Philosophically, the Board should always question, and never accept at face value what any committee or management team says.


On a more operational level:

1. The Board must approve both capital and operating budgets. When management operates within those budget (with their embedded assumptions, hurdle rates, and constraints), then management should be allowed to operate to those agreed levels.

2. When assumptions, hurdle rates or constraints change, then the Board is warranted (must) review the budgets (or specific deals/opportunities) to satisfy themselves that they are still commercial, relevant and carry suitable risk exposure.

3. The Board should continuously review the competency of the corporate acquisition team - and the best way to do that is by the team's ability to deliver to promise (i.e. capital and operating budgets).

4. Any/all acquisition variation from budget must be approved by the Board. The Board should then review the root cause of the variation - some variations are legitimate while some surface inefficiency, lack of experience or poor judgement.

5. Even highly experienced and capable acquisition teams make mistakes when they are forced to deal with a situation in which they have no or little experience - hence the need for on-going monitoring.

6. One strategy is to have the Board form an Acqusitions sub-committee if acquisitions are sufficiently large or sufficiently frequent. One or two Board members participate in the deliberations of the Acquisition team (most often as observers) but receiving all minutes, reports and evaluations. Thus Board oversight becomes more focussed; board representation becomes more transparent; and accountability more evident.

7. Board oversight assumes that the Board has the experience necessary to provide relevant oversight - that is not always the case.