1. Evolving Governance Creating Your Dream Advisory Board Kirk Corkery (C) TMSI 2011

2. Points to Cover A Model of Governance Evolution Getting It Right Things to Remember (and Watch For) Getting the Most from Advisory Boards 2(C) TMSI 2011

3. Evolution of Boards Council of Friends Investment Club Working Board Informal Board Marquee Board Governing Board Typical Boards (C) TMSI 20113

4. Council of Friends Early start –up Friendly advice No stake or money involved Negative feedback (however true) removes one from the inner circle 4(C) TMSI 2011

5. Informal Board Real Start-up Seed Money provided Close but not knowledgeable business acquaintances Foundation for failure begins to be laid 5(C) TMSI 2011

6. Investors Club Mid Start-up stage; Board starts to change Regular meetings occur Venture capital / Mezzanine financing Opinions become self serving Governance not on anyone’s mind 6(C) TMSI 2011

7. Marquee Board Pre-IPO Boosts the company’s offering Players depart soon afterwards 7(C) TMSI 2011

8. Working Board Heavily favours invested money but governance now becomes a topic Focus is to deliver the pre-IPO business plan Chair and CEO often the same person 8(C) TMSI 2011

9. Governing Board CEO (Founder) replaced Chair/CEO roles separate Focus on governance not management 9(C) TMSI 2011

10. Implications of the Model Six stages are common to most companies Some pass through stages faster than others Good leadership plays a huge role Corporate culture and the business model is set in the earliest stages But the advisors needed are not present at the table 10(C) TMSI 2011

11. Implication of the Model Imagine the impact on the GDP if we could reduce company failures by 15% by getting the right advice Loan costs drop; better margin and fewer bad loans More to invest in new opportunities as a result Employment rises creating greater government revenue as a result Reduced load on the social system Better governance means we all win! (C) TMSI 201111

12. Evolution of Boards Council of Friends Investment Club Working Board Informal Board Marquee Board Governing Board Typical Boards (C) TMSI 201112 Typical Advisory Councils

13. Advisory vs Governing Boards Advisors No liability No (or little) stake in the outcome Not much in the way of compensation Little loyalty to company Directors Represent all stakeholders Have defined duties and responsibility to company Cannot just walk away easily 13(C) TMSI 2011

14. Advisory Board Types Broad Help run the business Trusted, experienced individuals Evolve into the governing Board in time Recurring Focus Group More narrow in scope Meet regularly on a consistent topic May involve customers or suppliers Will never delve into governance issues 14(C) TMSI 2011

15. Evolution of Boards Council of Friends Investment Club Working Board Informal Board Marquee Board Governing Board Typical Boards (C) TMSI 201115 Typical Advisory Councils (Broad) Typical Advisory Councils (Recurring Focus Groups)

16. Getting It Right Know what you need What problems you wish addressed? What skill sets are needed to provide solutions? Get the best & listen to them That you can afford No different process than any Nominating Committee would use Find a Trusted Challenger Devil’s Advocate or Independent Chair Keeps the CEO/Founder honest and accountable 16(C) TMSI 2011

17. Issues/Considerations Selection, Retention & Orientation Processes to follow Fit vs Skill Use of customers or suppliers Why do they slip away? Compensation How much now vs future considerations Protecting your company When to insist on an NDA? 17(C) TMSI 2011

18. Getting the Most Focus, Focus, Focus A few limited questions at a time Forces proper consideration ahead of time by CEO Keeps group from 'wandering' into areas where advice is not wanted Let's group feel accomplishment too Summarize all points not just where you will go or the consensus of the group Encourage diversity versus alignment 18(C) TMSI 2011

19. Summary Advisory Boards can be highly useful Can also absorb a lot of the CEO's time Most useful When set up early in a company's lifecycle When composed of the best experts possible When carefully directed and managed (C) TMSI 201119

20. Questions kcorkery@tmsigroup.com (C) TMSI 201120