On the Agenda A tool to help you set your agenda - Center for ...

Canada
In this issue:
A tool to help you set your
agenda
A formal role for boards
A framework for strategy
development
Next steps
Some Recent
Canadian Rulings
In case you missed
Additional resources
Deloitte events
On the Agenda
A tool to help you set your agenda
June 2012
Welcome to the current issue of On the Agenda, where we raise the hot topics that
need to be addressed at your board and committee meetings. We also provide the
relevant resources to allow you to understand how these issues may affect your
organization.
In this issue of On the Agenda, we explore the issues surrounding boards and strategy.
We will consider the evolving role of the board with regards to strategy; steps to
develop an effective strategy; and how to keep the strategic plan top of mind and
linked to each major decision made by the board.
Deloitte periodicals:
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DeloitteLINK
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corporate governance experts.
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A formal role for boards
Traditional governance practices prescribed that boards were responsible for the
company‘s vision and mission, and that management would look after the strategy.
According to this division of responsibilities, the board‘s oversight role versus management‘s
execution role were defined. With the overhaul of governance practices
and processes which has taken place over
the last ten years, there has been significant
movement in these lines of responsibility,
with boards taking on a greater and more
formal role in the area of strategy setting and
implementation. Part 3, section 3.4(b) of
National Policy 58-201, Corporate
Governance Guidelines establishes the
board‘s responsibility with regards to
strategy as follows:
The board should adopt a written mandate
in which it explicitly acknowledges
responsibility for the stewardship of the
issuer, including responsibility for adopting
a strategic planning process and approving,
on at least an annual basis, a strategic plan
which takes into account, among other things,
the opportunities and risks of the business.
The movement to put this guideline into practice is evidenced most clearly by many
boards by the advent of the annual board strategy retreat. However, to be a truly effective
process, discussions around strategy should be linked to each board meeting.
© Deloitte & Touche LLP and affiliated entities. On The Agenda 1

A framework for strategy development
The process for developing a focused and comprehensive strategy clearly calls for collaboration between management
and the board. However, once the two groups have agreed to work together, the issue then becomes
how the board can add value to the process of developing the organization‘s strategy without stepping over the
line and into the role of management in the process.
Included below is a framework which outlines six distinct steps required to develop an effective and collaborative
strategy. The framework also sets out who, management or the board, should take the lead in each step.
Mgmt.
Board
Develop a shared world view
Identify risk tolerance
Current business portfolio
Approve strategic options
Build future business portfolio
Monitor the plan
P
P
P
P
P
P
P
P
P
Step 1— Develop a shared world view—management and the board should share a consistent view of the
world. In developing this shared view, consideration should be given to bother macro issues such as the worldwide
competitive environment in which the organization operates as well as more micro issues such as the organization‘s
competitive positioning, as well as the specific, individual requirements of the organization‘s customers.
Both management and the board will bring specific value to this step in the process: the board by bringing the
individual directors‘ world views and experience, and management by bringing it‘s knowledge of the organization‘s
customers and competitors. In considering this step in the process, it is important to consider the diversity of the
board, to ensure that ―group think‖ does not overrun the process. A diverse board, made up of individuals from
various industry backgrounds, diverse professional backgrounds, and different areas of the world can bring depth
and true value to the process.
Step 2— Identify risk tolerance—having identified a shared world view, management and the board must work
together to establish a risk profile and to determine the risk appetite of the organization. All opportunities have
some risk attached, and without the establishment of the risk tolerance of the organization, solid decisions regarding
opportunities that arise, or the assessment of any strategic option cannot be made.
Step 3— Current business portfolio—identifying the health of the current business portfolio, and determining,
based on this review, which strategic options are viable is the role of management. This is a step in the process
which requires detailed knowledge and understanding of the day to day operations and plans of the organization,
and as a result the board will be unlikely to have the depth of knowledge required to perform this step. Management
should take the lead role and then bring this information back to the board to ensure that all decisions are
based on a consistent understanding knowledge.
Step 4— Approve strategic options—both management and the board must work together to develop a range
of strategic options that fit the capacity of the organization. These options must fit into the framework developed
as a result of steps 1 through 3 in that they are responsive to the shared world view of management and the
board, fit within the risk tolerances developed and be viable for the organization in consideration of the health of
it‘s current business portfolio. Typically, management will develop and outline to strategic options, and will then
bring these options to the board for their consideration and to ensure a clear understanding of the future is understood
by both parties.
© Deloitte & Touche LLP and affiliated entities. On The Agenda 2

Step 5— Build future business portfolio—as in step 3, where management took the lead in identifying the
health of the current business portfolio, in this step, management will again take the lead role in determining how
to build the future business portfolio. Having developed a strategic direction with the board, management should
take the lead in determining how to achieve the strategic alternatives, bringing the options to the board for their
input as required.
Step 6— Monitor the plan—In this final step in developing an effective strategy, the board should take the lead
role, and ensure they the monitor the strategic plan and not just the results. Effective and successful strategic
plans are not static, they must be monitored and altered as the underlying market dynamics change. The board
must keep its‘ eye on the plan, and, in collaboration with management consistently review the plan, the assumptions
used in it‘s development, and the shared world view developed, as current events change the world and the
competitive environment in which the organization operates. Furthermore, working together, the board and management
should set key performance indicators related to strategy, and regularly review these indicators.
Next steps
Having established a framework to develop an effective strategic plan, the next issue becomes how to ensure that
the strategy remains a core focus for the organization as a whole, throughout the whole year, and not just a topic
discussed during the annual board retreat. Strategy and the progress the organization is making towards achieving
their strategic goals should be discussed at each board meeting. To ensure there is a continual linkage back
to the strategy at each board meeting, time should be allocated at the start of each meeting to briefly reaffirm the
strategy among the board members. As well, every significant board approval, whether it be budgetary, operating
plan, capital investment, or executive appointments, should be made in relation to the strategic plan. In this manner,
the organization‘s strategy will remain the core focus for the organization and the objectives established in
the plan are sure to be realized.
© Deloitte & Touche LLP and affiliated entities. On The Agenda 3

Some Recent Canadian Rulings
Released in 2012
March 2012
OSC Staff Notice 51-719 Emerging Markets Issuer review
Released in 2011
October 2011
CSA National Instrument 51-102 (Continuous Disclosure Obligations) Unofficial Consolidation of National Instrument
and Companion Policy for periods relating to financial years beginning on or after January 1, 2011
CSA National Instrument 51-102 (Continuous Disclosure Obligations) Unofficial Consolidation of National Instrument
and Companion Policy for periods relating to financial years beginning before January 1, 2011
July 2011
CSA Notice Amendments to form 51-102F6 Statement of executive compensation and consequential
amendments
Proposed National Instrument 51-103 Ongoing governance and disclosure requirements for venture issuers and
related amendments
CSA Staff Notice 51-334 - Continuous Disclosure Review Program Activities for the fiscal year ended March 31,
2011
May 2011
OSC Staff Notice 51-718 Key considerations relating to an auditor‘s involvement with interim financial reporting
April 2011
CSA Staff Notice 52-328 - Disclosures about accounting policies in the year of changeover to International Financial
Reporting Standards
January 2011
OSC Staff Notice 54-701 - Regulatory developments regarding shareholder democracy issues
Released in 2010
December 2010
CSA National Instrument 51-102 Final: IFRS-Related amendments to securities rules and policies
OSC Staff Notice: 52-719 - Going concern disclosure review
CSA Staff Notice: 58-306 - 2010 Corporate governance disclosure compliance review
November 2010
Ontario Securities Commission issuer guide: Top 10 tips for public companies filing their first IFRS interim financial
report
Revised CSA Staff Notice: 52-306 - Non-GAAP financial measures and additional GAAP measures
© Deloitte & Touche LLP and affiliated entities. On The Agenda 4

Released in 2010 (cont’d)
October 2010
CSA Staff Notice: 51-333 - Environmental reporting guidance
CSA Staff Notice: 52-327 - Certification compliance update
CSA Notice of IFRS Related Amendments to NI 52-107 Acceptable Accounting Principles and Auditing Standards
and certain other instruments
OSC Staff Notice 51-706 Corporate Finance Branch Report (2010)
July 2010
CSA Staff Notice 52-326 - IFRS Transition Disclosure Review
CSA Staff Notice 51-332 - Continuous disclosure review program activities for the fiscal year ended March 31,
2010
April 2010
Request for comment - Proposed Amendments to National Instrument 54-101 Communication with beneficial
owners of securities of a reporting issuer
February 2010
OSC Staff Notice 52-718 IFRS Transition Disclosure Review
Released in 2009
December 2009
OSC Staff Notice 51-717—Corporate Governance and Environmental Disclosure
November 2009
OSC Staff Notice 51-706 Corporate Finance Branch Report (2009)
CSA Staff Notice 51-331 Report on Staff‘s Review of Executive Compensation Disclosure
September 2009
CSA Staff Notice 52-325 Certification Compliance a Review
52-107 Notice and Request for Comments – Proposed National Instrument 52-107 Acceptable Accounting Principles
and Auditing Standards and Companion Policy 52-107CP Acceptable Accounting Principles and Auditing
Standards
May 2009
CSA Staff Notice: 52-320 - Disclosure of expected changes in accounting policies relating to changeover to International
Financial Reporting Standards
CSA Staff Notice 52-324 Issues relating to changeover to International Financial Reporting Standards
© Deloitte & Touche LLP and affiliated entities. On The Agenda 5

In case you missed...
From our weekly Press Review:
(EXTERNAL WEB SITE LINKS - Some sites may require free registration)
Date Publication Article
2012/06/13 Deloitte Moving ahead in an IFRS world Register to our IFRS quarterly technical
update webcast
2012/05/26 International Ethics
Standards Board for
Accountants
Audit Committee Members: IESBA Survey on Audit Independence
2012/05/26 Corporate Board Member
2012/05/25 CPAB
CICA
Engaging with Shareholders: One Size Doesn‘t Fit All
Enhancing Audit Quality: Canadian Perspectives
2012/05/25 IAS Plus Accounting for emission rights an urgent topic for national standard
setters
2012/05/24 The Washington Post The rate of CEO change
Download the CEO Succession Report: 12 th Annual Global CEO
Succession Study (26-page PDF file, Booz & Company Inc.)
2012/05/24 CFO.com Is Reputational Risk a C-Suite Priority?
2012/05/24 The Van Nuys News
Press
Sherman and Campbell Lead Effort To Stop New Accounting Rules
For Leases
2012/05/24 Deloitte U.S. CFO Insights: Cash matters
2012/05/24 OSFI Remarks by Superintendent Julie Dickson to the Trust Companies
Association of Canada Governance Day (PDF)
2012/05/24 The Wall Street Journal Lease Accounting Breakthrough Could Come in June, a CFO Report
2012/05/23 DTTL IFRS in Focus: IASB issues Improvements to IFRSs: 2009-2011
Cycle
2012/05/23 IAS Plus Interview with Sir David Tweedie
2012/05/23 IFAC Eleven Principles for Effective Business Reporting Processes (24-
page PDF file)
2012/05/23 International Swaps and
Derivatives Association,
Inc.
Netting and Offsetting: Reporting derivatives under U.S. GAAP and
under IFRS (36-page PDF file)
2012/05/23 The D & O Diary Emerging Growth Companies: You Have Been Warned
2012/05/23 ASC The Alberta Capital Market: A Comparative Overview 2012 Report
(25-page PDF file)
2012/05/23 Accounting Today PCAOB Sanctions Firm and CPA for China Audits
2012/05/23 CFO.com New Board Will Adapt GAAP to Private Companies
© Deloitte & Touche LLP and affiliated entities. On The Agenda 6

In case you missed...
Date Publication Article
2012/05/22 Cornerstone Research Securities Class Action Filings Involving Accounting Allegations
Increase in 2011 from Low Point in 2010
Download the report (22-page PDF file)
2012/05/22 Financial Director IAS19 impact remains uncertain
2012/05/22 The Wall Street Journal Asset Valuations Trip Up Audits, a CFO Report
2012/05/22 Bloomberg SEC Trials Increase 50 Percent as Execs Fight Lawsuits
2012/05/22 CFO.com Company Could Pay for CFO‘s Misguided Tweets
2012/05/21 The New York Times With New Firepower, S.E.C. Tracks Bigger Game, from the Deal
Book blog
2012/05/21 CGMA Magazine Bridging the ethical divide
2012/05/20 The Wall Street Journal CIO-CEO Disconnect a ‗Silent Killer‘, a CIO report
2012/05/16 Deloitte U.K. Joining The Dots. An Integrated Approach To Tackling Financial
Crime (16-page PDF file)
2012/05/16 Financial Director Corporate restructuring surge threatens covenants
2012/05 Ivey Business Journal In this issue:
Are female executives finally worth more than men?
Willful blindness: When a leader turns a blind eye
Table of contents
Never miss out again. Subscribe to Deloitte’s Press Review
© Deloitte & Touche LLP and affiliated entities. On The Agenda 7

Additional resources
If you are interested in learning more about the issues discussed in this issue of On the Agenda, links to some
additional resources are included below.
Centre for Corporate Governance (www.corpgov.deloitte.ca)
A web site specifically designed to help board members with their responsibilities. It provides the latest
information on regulatory and legislative developments, accounting and financial reporting, board roles and
responsibilities, and best practices.
Deloitte Update (www.deloitte.com/ca/update)
Learning webcasts offered throughout the year featuring our professionals discussing critical issues that affect
your business.
Deloitte Learning Academy (http://www.deloittelearningacademy.ca/welcomecanada)
The Deloitte Learning Academy offers a range of courses targeted to accounting professionals which can be
selected a la carte, bundled into a specific learning program, or delivered as a full start-to-finish suite. Our current
offerings include International Financial Reporting Standards (IFRS); Accounting Standards for Private
Enterprises (ASPE); and Public Sector Standards (PSAS).
IASPlus web site (www.iasplus.com)
Web site designed by Deloitte Touche Tohmatsu to provide the most comprehensive information on the web
about international financial reporting.
Heads Up (www.deloitte.com/us/headsup)
Periodic newsletter that keeps you informed of the latest accounting and regulatory developments.
© Deloitte & Touche LLP and affiliated entities. On The Agenda 8

In case you missed...
Deloitte events:
The Directors’ Series - Beyond Compliance
The dates for our 2012/2013 series are listed below. Please mark you calendar, and watch you inbox for your
invitation.
Thursday October 11, 2012
Thursday January 10, 2013
Thursday April 11, 2013
In case you missed any of this seasons‘ past sessions you may view a replay, access the handout materials or
order a copy of the session on DVD to share with your colleagues:
2011/2012 series:
The board‘s role in growth and strategy
Preparing for year-end audit committee meetings
The talent side of risk intelligence
2010/2011 series:
Social and environmental issues in the boardroom
Preparing for year-end audit committee meetings
The board‘s role in a transformed world of government regulation
© Deloitte & Touche LLP and affiliated entities. On The Agenda 9

Contact information
National
Don Wilkinson
416-601-6263
dowilkinson@deloitte.ca
Atlantic
Brian Groves
709-758-5225
bgroves@deloitte.ca
Shannon MacDonald
902-721-5560
smacdonald@deloitte.ca
Lloyd Foote
506-663-6605
lfoote@deloitte.ca
Québec
Alain Côté
514-393-5317
acote@deloitte.ca
Eddie Leschiutta
514-393-5132
eleschiutta@deloitte.ca
Clarence Turgeon
418-624-5366
cturgeon@deloitte.ca
Ontario
Neil Harrison
416-601-6307
nharrison@deloitte.ca
Paul Kensit
519-640-4603
pkensit@deloitte.ca
Lori O‘Neill
613-751-5355
loneill@deloitte.ca
Jim Pryce
519-650-7779
jpryce@deloitte.ca
Simon O‘Keefe
905-315-6763
sokeefe@deloitte.ca
Richard Nunn
416-601-6534
rnunn@deloitte.ca
Mike Boucher
905-323-6021
miboucher@deloitte.ca
Mark Morrison
519-967-7713
mmorrison@deloitte.ca
Manitoba
David Sachvie
204-944-3623
dsachvie@deloitte.ca
Saskatchewan
Marla Adams
306-343-4205
madams@deloitte.ca
Cathy Warner
306-565-5230
cwarner@deloitte.ca
Alberta
Rachel Gosse
780-421-3682
rgosse@deloitte.ca
Sippy Chhina
403-503-1314
schhina@deloitte.ca
British Columbia
Olin Anton
604-640-3006
oanton@deloitte.ca
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