1. Are We An Exceptional Board? NCMA Governance: Are We An Exceptional Board? Governance Committee Report (As Of September 27, 2006)

2. NCMA Board Meeting Oct 2006 2 Objective Begin a dialog to determine if we are properly structured to – –Pursue the Association’s Strategic Objectives –Perform in a competency based manner Reach consensus that change is needed Set foundation for a vote in December

3. NCMA Board Meeting Oct 2006 3 NCMA National Board Structure Overview Characteristics of Exceptional Boards Obstacles of Current Board Structure Association Benchmarking Proposed Way-Ahead Potential Issues & Resolution Recommendation

4. NCMA Board Meeting Oct 2006 4 Characteristics of Exceptional Boards * 1.Govern in constructive partnership with the Executive Director 2.Shape and uphold the mission, articulate a compelling vision and ensure congruence between decisions and core values 3.Allocate most of their time to strategic thinking to hone the organization’s direction 4.Institutionalize a culture of inquiry, mutual respect, and constructive debate and sound decision making 5.Put the interests of the organization above all else and act in an independent-minded manner 6.Adopt an ethos of transparency to ensure stakeholders have access to appropriate and accurate information * Source BoardSource “Twelve Principles of Governance That Power Exceptional Boards” 2005

5. NCMA Board Meeting Oct 2006 5 Characteristics of Exceptional Boards * (Continued) 7.Promote strong ethical values and disciplined compliance through appropriate mechanisms for active oversight 8.Ensure sustaining resources exist to link bold visions and plans to financial support 9.Measure the organization’s advancement toward mission objectives – Results oriented 10.Fulfill essential governance duties by structuring themselves to support organizational priorities 11.Embrace continuous learning by evaluating their own performance and assessing the value they add to the organization 12.Energize themselves through planned turnover, thoughtful recruitment and inclusiveness * Source BoardSource “Twelve Principles of Governance That Power Exceptional Boards” 2005

6. NCMA Board Meeting Oct 2006 6 Characteristics Most Relevant to Board Structure and Election Process Exceptional Boards – #3 – Use strategic thinking to hone organizational direction #5 – Put interests of the organization above all else #9 – Maintain a strong focus on organizational advancement toward mission objectives #10 – Structure themselves to support organizational priorities #12 – Energizing themselves through planned turnover and thoughtful recruitment

7. NCMA Board Meeting Oct 2006 7 NCMA National Board Structure Overview Characteristics of Exceptional Boards Obstacles of Current Board Structure Association Benchmarking Proposed Way-Ahead Potential Issues & Resolution Recommendation

8. NCMA Board Meeting Oct 2006 8 CURRENT STRUCTURE 14 DIRECTORS FROM REGIONS –Elected by Chapter Presidents within a region 4 AT-LARGE DIRECTORS –Elected by Board of Directors 3 OFFICERS (President-elect, Secretary, Treasurer) –Elected by Chapter Presidents President and Past President 2 Ex Officio – Executive Director & General Counsel

9. NCMA Board Meeting Oct 2006 9 Specific Obstacles Selection process for 23 voting Directors limits Board’s ability to ensure it is structured to achieve strategic objectives –14 Directors elected within regions (7 each year) Nomination process implementation is uneven among the regions Focused on finding willing and able participants Chapter Presidents within each region have limited selection options –5 Officers elected nationally by all Chapter Presidents (3 each year) Nomination process allows any interested member to run with the support of a member of the Board of Directors Out of step with comparable organizations (NIGP, PMI, and ISM Boards all select their Officers) Doesn’t allow Board to select leadership focused on strategic objectives –4 Directors elected “at large” by the Board (2 each year) Only ability Board has to select Directors like an “Exceptional Board” –Limited Board continuity – potential for 52% turnover each year (12/23)

10. NCMA Board Meeting Oct 2006 10 Does NCMA’s leadership reflect and serve the objectives of the Association? The strategic objectives define needs that would be best served with various competencies and areas of expertise. Board members should be chosen to enable the Board to advance the Association’s strategic objectives. The only avenue to deliberately achieving that goal at present is in the nomination and election of At-Large Directors. We should expand that to a conscious evaluation of board strengths and weaknesses and work to address specific needs.

11. NCMA Board Meeting Oct 2006 11 Matching Strategic Objectives to Board Members Qualifications – Some Examples Public Policy State & Local Gov. Commercial Contracting DoD Policy Certification Experience Faculty Member or Student Executive Level Person Line Contracting Officer Specific Functional Expertise Deployment Expertise

12. NCMA Board Meeting Oct 2006 12 NCMA National Board Structure Overview Characteristics of Exceptional Boards Obstacles of Current Board Structure Association Benchmarking Proposed Way-Ahead Potential Issues & Resolution Recommendation

13. NCMA Board Meeting Oct 2006 13 OTHER MODELS NIGPPMIISM Board Size 15 – 13 from regions and 2 at-large May have 12-18; currently have 15 at-large 15 Nominated By Nominating Committee. Voters may nominate by petition (requires 10% of voters in region or 5% for at- large) By petition (1% of eligible voting membership) or Nominating Committee. Must make reasonable efforts for geographic diversity. Nominating Committee – no others authorized Elected By Agency Representatives and Chapter Presidents Eligible voting membership Members at annual meeting Officers Chosen By Board

14. NCMA Board Meeting Oct 2006 14 QUALIFICATIONS PMI requires that candidates meet certain criteria, including proven PMI leadership performance; proven business and project management experience; proven experience in strategic thinking; experience in areas which can bring added value to the PMI Board (senior management/executive experience; membership in other similar organizations; international, multi-national or global enterprise experience).

15. NCMA Board Meeting Oct 2006 15 QUALIFICATIONS ISM requires at least 7 of 15 directors be members. Majority are Senior Vice presidents, CEOs, or Chief Procurement Officers. NIGP requires that candidates be in the public sector; officers must hold a CPPO. Questionnaire for potential candidates includes experience, certification, education/professional development, contributions to the profession and NIGP, contributions to society, and an essay.

16. NCMA Board Meeting Oct 2006 16 NCMA National Board Structure Overview Characteristics of Exceptional Boards Obstacles of Current Board Structure Association Benchmarking Proposed Way-Ahead Potential Issues & Resolution Recommendation

17. NCMA Board Meeting Oct 2006 17 BASIS FOR CHANGE Limited ability to recruit candidates based on talents related to strategic objectives Some regions have had no viable candidates Other regions have multiple candidates, but only one can be elected Need increased ability to recruit candidates based on competencies, not just geography Ensure effective Board balance between chapter level experience and executive level experience Enhance ability of chapter presidents to participate in nation-wide election of Directors Ensure Board has better knowledge base for selection of officers Decrease Board turnover rate for more stability

18. NCMA Board Meeting Oct 2006 18 PROPOSED NEW STRUCTURE Chapter Presidents elect 8 Directors in an Association-Wide process –2 to 3 Directors each year Board elects 5 Association officers and 10 other Directors –N&E Committee will build slate based upon Board approved Charter –3 to 4 Directors each year –3 Officers each year Directors serve 3 year terms to reduce turn over –May serve one additional consecutive term. –Voting member turnover reduced to 9 of 23 annually (<40%) –Director to Officer transition may reduce turnover further Retain three step Presidential progression Treasurer and Secretary serve one year terms –May serve one additional consecutive term. 2 EX-Officio Directors remain as is

19. NCMA Board Meeting Oct 2006 19 TRANSITION Under Construction: Transition cannot be worked until we have consensus on a construct Need a plan before December Vote

20. NCMA Board Meeting Oct 2006 20 NCMA National Board Structure Overview Characteristics of Exceptional Boards Obstacles of Current Board Structure Association Benchmarking Proposed Way-Ahead Potential Issues & Resolution Recommendation

21. NCMA Board Meeting Oct 2006 21 CHAPTER CONNECTIVITY Issue: Does this change reduce Chapter connectivity? Mitigation – –No change from current structure – Directors do not and will not have regional “management” responsibilities –Communication is universal in today’s environment. –Each member, each chapter officer, each committee member has the same opportunities to avail themselves of the organization’s activities and information via the website, blast emails, flyers, leadership conferences, etc. –Geographic diversity will still be a factor in Board composition –Chapter Development Committee is continuing to work on ways to foster Chapter President interaction and influence –Introduction of “chapter mentor” program gives chapters access to mentors to guide and assist them in areas such as programs, chapter volunteers, leadership, succession planning.

22. NCMA Board Meeting Oct 2006 22 CHANGE RESISTANCE Issue: How do we explain this Governance change to the Chapters ? Mitigation – –Review BoardSource Twelve Principles of Governance Charts 4 to 6 provide characteristics of Exceptional Boards –Our current approach has brought many excellent people to Board But only randomly addressed strategic objectives –No pressure to find viable candidates in each region each year –Consideration of multiple candidates from any region each year –Allows Association leadership (Presidents and Board) to ensure the Board is aligned to strategic objectives –Allows Board to select Association Officers like Benchmarked Associations

23. NCMA Board Meeting Oct 2006 23 BOARD TOO EXCLUSIVE Issue: Is the Board trying to limit diversity and create an exclusive club? Mitigation – –Reverse of question is THE goal. –Want to address diversity using a broader spectrum of considerations –Changes focused on advancing Association objectives –Chapter Presidents have broader choices in National election

24. NCMA Board Meeting Oct 2006 24 Others??

25. NCMA Board Meeting Oct 2006 25 Recommendation President direct Governance Committee to prepare By-Law change and transition plan to accomplish proposed changes that reflect today’s dialog Board participate in November special telecon meeting to discuss further Board vote in December –By-Law change –Nomination & Election Policy revision