Saying Yes or No to Executive or Board Positions

Here is the the final installment of this series. At least while I contemplate more, experience more, learn more, then return with insights from a different perspective. To me, that is the action of, “life-long learning”.

Take Aways:

Analyze the inter-personal dynamics of the board. This, in my opinion, is a key factor in your decision-making.

Requesting information like the examples below is a determining step.

It is a determining step because you will see how the leadership responds to this request. If they are open that can mean a variety of things. If they are secretive or just protective, that also can mean a variety of things.

But that first response is something to recall later when assessing the facts before you.

That response also demonstrates to you the personality of the board and leadership.

  • Request 2-3 year of board and committee minutes.
  • Request SEC or AK Banking and Securities election filings.
  • Read the newsletters and other related publications.
  • Ask directly for information about potential, current, and/or past litigation.
  • Ask about regulatory, administrative, or compliance issues – again – potential, current and/or past.
  • Ask for the strategic plan, action plan, measurements, and reports on progress related to all of the above.
  • Ask how executives or board members report and are held accountable by shareholders through data, on progress toward achieving those goals and justifying the spending of shareholder dollars.
  • Ask if the executives and board are trained on the actual AK Corporate laws, ANCSA, and other contracting/federal laws?
  • Does the board know to recognize whether an agenda item presented by management is in the normal course of business compared to a sweeping organizational structural change?
  • Do board members know when to ask if what they are voting on has other consequences that could positively or negatively impact the family of companies?
  • Do the board members know to ask what is the purpose or motivation for presenting this action item?
  • Why is this a priority for management at this moment?
  • What are the outside or internal pressure points that are making this action item urgent to management right now?
  • What is the methodology that management used to determine this is the best course if action?
  • What was this action item compared with?
  • What were the other options?
  • What were the trigger points that negated those options from being the right course of action?
  • Who all was involved in these exercises?
  • When did these exercises begin, how long did you spend on researching, debating, and coming to a consensus that this is the right recommendation to bring to the board?
  • If this fails, who do you hold accountable for the faulty recommendation?
  • If there is risk of this recommendation failing, what does management anticipate that worst case scenario to be?
  • How did management come to that conclusion?

These are just a sample of the type of documents and questions to request so you can discern the inner-dynamics of the board, and as important, if not more, to have conducted your fiduciary duty and due diligence to meet the business judgment rule which is the threshold in litigation.

I will not go into what are red flags to me, because each of us have varying risk tolerances.

My purpose is to raise awareness of your responsibility to exercise due diligence. These are just a few ideas of where to look and what to ask.

This analysis sometimes becomes more important than what can be extracted from financial statements alone.

That is a whole separate series in itself for another day.

Published by Trudy Sobocienski

My blog, "Beyond Leadership" is a creative place to share my personal feelings and thoughts while working in leadership roles for a variety of Alaska Native organizations, both for and not-for profit entities. An incredible leader and mentor of mine once asked while we were in Washington, DC, "What happened to you between the ages of 7-10 that motivated you to serve in a native leadership capacity". I was struck by that poignant thought and as such, include actual entries from my mother and my diaries beginning in the early 1970's. I enjoy sharing these excerpts because it captures the parallels she and I were experiencing throughout life, from two separate worldviews. Hers as a young mother of four and mine as her eldest child. I have never came across a book on leadership that lays bare a leaders personal feelings, thoughts, hopes, fears and dreams they were experiencing. So for me, my goal is two-fold: 1. Share the incredible life my parents created for my siblings and I growing up in remote Alaska; and, 2) Sharing my humanity, through my personal diaries and journals, while serving as the youngest-ever President/CEO for the Alaska Native Health Board. There are passages that will include significant policy issues I was working on throughout my career and travels. There are many more passages that do not. I cannot speak for my mom's passages, because I am reading them as I share them here, with you; with her permission of course.

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