Managing a captive board: critical but not simple

Board governance can be a vital part of running a successful captive insurance company, attendees at the 2024 annual conference of the Vermont Captive Insurance Association have heard. 

Speaking at a wide-ranging panel discussion involving the audience moderators Julie Bordo, chief executive / president PCH Mutual Insurance Company, RRG, and Dave Dietz, president / chief executive of College Insurance Company, pointed out that getting board governance right isn’t a “one-size-fits-all” approach and it’s not “one-and-done” either. 

They stressed that choosing board members can very important and that governance should evolve with the board, refining and perfecting how it pursues the organisation’s strategic objectives, as personalities, skillsets and experience all shape the collective effort, ability and achievements of it. 

One audience member asked just how much information should be provided to the board. The moderators stressed that to get the board to ask the right questions, you need the right board – how do you select your board when there are openings?  

The moderators added that a captive insurance company must find people who want to be on the board for the right reasons – not because of obligation after being asked to do it.  

The balance of board was also highlighted, as it needs to contain the correct combination of legal & financial & other experts. The vetting process of identifying potential board members can therefore be vital – as this sets people up to succeed.  

The panel also agreed that it is also important to introduce & recognise board members, especially new ones. Engaged board members can be effective board members, the panel agreed, adding that recognising the expertise of different people on the board in terms of who can answer questions is important. 

Bordo stressed that it’s important to have a board that’s active & curious enough to ask these questions and Dietz pointed out that when a board meets & gets through everything as fast possible, or is there just to meet officially but briefly, that can be a bad sign of a board that is not doing its job. 

Finally, the panel underlined that boards must be aware of what is happening in terms of if any trends are developing? Monthly reports to the board can help in this, as communication between board and company can be very important. 

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