Testimony of Bernard Claude

Bernard Claude likes to point out that the proper functioning of a Board of Directors is based on three essential questions:

Do we have the right people around the table?

Are we dealing with the right subjects?

And is the coordination of the Board of Directors efficient?

If one of these three pillars is missing, board governance will not really be a growth tool for the company. Let’s study with Bernard Claude the modes of coordination that make the Board of Directors effective.

How often do you recommend that the Board of Directors meet?

Six meetings a year seems to me to be a minimum. If the Board of Directors is to be truly effective, it must be given sufficient time to discuss important company issues. For example, I don’t think it is possible to hold meetings for just two hours.

How to effectively facilitate the sessions?

The Board of Directors meeting can be divided into three parts: a review of the current situation with the key points, the decisions to be taken presented by management (including the formalism incumbent on this body such as the approval of the accounts) and finally a subject of strategic substance for the company among those identified. For this reason, 4 hours are necessary, as the risk with meetings that are too short is that strategic subjects are not discussed in depth and that the Board of Directors takes decisions that have not been sufficiently worked out.

This organization requires a work schedule to be defined at the beginning of the year and, in particular, to identify the strategic subjects that the Board will deal with in depth, such as risk management, budget, strategy, HR and remuneration policy, etc.

I would remind you that the Board of Directors is responsible, among other things, for validating the company’s strategy and “monitoring” its execution. It is not intended to be a control body but rather a structure to support the strategy. For this mission to be fully fulfilled, it is necessary to be sure that it deals with fundamental issues and not only validates the company’s indicators.

How can the sessions be prepared in advance?

Once the Board has defined the company’s 5 – 6 fundamental issues, management should work with the lead directors to prepare the Boards dealing with the topics. In this way, it becomes a form of governance that lives on between Board meetings with directors who are more involved in the development of the company. A genuine dialogue can thus be established between directors and management. This also leads to constructive dialogue between directors throughout the year. Indeed, the worst thing would be for the directors to discover the fundamental subjects of the company during Board meetings because they would not be able to contribute effectively and take the relevant decisions. It is my custom to tell managers that they must use their 24/7 governance.

Do you have any good practices to recommend to promote the flow of information to directors?

First of all, I would like to remind you that the Chairman, and not the Chief Executive Officer, is responsible for running the Board of Directors. I remind you of this because in small companies the functions are often combined. So the CEO must therefore allow the Chairman some time!

Behind the question of information lies in fact the subject of training for directors. If the people around the table are not trained, it will not be possible to get the best out of them. It is therefore essential that directors know the company’s business, sector and market issues, even if for some of them they should not be specialists in any way. It is up to the Chairman of the Board of Directors to ensure this good knowledge and understanding. This can be achieved through presentations of the company’s production tool, exchanges with key managers on working methodologies or training on the issues at stake in the sector.

Do you advise the implementation of internal regulations for the Board of Directors?

Absolutely, it provides a framework. It is also a tool for recruiting a new director because it is the marker of structured governance.

The internal regulations provide a common working reference framework for all directors. They must deal specifically with the functioning of the Board: number of meetings during the year, method of participation of directors, confidentiality, specific role of certain directors, etc., and lay the foundations for effective functioning. It should not be forgotten to mention that one of the Board’s annual meetings should be devoted to its self-evaluation!