Corporate & Family Governance

Board Activation

Board, Board Committees Composition, And Nomination

The company’s professional Board is the steering wheel for the General Assembly and a key player in the governance journey. The effectiveness of the company’s Board of Directors is a mere reflection of the organization’s performance. LOGIC Consulting adopts a methodical approach to conducting the Board composition exercise, it usually follows a thorough understanding of the company’s strategy, operational dynamics, organizational culture, owners’ aspirations, and the current expertise and backgrounds of the existing board members. Such elements form a solid foundation for establishing a professional board that reflects the real needs of the organization and most importantly the owners’ vision and mission. This approach ensures multiple benefits;

1. board size (number of board members) for an effective decision-making process
2. harmony of the members as a team and collective brainpower
3. the existence of the needed expertise on the board that ensures achieving business sustainability objectives.

LOGIC Consulting possesses a Board Members’ database that includes qualified candidates with cultivated Board experience, reputable in the business environment, governance savvy, strategic thinkers with strong business acumen, and a broad business horizon. Said database provides the consulting team with an array of experiences that are matched with the identified board seat requirements of each organization. Worth noting that the nominations of the Independent Directors needed on Boards, along with a restricted number of shareholders and non-executives are made unbiasedly and professionally during the composition and nominations exercise.

An integral part of the Board composition is the establishment of the required board committees, whose members are assigned from the approved nominated Board Members. It is usually preferred that committee nominees are from the Independent Directors to avoid any conflict of interest.

The number of committees that need to be established depends on the organization’s needs and maturity. Committees conduct preliminary studies and discussions for specialized matters, depending on each committee’s scope: Financial and Operational compliance through the “Audit Committee”, Risk Mitigation management through the “Risk Committee”, Board, CEO and C-1 succession, remuneration in the “Nomination & Remuneration Committee” and Governance compliance in the “Governance Committee”.

Board And Committee Charters

Staying up-to-date with the changes in governance practices illustrated in the governance codes, LOGIC Consulting ensures updating the Board and Committee charters to comply with the most recent updates. Based on the Board and Committee composition for each organization, LOGIC Consulting ensures that the Board & Committee Charters incorporate each organization’s board and committee specifics outlining scope, roles, responsibilities, dynamics, authorities, and rights of Board and Committee Members.

Authorities’ Identification

Corporate Governance calls for synergizing relationships between the organization’s management, the Board, shareholders, and all other internal and external stakeholders. The Authority Matrix is a document that lists all critical decisions made by Governance Stakeholders including General Assembly, Extra-Ordinary General Assembly, the Board, Chairman, CEO, and the External or Internal Auditors, clearly illustrating all critical decisions’ primary, secondary and final approval owner(s). Said decisions include but are not limited to Investments, budgets, company purpose, change in the company’s bylaws, Asset management, board members’ election & termination, key financial decisions, and more. This document also ensures the avoidance of any conflict of interest or the overlapping of responsibilities as mandated and stipulated by Corporate Laws or Governance Codes and protects stakeholders from any legal or financial liability.

Board Evaluation And Performance Enhancement

paragraph: Building upon the firm belief that organizations need to adopt a continuously progressive mindset, the Board of Directors is required to consistently maximize its performance to improve the company’s performance and ultimately achieve the shareholders’ interests. LOGIC Consulting designed a tool that enables the board to run an annual evaluation on the board dynamics covering 12 critical pillars of effective board practices as per the Code of Corporate Governance. The tool is applied by conducting 1-2-1 interviews with each Board Member separately, to obtain their independent evaluation on each aspect. The results are then consolidated, analyzed, and interpreted to generate an action plan for improvement. The Chairman of the Board is the custodian of this process to ensure the implementation of the improvement actions. Its generally advised that such evaluations are conducted by a third party to ensure the objectivity of the evaluation and the generated action plan.

Board Reporting

To ensure that the board receives periodical reports to support board members in their decision-making process, LOGIC designed The Board Reporting Kit to include a set of reports that balances the information being addressed at a board level and avoid the common practice of Boards discussing mostly financial matters. That said, the Reporting kit comprises the following reports:

1. Strategy Progress
2. Key Financials (income statement, balance sheet, and cash flow)
3. Internal Audit
4. Risk Register
5. Board Allowances & CEO and C-1 remunerations
6. Succession Planning, (7) Corporate Governance Compliance.

Worth noting that LOGIC Consulting orients all reports’ owners on the functionality of the report and the frequency of issuance.

Control Environment

Internal Audit Structure

Organizations’ Control Environment is a vital pillar of governance and business sustainability. The Control Environment should be designed efficiently to avoid any conflict of interest amongst stakeholders and to protect the company and the shareholders from possible leaks, fraudulent acts, or breaches of policies, procedures, laws, or codes.

LOGIC Consulting team revises and designs the Control and Audit structure and functions required for the organization which is:

The Internal Audit department structure, reporting line, and independence. The Audit committee composition and independence. The qualification required for the incumbents of the Audit related jobs. The relation of the company’s audit functions (Internal Audit on an operational level & the Audit Committee on a board level) with the External Auditor.

LOGIC Consulting team orients and delivers an Internal Audit register and report to the appointed Internal Audit Manager, ensuring a full knowledge transfer on its functionality, types of analysis generated, the importance of data interpretation, and frequency of issuance.

LOGIC Consulting founded its customized performance evaluation systems based on two pillars: “The What” indicating the individual’s SMART objectives, and “The How” indicating the individual’s behavioral competencies represented while achieving their objectives. The implementation of said pillars includes the management process’ policies and procedures write-up, illustrating the criteria that link the individual’s actual performance with their development needs, and other criteria linking the achieved individual performance rating with their annual salary increase percentage.

Our Management Consulting Team In Action

To ensure the effective implementation of the Performance Management system, LOGIC Consulting conducts workshops to train eligible managers on how to develop SMART individual objectives, how to conduct effective appraisal sessions that lie in providing constructive feedback on both the achieved objectives, the demonstrated behavioral competencies, and recommending development initiatives.

When the scope of an assignment includes a “strategy cascading exercise”, the business management consulting team supports management in developing individual objectives, identifying measures, baselines, and measuring tools.

To support the management’s decision-making process in people-related transactions, LOGIC Consulting designs an individual performance consolidation sheet for data entry of the total population’s actual performance results including average objectives achievement percentage, and competencies average percentage.

ExCom and Succession

Executive Committee Formation

The Executive Committee (ExCom) is the forum where the Board-approved strategic directions are translated into business strategies, implemented, monitored, and executed. The board ideal ExCom operates using tools and techniques that allow it to reach the highest strategy monitoring and implementation efficiency.

An ExCom is considered effective, is when discussions do not take a vertical direction, i.e. each ExCom member discusses operational matters related to their discipline, but rather when ExCom discussions are more horizontal and address the achievement of the company strategy as one team.

That said ExCom discussions and agendas target cross-functional topics such as; strategic initiatives progress and challenges, control environment improvement plans, risk mitigation plans, organization culture-related issues to maintain a healthy and productive working environment, C-2 succession plans, and others.

To overcome the long-standing challenge of almost all organizations, LOGIC Consulting adopts a methodical approach to form executive committees and identify the right profiles for the jobs, and that is usually done through discussions with the CEO.

The ExCom Capacity Building

Building upon LOGIC Consulting’s capacity-building approach, we ensure that the ExCom members are aligned with their roles and their responsibilities towards the Board of Directors.

This is done by customizing the ExCom Charter and presenting it to ExCom members illustrating; the scope, roles, responsibilities, authorities, and critical topics that are discussed in ExCom meetings. ExCom members are also enrolled into the ECM (Executive Committee Members) Program for 5 days covering the following modules: Forming Executive Committee, Effective Meetings, Aligning & Cascading the Business Strategy, Driving Organization Performance through KPIs, Establishing PMO & SMO, Identifying & Mitigating Risks, Organization Culture, Corporate Performance & Dash Boards and Risk Management.

Succession Planning

Succession is a vital aspect to ensure business sustainability. Succession also assures investors and strategic partners of the sustainability they are promised, even with the absence of the owner or the leader in charge.

Succession is a topic that is highly advocated, discussed, and monitored on the board level.

Succession planning is usually dependent on the maturity of the HR systems of the company and its talent strategies, with which succession plans need to be tightly integrated.

LOGIC Consulting sets the succession guidelines to the HR managers of organizations, which serves as a step-by-step guide during the succession journey, ensuring that all steps, tasks, stakeholders, incurred costs, reports, and other factors are well considered during the succession planning process by all stakeholders.

Transparency

Code Of Conduct

The code of business conduct in our management consulting services are designed to set certain standards of conduct for all stakeholders in an organization including owners, employees, suppliers, clients, board members, and service providers on behalf of the company.

The Code of Conduct specifies the business principles by establishing certain non-negotiable standards of behavior in key areas amongst all stakeholders.

Companies need to have clear guidelines and rules on their identified set of values when dealing with matters that may be understood or defined differently by different people as transparency, conflict of interest, hiring relatives, accepting gifts, dress code, protecting the work environment, and other elements of the organization.

LOGIC Consulting offers a Workshop to ensure the Organization’s code of conduct is aligned with its values and principles.

Contrary to the widespread common belief that modern corporations are being widely run by external professional managers, many of the world’s organizations continue to be controlled by families and many of which are successful and sustainable to our contemporary days.

Family businesses have historically grown with extensive time, effort, and investments from their owners, which heightens their sense of ownership of their business and responsibility towards their family business. This responsibility created a need for a formal approach to govern the relationship between the family and the business and to ensure, not only the business sustainability but also the preservation of the family bond and legacy across generations.

Exit Policy and Dividends Distribution Policy

Exit policy and Dividends distribution Policy answers the question of what percent should family members deduct from their distributed dividends to be compiled in an Exit Fund to be used in the cases when family members wish to exit and the other family members cannot afford to buy his shares, hence protecting the family from being forced to part their equity with an outsider.

Recruitment Policy

Recruitment Policy answers the question of whether family members should work in the family business or they are free to pursue different aspirations. And if they wish to join the family business, do they join immediately after graduation or should they work outside of the family business for a few years?

Education Policy

Education Policy answers the question of what percent should family members deduct from their distributed dividends to be compiled in an Education Fund and eventually invested in the education of the young generations of the family.

Charity Policy

Charity Policy: answers the question of what percent should family members deduct from their distributed dividends to be compiled in a Charity Fund and channeled to charity initiatives in the name of the whole family.

Conflict Of Interest Policy

Conflict of Interest Policy. Answers the question of whether a family member is allowed to be active either in the capacity of “an employee, or in the capacity of an investor, or to establish his own business” in activities related, directly or indirectly to the family business. And if so, what are the rules and principles to doing so.

Family Succession Planning Policy

Family Succession Planning Policy: Answers the question of whether the founder / CEO successor will be a family member or a non-family member, and if a family member, then what is the criteria for choosing the family CEO successor, and what are the grooming and development strategies for family members to grow in the organization.

Family Institutions is a key success factor for the implementation of the Family Constitution as they serve as the formal platform where all Family Members come together to discuss matters that address both; business and family matters. Family Institutions are divided into two types: Family Assembly and Family Council. The latter is only established when the family members exceed 25 members.

During the Family Constitution workshops, LOGIC Consulting designs the structure and composition of the family forums depending on the size of the family and their overall mindset and culture, hence the following decisions are made;

• Family members’ selection criteria for attending the Family Assembly and Family Council meetings.
• Family Institutions’ topics and activities.
• Family Institutions logistics (meetings frequency, meetings minutes, activities follow up etc).
• Family Members criteria for growing into Board Members.
• Family Patriarch detailed profile (characteristics and competencies) for succession purposes.