I recently served on a governance awards judging panel assembled by the Canadian Society of Corporate Secretaries (CSCS). Winners of the awards were announced at this organization's annual conference in Halifax last month. I participated in a plenary discussion to discuss some of the winning practices.
Here are the six award-winning companies, the categories under which they won, and their governance practices and results that they have that are, in my view, exemplary. In no particular order:
Shoppers Drug Mart: Best practices in managing boardroom diversity
•Five out of eleven Directors are female, with two of three women Committee Chairs
•Continuous review of a robust director competency matrix, including focusing on board dynamics and decision-making
•Detailed director recruiting using precise director profile output resulting from the competency matrix assessment
•Board does not require CEO experience, and Board recruits and appoints first-time Directors
•Prospective Directors includes individuals not previously known to incumbent Directors
•Rigorous director interviews, including assessing capacity for constructive challenge, and comprehensive, tailored onboarding process
•Limits on board tenure, over-boarding, and interlocks
Bank of Montreal : Best use of technology in governance, risk and compliance
•Board portal with encrypted materials on a secure intranet site, secure email, user friendly interface, paperless iPad, and separate Director education iPad App
•Global entity records and management systems, with searchability, real time accuracy and updates, customization, validation, aggregation, and comprehensive, enterprise-wide compliance monitoring and reporting
•Investor relations alerts, conference calls and audio webcasts
•Ethics, legal and compliance: interactive, tailored, training annually for select employees, and suppliers, with user guide and follow-up
•Specialized regulatory training for senior management, all other employees, to educate, train, strengthen risk culture, using internal website, mandatory readings and eLearning
•Online governance and director assessment by the Board
BCE: Best overall governance
•Individual annual director elections, majority voting, independent Chair, advisory vote on executive compensation, and director interlock and tenure guidelines
•Internal audit and Risk Manager Officer report directly to Audit Committee Chair
•Electronic voting at annual shareholder meetings
•Comprehensive ethics program, focus on audit independence, and whistle-blowing policy
•Full written governance mandates, board leader position descriptions, education, orientation, and comprehensive board evaluation process and governance disclosure
•Focus on director competencies, geography and performance
Tarion Warranty Corporation: Best approach to board and committee support
•Annual work plan, consent agendas, skills matrix, terms of reference, position descriptions, and board portal
•Third party governance review, including peer to peer review of Directors
•Term limits for Board Chair and Directors, and guideline limits for Committee Chairs
•Six Directors with board certification
•Balanced score card and key performance indicators (KPIs) for company and CEO performance
•KPIs presented to Board at each meeting in dashboard format, and reviewed in depth by Audit Committee
•Stakeholder relations department to enhance focus on stakeholder satisfaction, engagement and communication
Canada Council for the Arts: Best shareholder/stakeholder engagement
•Highly consultative culture and stakeholder engagement, exemplary annual reporting, rotating meetings geographically
•Strategic engagement (financial and non-financial), outreach, dialogue, surveys, consultation sessions and workgroups, with comprehensive, exemplary written shareholder and other stakeholder reporting, follow-up, and use of social media
•Direct Board contact with artists, arts community, partners, leaders and other stakeholders
•Directors as ambassadors at stakeholder outreach events, nationally and internationally
TELUS Corporation: Best sustainability, ethics and environmental governance program
•Board and Committee leadership to monitor corporate social responsibility (CSR), including environmental policies, enterprise energy strategy, ethics policy, whistleblower policy
•Employee, environment and community engagement, culture and performance (numerous examples and leadership)
•Governance Reporting Initiative reporting on CSR performance since 2000, third party reporting verification, stakeholder solicitation, and CSR reporting recognition
•Environment management system since mid-1990s, carbon footprint reporting early adopter, and alignment goal of ISO 14001:2004 compliant by 2014
•CSR metrics integrated into strategic planning, and CEO and other executive performance objectives
•Supplier code of conduct in 2011 for business partner adherence.
It was an honor to serve on this judging panel and the above Canadian companies should be celebrated -- as well as their Directors -- for setting the ever-rising bar for effective corporate governance.
Richard Leblanc is a governance lawyer, academic, speaker and independent advisor to leading Canadian and international boards of directors. He can be reached at rleblanc@boardexpert.com.