Corporate Boardbound Workshop—February 9, 2023

Summary

Summary of Homework

  • Read articles regarding regarding Human Capital from the perspective of the whole board and of the Compensation Committee.

  • Develop list of your target companies.

  • Prepare Otter Tail Corporation case study.

  • Come to February meeting prepared to discuss your target companies and the case study.

Preparation

Basic Pre-Reading

  • “2023 Governance Outlook” by NACD who has kindly provided on a complimentary basis to non-members. Pages 8-13 “The Board’s Role as Stewards of Human Capital” are especially relevant to this workshop discussion.

  • “Human Capital: Key Findings from a Survey of Public Company Directors”, Harvard Law School Forum on Corporate Governance, posted by Stephen Klemash, Jennifer Lee, and Jamie Smith, EY Center for Board Matters, on May 24, 2020.

  • The Compensation Committee is a committee of a company’s Board of Directors which has the primary responsibility of reviewing and approving the compensation of the company’s CEO and other named executive officers. In addition to this responsibility, the committee also oversees the company’s equity plans and reviews and makes recommendations to the Board at large regarding these plans. Both the NYSE and NASDAQ have created requirements for companies which mandate the committee members be “independent.” of management and the company.

Optional Pre-Reading

Homework Exercises

Target Companies—name at least 5 target companies to explore for your potential board position along with your value propositon for each company. Your next board opportunity may be an opportunistic one from your network. However, clarifying your thinking about specific companies you are a good match for can sharpen your networking and preparation for board opportunities. You can use the portion of the Search Strategy Plan (downloadable) dealing with target companies. Be prepared to share your target companies in the first breakout session. You never know when a cohort member may have a valuable connection to the company you are targeting.

Case Study—there will be three case studies during the Corporate Boardbound program. The purpose of the case studies is to give you practice evaluating companies to determine whether you are interested and prepared to join their board. Ideally, you would prepare a case study for each of your top target companies. In preparation for the July workshop, you will select one of three case studies covered in Corporate Boardbound and prepare for a mock interview.

For the February workshop, the case study will be on Otter Tail Corp. (NDQ: OTTR).  Otter Tail is a holding company engaged in the energy, infrastructure, and production businesses. It operates through the following segments: Electric, Manufacturing, and Plastics. The Electric segment is involved in the generation, purchase, transmission, distribution, and sale of electric energy in western Minnesota, eastern North Dakota, and northeastern South Dakota. The Manufacturing segment consists of businesses in the manufacturing arena, including contract machining, metal parts stamping, fabrication, and painting, and the production of plastic thermoformed horticultural containers, life science and industrial packaging, material handling components, and extruded raw material stock. The Plastics segment offers businesses that produce polyvinyl chloride pipes at plants in North Dakota and Arizona. The company was founded in 1907 and is headquartered in Fergus Falls, MN.

Let’s set up a role play for this case study. You have had an initial phone interview with Karen Bohn who chairs the Governance Committee. You are now invited to a second interview.

These resources from Value Line and Reuters may be helpful to you, as well as the company’s proxy.

Please be prepared to respond to the Nominating and Governance chair’s questions which could cover a wide range regarding the company’s strategy, competitive position, risks and the specific value you would bring to this board. One interest is whether you think the company’s CEO compensation plan is fair and would attract a new CEO when succession is needed.    

Your Profile on Director Databases—Hopefully, you have submitted your Board Bio and Resume to boardbound@womensleadershipfoundation.org. The value of doing this is we will utilize it for our Boardconnect program and it will be posted on our website under “Resources: Corporate Boardbound Participants”.  Now, it is time to get word out that you are ready for board opporunities. We have compliled a list of great places to post your profile for board opportunities here.

Agenda

Learning Objectives

  1. To understand the board’s role in ensuring strong Human Capital to execute a winning strategy.

  2. To understand the responsibilities of the Compensation Committee and best practices of CEO succession.

  3. To feel confident that you can evaluate companies and conduct due diligence to evaluate whether you are interested in serving on their board and, if so, prepare for an interview.

  4. To clarify your best match for board opportunities by developing your list of target companies.

Location: Zoom Here is the link to the video of the session.

Opening begins at 4:30 pm

Welcome and Purpose | Karen Hyde

Sharing Target Companies | Breakout Session

Board’s Role re Human Capital

CEO Leader, Compensation, Culture | Deloitte with Abby Dunleavy and Lauren Choate

Discussion and Sharing Insights | All

Break

Board Journey

Otter Tail Corporation Case Study | Breakout Session

Debrief and Summary | Kate Frazier and Sue Williamson

Thanks and Closing

Breakout Facilitator #1—Sue Williamson

Breakout Facilitator #2—Jo Lynne Whiting & Bill Heck

Breakout Facilitator #3—Polly Buster

Breakout Facilitator #4—Kate Frazier & Karen Hyde

Breakout Facilitator #5—Georgia Phifer

Breakout Facilitator #6—Gloria Zamora