TORONTO, Jan. 28, 2015 /CNW/ - The Institute of Corporate Directors (ICD), Canada's national association representing directors and boards, calls on boards of directors to institute regular and substantive evaluations of board composition and board member performance, and commit to following through when necessary by having "tough conversations" with underperforming members or directors whose skills do not align with the organization's strategy. In doing so, directors can foster high performing boards in a way that is not possible by relying solely on term limits, which the ICD believes are blunt tools that may limit flexibility and eliminate effective as well as non-effective directors.
ICD expands on these views in a recently published position paper, Beyond Term Limits: Using Performance Management to Guide Board Renewal. In this paper the ICD provides a framework for boards to build a renewal process that increases accountability and achieves the right mix of skills and experience to create long-term effectiveness.
"Large investors and activist shareholders are sending the implicit message to Canadian companies that they must do a better job renewing the board or the investors will seek to do so for them," said Stan Magidson, President and CEO of the ICD and Chair of the Global Network of Director Institutes. "While the ICD is a staunch proponent of the continuous upgrading of organizations' boards, we believe boards must retain discretion to preserve vital institutional memory of high performing and contributing members, which simply cannot be done with externally imposed term limits."
In the Beyond Term Limits paper, the ICD proposes an alternative method to term limits that seeks to enhance board composition and foster higher performing boards and stronger organizations. Among ICD's recommendations are the need for regular board composition reviews and director evaluations.
The full paper can be viewed at: www.icd.ca/policy.
About the Institute of Corporate Directors
The Institute of Corporate Directors (ICD) is the definitive 'go-to' resource and voice for Canada's directors and boards in the for-profit, not-for-profit and Crown sectors. As the national community for directors, the ICD is a not-for-profit, member-based association with more than 9,000 members and a network of 11 chapters across Canada. Representing the interests of directors, the ICD fosters the sharing of knowledge and wisdom through education, professional development programs and services, and thought leadership and advocacy to achieve the highest standard of directorship. For more information, please visit: www.icd.ca.
SOURCE Institute of Corporate Directors (ICD)
For further information: Media Contacts: Maliha Aqeel, Director, Communications, Institute of Corporate Directors, Tel: 1-877-593-7741, ext. 229, Email: [email protected]