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To illustrate how the Watchdog, Trustee, and Pilot roles operate, we

use an example of how the board of Company X would address


issues of workplace safety in an industry where safety was a major
risk.

The Watchdog The watchdog mode includes what might be termed


as total oversight package. In this role, the board serves as the
monitor of the process of corporate activity in all its spheres. It is
not necessarily considered as a passive role, and can take an active
role as well. The board may take an active stance in setting up
mechanisms to monitor a variety of issues on a regular basis, and
with more or less detailed scrutiny. However, watchdog role
implies a post-monitoring assessment, primarily in terms of how
successfully the corporation conducts its business. The watchdog
board has the most limited overall role, focusing primarily on
monitoring and evaluating strategy in a post-monitoring mode.
However, this role could be effective if the following conditions are
met:
a) Directors are satisfied that appropriate systems and policies are
in place and have been demonstrated to be effective. The
important point is demonstration or evidence of effectiveness
rather than just the assurance of the CEO.
b) Directors are satisfied that information reported by the CEO
includes relevant indicators and other information that directly
reflects the integrity of safety and security systems.
c) The CEO is willing and able to guarantee that appropriate safety
systems are in place and they have been tested and found to be
robust.
d) Contingency and business continuity plans are regularly reviewed
and tested and the results reported to the board.
e) Directors are able to exercise critical and independent judgment.

The Trustee Another approach may be characterized as a trustee


role, which suggests that the boards serve as a guardian of assets.
Whose assets? The board as trustee would be accountable to
society, including the shareholders, for the assets used to create
corporate value. Thus, the trustee is responsible for ensuring that
corporate activities enhance, or at least avoid depleting, assets
employed in its business, such as labour, natural resources,
finances, other organizations, community stability, public trust, and
national security. Implicit in this role is the sense that the trustee is

responsible for evaluating what the corporation defines as its


business, as well as how well that business is conducted. Although,
board of director as a trustee plays an active but limited role in the
initiation and implementation of strategy and is substantially
involved in analyzing options, monitoring, and evaluating results.
If Company X was in trustee mode it would be more actively involved than
a watchdog board but still confirming management decisions. This
involvement would be limited in the initiation and implementation of
safety systems but substantially involved in analysing options, monitoring
and evaluating results. The following actions would be undertaken in this
mode:
a) With input from the CEO the board would give direction to senior
management to develop an appropriate safety and risk
management system. The board would set the parameters and
expectations and allow senior management to develop the detail.
b) Directors would be actively involved in analysing options in the
safety strategy.
c) The CEO would implement the safety systems and the board would
be intimately involved in monitoring progress and evaluating the
results.

The Pilot The Pilot approach takes an active role in directing the
business of the corporation. A Pilot board is active, gathers a great
deal of information, and takes on the decision roles like senior
management, actively formulating and, perhaps, initiating strategy.
Using the Company X perspective, the board would be making more
decisions than in the other modes such as the following:

a) Deciding what constitutes a safety system and what is to be


installed;
b) Determining the degree and method of integrating systems with
customers;
c) Actively analysing options;
d) Deciding how and when to implement changes to the safety system;
e) Detailed monitoring of the safety systems, even when there is no
evidence of problems;

f) Close scrutiny and evaluation of the systems.


Pilot mode could be appropriate in situations where there was evidence of
significant issues or after a safety issue had occurred and the board felt
the need to directly intervene. Pilot mode would be more time consuming
and involve greater degree of involvement by directors.