Aon-Mint Best Managed Boards Study

Best Managed Boards Study | Our Approach

A. Objective

The objective of the Study is to identify and recognize organizations that display high standards of board governance. The purpose of calling it Best Managed Boards is to define the set of characteristics and principles that boards display which make them effective in the discharge of their core responsibilities. The study aims to evaluate the effectiveness of boards on some of the following core responsibilities / operational dimensions of a board

Board operations through its balance of independent, executive and non executive representation and collation of different skills and competencies. The extent of capability building within the board and its focus on ensuring independence in all its transactions
Board's role in strategy development and informed review of strategy on an ongoing basis
Board's role and effectiveness in driving a strong and desirable corporate culture and promoting effective governance standards

Active role of the board in monitoring and evaluating performance and pay of critical executives
The stewardship function of the board in protecting the stakeholders interests and the organization
Increasingly there is acceptance within organizations and government on the need and importance for evaluating board effectiveness with global organizations making it a discipline from being a choice. Companies Act - 2013 and changes in the Clause 49 of the listing agreement includes step in this direction.

B. Study Approach

The study will be divided into five broad phases:

1. The invitation / solicitation phase where a set of target organizations would be invited to participate in this exercise. These organizations would be invited based on a set of core principles for determining eligibility for participation namely, there should be no qualification to accounts against the company and No delay in filing of any returns with the exchange by the company.

2. Collation of company specific data on board and governance practices - this will primarily be focused on collation of a mix of data from public sources (board structure / committees / constitution etc) and some questionnaire based analysis - where the focus of the questionnaires would be to collate board practices around

Evaluation of boards role in organizational strategy setting and performance evaluation / guidance
Evaluation of board processes / level of information provided / requested / analyzed by the board
Evaluation of meeting attendance / sharing of meeting agenda
Compensation for directors and approach for determining compensation
Training / education programs attended by board / committee members

3. The third phase will involve a first level short listing of organizations basis information gathered in the previous stage. This will be a short list of approximately 40% - 50% of the companies who had registered for the survey

4. The fourth stage would focus on analyzing self and external assessment of the performance of the board. This will be done through two exercises

A self assessment questionnaire will be administered to board members where they will be expected to respond on how well they individually believe the board is able to function and drive governance in the organization
A group styles inventory where an external assessor would evaluate, on the basis of a set of interactions / questionnaires, the effectiveness of the board as a team

5. A summary of the results from the second and fourth stage would be presented to the jury. The jury will select 5 / 10 of the best corporate boards to be recognized through these awards.

C. Jury Selection and Role

The jury will play a critical role in providing credibility to the study as well as in eventually deciding who the final list of awardees might be. The jury will be involved at the following stages of the process

  • The finalized approach and timelines for the study will be shared with them for their in principle approval and commitment of time
  • The final list of participants will be shared with them once the solicitation process is completed
  • The questionnaires being sent to the company in the third phase of the process will be sent to them for their knowledge and approval
  • The first short lists along with the rationale would be shared
  • The jury would be brought in for a 1 / 2 day workshop where they will evaluate the final list of participants to select the winners
  • Participation in the awards event

The members of this jury should ideally be nominated based on the following broad parameters

  • Representatives from BSE and NSE (Chief Executives)
  • Representatives from academia
  • Representatives from the corporate world - senior and ideally not involved in active management of possible participants
  • Legal experts / representatives from the government / Planning Commission etc
  • The members of jury in our last edition included Mr Y H Malegam (Chair of the Jury), Mr Philip Armstrong, Mr Anil Singhvi, Mr M Damodaran, Mr Janmejaya Sinha and Mr Sanjay Nayar.
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