1. HIGH PERFORMANCE BOARD 17 August 2011 Craig Hunter FCIS

2. Craig Hunter FCIS - my career Chartered Secretary in Public Practice – 30 years experience, with award winning business FTSE and global companies, charities, private groups, sporting organisations, sole traders British Swimming independent director European Swimming technical committee member International swimming referee British Swimming team manager 1989-2006 Olympic Games 2000, 2004, 2008 Commonwealth Games 1998, 2002, 2006, 2010 UK Sport Mission Control panel member

3. Programme Governance structure & board composition Directors’ duties and responsibilities Effective performance Purpose of the board Independent directors Competencies Behaviour Governance oversight Board evaluation

4. Typical corporate structure Shareholders Annual General Meeting Exec Non-exec Audit Executive Remuneration Nomination Clients Board of Directors

5. Typical sport structure? Council Annual Meeting Board of Directors Audit Executive Remuneration Nomination Membership HC Reps Independents Exec

6. Legal status Incorporated body Company limited by shares of guarantee Articles of association Companies Act 2006 Charity Trust deed Charities Act 2006 Unincorporated body Rules

7. Round table discussion Briefly outline your board composition and structure as well as the challenges you face

8. The perfect model - 1 Independent chair Internal or external appointment? Dynamic CEO Supported by executive management team finance, legal, marketing, performance/participation Appropriate non-executive/independent directors Skills based –v- regional/Home Country representatives Appointed –v- elected

9. The perfect model - 2 Board composition and size Diversity Candidates able and willing to challenge convention Balance of executive and independent/non-executive Broad range of experience Appointment Process, rolling –v- fixed term, terms Duties Delegations of authority Terms of reference Effective performance Board evaluation Succession planning

10. Directors’ duties and responsibilities Companies Act 2006 Duty to act within powers promote the success of the company exercise independent judgement exercise reasonable skill, care and diligence avoid conflicts of interest not accept benefits from third parties declare interest in proposed transaction declare interests in existing transactions

11. Dept. Business Innovation & Skills Simple high-level guidance for directors: Act in the company’s best interests, taking everything you think relevant into account Obey the company’s constitution and decisions taken under it Be honest, and remember that the company’s property belongs to it and not to you or its shareholders Be diligent, careful and well informed about the company’s affairs. If you have any special skills or experience, use them Make sure the company keeps records of its decisions Remember that you remain responsible for the work you give to others Avoid situations where your interests conflict with those of the company. When in doubt disclose potential conflicts quickly Seek external advice where necessary, particularly if the company is in financial difficulty

12. Effective performance Effective directors Effective decision-making Effective board performance Board evaluation

13. Round table discussion Describe your role within your organisation/sport What attributes/skills do you have? What constrains you/your board/your organisation?

14. The purpose of the board Key decision-making body responsible for leadership, integrity, performance, and risk profile of company Board should determine the purpose of its meetings Reassert the distinction between governance, strategy and operational matters Emphasise the importance of the board proactively crafting policies, processes and systems to ensure the delivery of its strategic objectives Ethical sensitivity? Consider how the board, collectively and in terms of individual contributions, might improve the overall effectiveness of their responsibilities in areas such as decision-making, strategy development and financial analysis

15. Skill levels in the boardroom Importance of induction Development and training Need for on-going support and development Access to operations and staff External advice Benchmarking directors’ performance – evaluation

16. Competencies A breadth of experience Team player who leaves their ego at the door Independent adviser, able to challenge as well as support Committed and prepared Articulate communicator and good listener Sharp mind and good judgement Visionary, creative, and passionate Build strong relationships and act as ambassadors Self-confident without being dogmatic Enhance their contribution through feedback Source: Whitehead Mann

17. Weaknesses Being a passenger or nodding dog Critical but not supportive – not adding value Still acting as a Chief Executive or frustrated Executive/Director Sloppy thinking or not up to the job Self centred Demanding too much detail and overloading Unprepared More on “broadcast” than “receive” Lacking courage to disagree Divisive and dogmatic Source: Whitehead Mann

18. The independent director YES, I challenge our executives YES, I keep up to date with current developments YES, I attend board meetings YES, I am independent YES, I understand the business

19. The Boardroom Framework Purpose People Process Drives Promotes Facilitates Outstanding Performance Strong Management Quality Working Practices Roles Objectives Responsibilities Board Composition/ Structure Board Meetings Business Knowledge Ongoing Development Relationship Management Skills and Skills development Policies and Procedures Communication/ Reporting Guidelines, Regulations, and Commercial/Sporting Requirements

20. Boardroom behaviour ICSA report concluded: “Best practice boardroom behaviour may be characterised by A clear understanding of the role of the board … Independent thinking Challenge which is constructive, confident, principled and proportionate Rigorous debate … and Supportive decision-making environment”

21. Appropriate boardroom behaviours Develop a culture of constructive and robust challenge in the boardroom Avoidance of “groupthink” culture Interrelationships within the boardroom Group dynamics, as well as the contribution of (key) individuals Interaction with employees Social context (dinners, away-days, events) Ground rules for meetings

22. Board agenda and meetings Standard agenda items and annual plan Allocate sufficient time Presentations by key executives Role of board papers Robust discussion & challenge Behaviour Corporate message - unanimity Accountability Use and role of committees Focus on strategy, financial management, governance, performance/participation, risk

23. Governance oversight There are three levels Institutional – are the corporate governance policies and architecture fit for purpose? Organisational – has management installed adequate processes and systems? Behavioural – are directors exhibiting the appropriate behaviour? Sport & Recreation Alliance Voluntary Code of Good Governance for the Sport and Recreation Sector

24. Board evaluation - 1 The Walker Review: “The board should undertake a formal and rigorous evaluation of its performance, and that of committees of the board, with external facilitation of the process every second or third year…”

25. Board evaluation - 2 Who is involved? Chairman Directors (executive & independent) Staff Independent observer? Process: robust assessment of strategic plan and outcomes Frequency and facilitation Potential conflicts of interest Nature and importance of board evaluation How outputs of the process can be meaningfully disclosed without compromising confidentiality Notification to stakeholders

26. Resources www.icsa.org.uk Corporate, voluntary & community sector Committee terms of reference Audit, Executive, Nomination, Remuneration, Risk Guidance Joining the right board: due diligence for prospective directors Induction of new directors Directors’ duties Job/role descriptions Financial Reporting Council The UK Corporate Governance Code (June 2010) Guidance on Board Effectiveness (March 2011)

27. www.versec.co.uk M: 07771 814929 T : 01727 855512 F : 01727 855501 E : craig.hunter@versec.co.uk Registered in England at 39 Alma Road St Albans AL1 3AT Company Number: 3999397 VAT Number:706 0811 65 www.versec.co.uk M: 07771 814929 T : 01727 855512 F : 01727 855501 E : craig.hunter@versec.co.uk Registered in England at 39 Alma Road St Albans AL1 3AT Company Number: 3999397 VAT Number:706 0811 65 Sport Management Consultancy