Changes in the boardroom

Role of corporate directors more demanding, conference told

By Mark McNeil The Hamilton Spectator

Gary Yokoyama, the Hamilton Spectator Dr. John Evans told the assembly at the 25th McMaster World Congress that board directors in general are taking a more active role -- and face more scrutiny -- than in years past. Being a director of a corporation used to be a lot easier. Dr. John Evans, the chair of Torstar Corp. who spoke at the McMaster World Congress yesterday, said his first experience as a board member 35 years ago -- at Dofasco -- involved very little effort. There would be an hour or so of discussion about the last quarter results and "then the chairman would start looking at his watch because it was time for lunch... and that was really the substance of being a director of a major steel company. That was the essence of corporate governance at that time." But times have dramatically changed, he said, both at Dofasco and throughout the corporate world. Board members are taking far more active roles and they are also being held up to increasing scrutiny. The whole area of corporate governance has become a hot topic in the wake of numerous financial scandals of recent years. This year's 25th McMaster World Congress at the Hamilton Convention Centre is delving into leadership and management issues surrounding corporate governance, as well as knowledge management and e-commerce. The convention continues today and tomorrow. Evans said, "the quality of corporate governance is really a function of good directors, good processes, and much more intense financial oversight." As well, he said, there needs to be a balance of independence and partnership between the board and the CEO. Evans, who has had experience on numerous boards -- including Torstar, which owns The Hamilton Spectator -- said board members need to have integrity to gain the respect and trust of their fellow directors and they need to be confident enough to express a dissenting point of view. They must not have conflicts of interest and be willing to "devote a share of time and a share of mind to the needs of the corporation," he said. "Good directors are not born, and experienced directors are in great demand. Boards need to find ways to help directors to grow and that can be done with ... training, personal coaching, and a regular constructive evaluation of their performance. "It is very different from that board lunch that I described at Dofasco 35 years ago," he said in his keynote address, noting that Dofasco in more recent times "has become a pioneer in developing an outstanding quality of corporate governance." Evans was a member of Dofasco's board for more than 20 years. He contends that "directors (in general) are much more open to the idea of trying to enhance their effectiveness because they recognize the seriousness of the responsibilities that they face in those roles." But McMaster business professor and conference chairperson Christopher Bart said, "there are fundamental issues here. Directors and boards seem to be afraid to ask tough questions and there is this sense that many of them have been asleep at the switch." In some cases, he said, CEOs are co-opting boards to become their agents, rather than being agents for shareholders. "When we see directors micro-managing, rubber stamping, sending conflicting messages to staff, grappling with indecisiveness, consumed by trivia, and literally operating in a state of chaos, one has to ask: Do they know what to do?" mmcneil@thespec.com