1. powernoodle.com Governance Solutions Board of Directors, Performance Evaluation

2. John has worked across Canada and across sectors on board effectiveness and other governance issues for more than 14 years.  Delivers practical insights, approach and ability to facilitate needed governance change or transformation.  Guides Directors through the unique relationships between the Board, Management and other Stakeholders to build trust and confidence.  Brings in-depth knowledge of leading edge governance practices including director recruitment, board education, meeting effectiveness and best practices, information management and decision-making, and board and director performance evaluations. “Powernoodle provides a unique and highly effective way for Boards to identify and process issues, consider options and competing interests and identify the best way forward for their organizations and the stakeholders they serve.” 2 Board of Directors, Performance Evaluation: created with Powernoodle Expert John T. Dinner

3. Powernoodle sessions help you avoid the problems that can prevent your Board from identifying issues or ideas, understanding their importance, and making decisions. Using Powernoodle, Boards quickly and respectfully make decisions that everyone understands, supports and is willing to implement. 3 Board of Directors, Performance Evaluation with Powernoodle

4. This tool will provide you with clear guidance on how to organize and facilitate a Board of Directors performance assessment.  Assessing Board performance is a critical process that every Board of Directors should engage in as part of their annual Board development process.  Board evaluations are regarded as a best practice and are required or expected by regulators, shareholder/stakeholder coalitions and others. 4 Board of Directors, Performance Evaluation with Powernoodle

5. Your Chair? Advantages: Understands your organization and how it operates Disadvantages Might be too busy organizing the sessions to participate fully May not recognize biases An Outside Facilitator? Advantages: Brings objectivity Adds specialized facilitation knowledge - can keep the group on track and on time Allows all participants to focus on the discussion Disadvantages Will need some background preparation 5 Select your Organizer

6. Governance evaluations are an important and effective tool to help the Board fulfill its responsibilities and contribute to effective oversight. Board and Committee evaluations can serve to:  to foster proactive board development  proactively identify issues negatively impacting Board performance  raise the performance bar relative to governance best practices 6 Board of Directors, Performance Evaluation: Objectives

7. When undertaken methodically, strategically and constructively, regular evaluations can serve to strengthen overall board capabilities and identify opportunities for improved performance. Using relevance in design and sensitivity in implementation, these evaluations will improve the quality of board governance and foster the trust and confidence of key stakeholders. 7 Why Engage in a Board of Directors, Performance Evaluation?

8. Other benefits can include:  an accurate check of the Board’s “pulse”  identifying and acting on performance issues proactively  encouraging shared commitment to governance success  promoting effective use of time & resources 8 Performance Evaluation Improve Governance

9. The standard outcome of all Powernoodle sessions is a Powernoodle Report. The Report is a powerful tool that is created automatically and moments after your session ends. This report:  is available as an EXCEL download to all participants.  captures every discussion thread for future reference and action. The Powernoodle Report: A Tool for Action 9

10. Using this Guide a A Powernoodle session has an Organizer, and any number of Participants. a This Guide is designed for an Organizer and discusses some features of Powernoodle that are only available to the Organizer. a This Guide also contains information about the expectations of Participants in a Powernoodle session. 10

11. As the Powernoodle Organizer, you will:  Create the Powernoodle Session.  Create Powernoodle Questions in the Session Room: 1. How is the Board organized? 2. How does the Board do its work? 3. How do Directors interact with Management and amongst themselves? 4. How effective are Board and Committee meetings?  Create the Agenda and upload any resource documents for Participants.  Invite all participants via email into the Powernoodle Session and provide guidance to Participants at each step throughout the Session. The Organizer’s Job 11

12. The purpose of this Powernoodle is to provide a way for meeting participants to rate the Board of Directors’ performance while remaining anonymous. In this Powernoodle, the Organizer will disable the ‘Vote’ and ‘Prioritise’ steps. Within the Rate step, the Organizer will create a ‘single- criteria’ rating for the Powernoodle stickies of: 0 = strongly disagree 10 = strongly agree. 12 Customising the Powernoodle Session for your Board

13. In this Powernoodle, the Organizer will pre-load the Brainstorm step with sticky notes. The following slides provide the content for the sticky notes for each of the four Questions. The Organizer should copy and paste each statement in the ‘add idea’ window in the Brainstorm step of each Question. 13 The Brainstorm In this Powernoodle, Participants will not add new statements to the sticky notes in the Brainstorm step. Participants will move to the Rate step where they will rate each statement and add comments to the sticky notes. In this Powernoodle, Participants will not add new statements to the sticky notes in the Brainstorm step. Participants will move to the Rate step where they will rate each statement and add comments to the sticky notes.

14. Powernoodle Question 1: How is the Board organized?  Appropriate/required policies exist for key functional areas.  The division of authority and delineation of responsibilities between the Board and Management are clear.  Policies are adhered to and reviewed in a timely manner.  There is an effective process for the election of the Board Chair and Vice- Chair.  The Board support, including the Board website, is effective.  The Board’s role and accountabilities are clearly defined and well understood.  Director compensation and expense reimbursements are satisfactory.  Each committee of the Board has clear terms of reference that effectively guide the Committee’s work.  The Board has a relevant and effective committee structure.  The Board has the expertise and experience to supervise management and otherwise fulfill its duties.  The terms for Director appointments are appropriate.  The Board recruitment process effectively equips the Board with required knowledge, skills and experience  The Board has the appropriate number of directors. 14

15. Powernoodle Question 2: How Does the Board do its work?  The Board is aware of the nature and extent of risks faced by the business.  The Board is kept apprised of and understands developments in corporate governance.  The Board is prepared before meetings to understand the relevant issues, discussions and decisions.  The Board has adequate, timely and clear information to facilitate oversight and decision-making.  The Board is aware of policies and procedures in place to identify, monitor and manage business risks.  There is effective delegation of issues to Management to ensure effective management.  The support directors receive for their on-going education and development is appropriate and effective.  Director education is timely, relevant and helpful.  There is appropriate orientation that effectively equips new directors to contribute.  The appropriate issues are effectively delegated to Committees of the Board.  The Board is able to review the adequacy of the information it needs to fulfill its responsibilities.  The Board functions smoothly and effectively. 15

16. Powernoodle Question 2: How Does the Board do its work? (cont)  The Board has an appropriate Senior Executive succession plan.  The Board has an appropriate process for hiring an effective CEO.  The process the Board uses to evaluate the CEO’s performance and compensation is effective.  The process the Board uses to set goals with the CEO is adequate.  The Board effectively sets priorities and organizes itself to be aligned with its mission.  The Committee appointment process equips Board committees with the appropriate skills and experience.  The Board has appropriate procedures in place to supervise the management of the business.  The Board effectively oversees the management of the business.  Committees have the appropriate decision-making authority.  The Board is equipped and prepared to review and approve required actions and policies. 16

17. Powernoodle Question #3: How do Directors and Management interact?  Issues with respect to the Board’s relationship with management are dealt with effectively.  Board members demonstrate an adequate commitment of time for Board responsibilities.  Board members display readiness to advise and challenge management.  The Board responds in a timely manner to issues or deficiencies identified by management.  There are appropriate policies in place to maintain a culture of integrity.  The working relationship among Directors reflects a high level of mutual respect and trust.  Directors understand what situations can pose potential conflicts of interest and how to respond.  Management promptly responds to requests for more information or discussion regarding Board materials.  The Board is kept informed of material issues in a timely manner.  The Board is kept adequately informed of any developments in between scheduled meetings.  Board members have exposure to and knowledge of all executive and management employees as appropriate.  Board and management communicate effectively, openly and frankly on expectations and concerns. 17

18. Powernoodle Question #4: How effective are Board and Committee meetings?  Meeting pre-read materials are available in a timely manner.  The Board is dealing with the right issues by focusing on the organization’s strategic priorities.  Management presentations to the Board are focused and succinct.  Meetings have an appropriate mix of presentations and discussions.  Meetings are productive with agendas covering appropriate topics.  There is appropriate time allotment given to key strategic issues.  The Board should have a more active role in agenda development.  Meetings are characterised by consistent director attendance.  Appropriate meeting protocol has been adopted and is followed and respected  Directors seek relevant advice as circumstances warrant.  Board members come to meetings well prepared. 18

19. Powernoodle Question #4: How effective are Board and Committee meetings?(cont)  Board meetings are candid and constructive.  There is sufficient time for in camera meetings (discussion among directors without management present).  Meeting minutes are clear, useful and adequately record the Board’s deliberations and decisions.  Meetings are led effectively with enough time allocated to each agenda item.  The Board receives sufficient specific information to provide relevant external knowledge and insight.  The Board strikes a reasonable balance between business objectives and risk management and control. 19

20. Participants’ Job 20 In this Powernoodle session, Powernoodle Participants will:  Respond to the invitation from the Organizer and log onto Powernoodle.  Review any Resource documents in the Session Room.  Review each statement in the Brainstorm step in each Question.  Rate each statement from 0 = strongly disagree to 10 = strongly agree.  Comment on any statement with an emphasis on explaining low (disagree) ratings.

21. Preparing for Next Steps with the Powernoodle Report a The Powernoodle Report is immediately available to all meeting participants. a The Powernoodle Report quickly identifies which performance theme seems to be most widely shared by meeting participants. a The Chair identifies next-steps and assigns accountability for follow-up. 21

22. For detailed examples and directions, you can:  Log in and visit the Help section.  Contact us at support@powernoodle.com.support@powernoodle.com  Look for Powernoodle user groups online. Powernoodle Help and Support 22 Looking for more detailed directions? Watch the Organizer Training Series videos www.powernoodle.com Looking for more detailed directions? Watch the Organizer Training Series videos www.powernoodle.com

23. 23 Web: http://www.boardgovernance.ca/http://www.boardgovernance.ca/ Blog: http://johndinner.wordpress.com/http://johndinner.wordpress.com/ LinkedIn: http://www.linkedin.com/pub/john-dinner/0/385/269http://www.linkedin.com/pub/john-dinner/0/385/269