Chapter 3

Question 1

TOP TEN PRACTICAL TIPS

Answer 1

1. Balance board composition
2. Evaluate the board regularly
3. Ensure director independence
4. Ensure auditor independence
5. Be transparent
6. Define shareholder rights
7. Aim for long-term value creation
8. Manage risk proactively
9. Follow sustainability best practices
10. Document policies and procedures

Question 2

If all board members have the same level of experience and similar skill sets, you will not find the diversity of opinion required to rigorously challenge the company’s strategy and ensure it is watertight.

Answer 2

Balance board composition

Question 3

Helps you track progress over a period of time and understand where your own strengths lie as well as give you a good understanding of the areas that need improvement.

Answer 3

Evaluate the board regularly

Question 4

Independence is desirable on a board that wants to break away from safe, conservative thinking.
Forward-looking boards need directors that are not afraid to think outside of the box, rather than simply continue down the same road the company has always taken. It helps create innovation and avoid stagnation.

Answer 4

Ensure director independence

Question 5

Undue influence over the work of audit committees and independent auditors is a concern in terms of corporate governance. Investors need to know that they can trust the financial reporting that an issuer makes, so independence is key to show that the reports are accurate and tell the true tale of the company.

Answer 5

Ensure auditor independence

Question 6

The previous point feeds into this one. Transparency is essential for good corporate governance. The openness and willingness to share accurate, clear and easy-to-understand information with stakeholders, including shareholders, breeds trust and solidifies a business’s reputation.

Answer 6

Be transparent

Question 7

Shareholders should know their rights when they invest in your business and you should ensure that the rights you provide are backed up by your Articles of association, constitution and company bylaws.

Answer 7

Define shareholder rights

Question 8

Although short-term wins look good and create opportunities for publicity, long-term value creation should be the aim of a company with solid governance. A business that is committed to sustainable growth is likely to be much less volatile than a company with its eye only on the short term.

Answer 8

Aim for long-term value creation

Question 9

Sustainability and strategic management are increasingly intertwined in the corporate world, as investors make their preferences heard. Major events such as Covid-19 and the climate crisis have thrown into sharp relief the need for a sustainable outlook from issuers. Consumers have also started to prefer shopping with businesses that boast sustainable practices.

Answer 9

Follow sustainability best practices

Question 10

Identifying risks is important, but taking a proactive approach to mitigate that risk before you face it is the goal. Rather than attempting to weather the storm, it is better for the organization to avoid the storm completely.

Answer 10

Manage risk proactively

Question 11

There should be easy-to-access documentation of your policies and procedures relating to shareholder rights, executive compensation, board meeting operation, the election of new directors, and more. This ensures transparency and consistency within the organization.

Answer 11

Document policies and procedures

Question 12

term that describes the situation when the goals of different interest groups coincide.
a concept that refers to the alignment of goals between different levels of an organization or between individuals within an organization.

Answer 12

Goal congruence

Question 13

HOW TO ACHIEVE GOAL CONGRUENCE?

Answer 13

1. Set clear organizational goals.
2. Seek Input from employees
3. Share organizational goals
4. Designate accountable people
5. Align team goals
6. Share progress

Question 14

Goals alignment starts at the top. Get together as a leadership team to discuss the company vision and strategy, and identify the specific goals you want to achieve as an organization. Get crystal clear on your objectives.

Answer 14

Set clear organizational goals.

Question 15

Leaders to seek input from employees about how they can contribute toward organizational goals.

Answer 15

Seek Input from employees

Question 16

Employees who are accountable for a given objective or initiative can help to “ensure you’re meeting and talking when things are off track, so you can ask whether goals need to be reviewed or refined”.

Answer 16

Designate accountable people

Question 17

Clearly defining and communicating organizational goals to all employees is vital, so that everyone understands what they are trying to achieve. Open communication between employees and management can help to identify potential misalignments between individual and organizational goals.

Answer 17

Share organizational goals

Question 18

When developing individual goals, make sure they do align with the organizational goals. This will help to ensure that each employee’s actions contribute to the organization’s overall Success,” regular check-ins between supervisors and team members – and managers and supervisors -Are a useful tool to confirm that employee performance goals are aligned with the team and organizational goals.

Answer 18

Align team goals

Question 19

Visibility and transparency are vital. Once goals have been set, make sure they are visible -Whether Progress toward goals should be examined regularly, not just during an annual review process. Teams need to frequently discuss how they’re contributing toward achieving those organizational goals.
IMPO

Answer 19

Share progress

Question 20

IMPORTANCE OF ALIGNING ORGANIZATIONAL, TEAM, AND EMPLOYEE GOALS

Answer 20

1. Goals set the tone for your organizational strategy.
2. Aligned goals connect employees and teams.
3. Priorities are clarified.

Question 21

Organizational goals communicate what’s important, and employees plan and execute their work based on those benchmarks. Organizational goals take the company’s overall strategy and break it down into manageable chunks, providing checkpoints along the way to reach the overall strategic mark.

Answer 21

Goals set the tone for your organizational strategy.

Question 22

Alignment connects employees and teams to the organization and helps everyone get on the same page. Employees become disengaged when they feel they’re a one-man crew. But when everyone understands how their work is contributing to the organization’s main goals, bonds form as everyone works together towards common goals.

Answer 22

Aligned goals connect employees and teams.

Question 23

Employees have many tasks on their agenda each day, and they’re trusted to choose which should be accomplished first to propel the organization forward. When they understand how each task affects the team and organizational goals, it’s easier for them to choose the job that needs their attention first.

Answer 23

3. Priorities are clarified