirect.com

Title: Excellence in the Boardroom by William A Dimma
Publication Information: Published in 2002 by John Wiley & Sons
ISBN: 0 - 470 - 83160 - X

Author Profile: William Dimma is a veteran corporate director who has enjoyed a distinguished career as both a corporate executive and academic. He has held senior management positions in organizations such as Union Carbide Canada, Torstar Corporation, and Royal LePage, and later served as a professor and Dean of the Faculty of Administrative Studies at York University. As a corporate director he has served on over fifty corporate boards, and has been Chairman of organizations such as Enbridge Corporation, London Life, Trizec, Sears Canada, and the Greater Toronto Airports Authority. He has also had extensive experience serving as a director of various not-for-profit organizations.

Synopsis:
Excellence in the Boardroom is a discussion of best practices in corporate governance, viewed from the perspective of the author's own experiences during more than four decades of service on various boards. The book features a variety of "war stories" which the author relates in order to make specific points, and one of its more humourous sections is a profile of a fictional "Director from Hell" in which the author describes the different types of dysfunctional behaviours which he has seen directors exhibit over the years.

The author also presents a model for what he describes as being the "perfect board". Ideally, it should be one that contains seven to twelve members, no more than two of whom should be members of management. The Chairman and the CEO should be two different people, and there should be a full range of board committees, each of which should have no more than three to four members. All directors should be appointed with the expectation that they will serve the overall needs of the company, and not those of some specific constituency.

Excellence in the Boardroom goes on to outline a set of ten "best practices" which the author spells out as being the standards that boards should strive to attain, and later chapters in the book focus on specific issues of that are of concern to modern-day boards, such as director accreditation and compensation, evaluation of director performance, senior management compensation, relations with institutional investors, and corporate social responsibility.

The author concludes the book by reiterating three key overriding principles which he believes are fundamental to effective corporate governance:

Contrary to what some observers might believe, there is a real need for effective boards of directors.

Boards should never get involved in actually trying to manage the business; their role is to provide advice and counsel to senior management and to work collaboratively with the executive team to serve the best interests of the shareholders.

Boards must resist the temptation to focus on process and maintain their focus on improving the operating results of the company.

Why this Book is of Interest to Management Consultants:
Excellence in the Boardroom offers a practical, highly readable guide to the principles of sound corporate governance. This book will be of particular interest to consultants who focus on doing high-level strategy work, and to those who work directly with boards. However, it will also be very useful reading for any consultant who desires to understand how corporate boards function and what differentiates effective boards from ineffective ones.>