On Dec. 16, 2009, the  SEC  issued rules that will require  additional commentary in the preparation of the 10K.  Information calling for director qualifications and  contributions to their respective boards will be required. The  questions that have been raised actually open a discussion at  the board level regarding philosophy of skills and  contributions of individual directors.

This directional change is healthy and will help to ensure  shareholder value. The core of this conversation is centered  around the effectiveness of a governing body. One component  of this discussion is how best to orientate new directors.

The careful development of an orientation program will  accelerate the contributions of these newly elected directors. One of the primary roles of the governance and nominating  committee is to identify and nominate candidates. With this  responsibility comes the additional responsibility to ensure a  transfer of information and knowledge. The crafting of a  successful orientation program should provide a learning  context and establish a strong board culture.

The following may seem obvious, but should be contained in a  formalized curriculum-based program: 

  • A full history of the corporation as well as copies of all  required filings 
  • A thorough review of strategy that is delivered by the CEO  and his or her senior leadership team
  • A full discussion regarding succession planning, with an  appropriate context being set for named executive officers.  Consider dedicating a section of the orientation manual to an  organizational chart that has relevant biographical information  and photographs.
  • A comprehensive review of existing ethics and business- conduct policies. 
  • A comprehensive briefing related to trading policies and pre- clearance for directors and officers to avoid any potential  embarrassment. In some cases, a discussion relating to 10b5-1  trading plans may be helpful, as well as other best practices to  prevent cases of inadvertent insider trading.
  • A full review of established corporate principles that will eliminate potential conflicts of interest.
  • Sharing the charters of the committees with the new  members of those specific panels. Remember that the  functioning of committees is a critical component of good  corporate governance. For example, a practice that is very  helpful is for a new member of the governance and  nominating committee to have dinner with the chair of the  committee, the general counsel, the independent counsel that  serves the committee and the CEO. This meeting accelerates  the socialization process by providing a basis for  understanding of roles and responsibilities for all parties. It  also allows the director to contribute faster to the board and at  a higher level.
  • Inviting the new director to visit locations to develop a  linkage to the work of the organization, increasing his or her  ability to visualize the work flow. One of the benefits of this  effort is providing recognition to the workforce and leaders  who never have visibility at the board level.

Recently a new director described an orientation experience to  me as drinking from a fire hose. In fairness, care should be  taken to balance time consumption with the desire to provide  valuable content. The program that has been outlined in this  column generally requires more than one day, perhaps two or  three half days. But due to the accountability demands of  today, this initiative is an imperative.

While speaking at a Conference for the Society of Corporate  Secretaries, I found the conversations and resulting questions  about board recruitment and culture to be stimulating.  However, one comment stuck out in my mind. A participant  referenced their board’s response to changing regulations as  an exercise that could be outsourced, reflecting a “check the  box” mentality. My view is that, instead, this should be a  meaningful discussion that the entire board understands and  participates in. The danger of not engaging the board in this  important dialogue is that while you may satisfy a rating  company, the board may miss an opportunity to establish key  criteria that will assist in strengthening the board’s culture,  agility and trust.

As we move ahead in this new era of engagement, it is  important that participants in any director orientation program  have an opportunity to provide feedback to the appropriate  governance and nominating chairperson to continue to  strengthen this important initiative.

©2010, All rights reserved. Stuart R. Levine is the founder, chairman and CEO of Stuart Levine & Associates. He also serves as a director of Broadridge Financial Solutions, where he is  chairman of the governance and nominating committee. He is also a lead director for D’Addario & Company.