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          Determining Executive Compensation: The salary and bonus for the CEO (and COO) should be reviewed by a committee (or the entire Board).


          Setting Goals: The Board should help the firm set specific targets and goals and make sure the firm stays committed to achieving these by tracking specific milestones. The Board has a fiduciary responsibility to the shareholders.


          Navigating the External Environment: The Board should provide insight on the external environment within which the firm operates. This insight can include identification of senior hires, acquisition targets, new customers, and eventual exit strategies. (Note: not Marketing!).


          Succession Planning: The Board should play an active role in planning for succession of key senior managers, especially the CEO and COO. Private Company Board should discuss exit strategies for the founder.


          Providing a Reality Check for the CEO: The most important role of a Board is to provide honest feedback to the CEO on corporate strategy, leadership, and management. A strategy-focused organization will achieve success! Success is not only financial metrics, but includes community, etc.


          Additional Thoughts:

        Strategy/Vision is the CEO’s Job, but the Board Reviews/Discusses

        Board should have “hire and fire” CEO responsibility (not my idea)

        Tough times show how good a Board is

        Board members should be fans of the business

        Put hard issues on the table, but don’t toss a bomb into the meeting

        Pay the independent Board members with cash/stock options to align their interest to the company’s interest (e.g. usual range is 0.25 to 0.50% of available stock – e.g. w/500,000 shares, pay with options for 1,250 – 2,500 shares)

        Treat Board with Respect (e.g. always have an agenda in advance, pick up lunch, send car, pay parking, have someone meet them, etc.)


Good website is for the National Association of

Corporate Directors.



McNichols & McNichols, Inc. – P.O. Box 2226Middleburg, VA 20117 – (703) 477-7158

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